Second Reading THE SUPPLEMENTARY APPROPRIATION (2023-2024) (NO. 2) BILL (NO. VIII OF 2025) & THE SUPPLEMENTARY APPROPRIATION (2024-2025) BILL (NO. IX OF 2025) Order for Second Reading read. (11.39 a.m.)

Madam Speaker, with your permission, I beg to move that the two Bills be read a second time and considered together. These two Supplementary Appropriation Bills expose, once again, the irresponsible fiscal stewardship of the previous government. In fact, they confirm what everybody in Mauritius knows, that is, the previous government has dilapidated the finances of the country, and has left public finances in an unprecedented mess. This has been confirmed by the IMF during its recent Article IV Consultation Mission in Mauritius. This mismanagement of public finances by the previous government has also been confirmed by the Report of the Director of Audit. In fact, the report has exposed a number of scandals and malpractices that have resulted in wastage of public funds, misallocation of resources, and sub-standard outcomes. Madam Speaker, we are introducing the two Bills by virtue of the provisions of section 105, subsection 3 of the Constitution which stipulates that – “(3) Where in any financial year it is found – (a) that the amount appropriated by the appropriation law for the purposes included in any head of expenditure [which we know as vote of expenditure] is insufficient or that a need has arisen for expenditure for a purpose for which no amount has been appropriated (…)”, then a Supplementary Appropriation Bill needs to be introduced in the National Assembly to provide for the appropriation of those sums. What is scandalous, Madam Speaker, is that the first Bill, the Supplementary Appropriation (2023-2024) (No. 2) Bill should have been brought by the previous Minister of Finance, especially as he had the opportunity to do so in the first Supplementary Appropriation (2023-2024) Bill, which he introduced in May 2024. The more so that some expenditures such as the increase in pensions were already known at that time; he simply did not. It is awkward now that I should be the one to bring the Supplementary Appropriation (2023-2024) Bill to the House. The previous Minister of Finance has actually spent money that was not there and, obviously, he wanted to avoid the scrutiny of Parliament. Nevertheless, in the spirit of the Constitution, let me come to the first Bill, that is, the Supplementary Appropriation (2023-2024) (No. 2) Bill (No. VIII of 2025). In June 2023, the previous government presented an Appropriation Bill for a total sum of Rs174.8 billion, which was in respect of services of government for Financial Year 2023-2024 under votes of expenditure No. 73. In May 2024, the government introduced a Supplementary Appropriation Bill for an additional sum of Rs6.7 billion. Out of this sum, Rs1.9 million was for the payment of compensation to Patel Engineering Ltd following the award by the Permanent Court of Arbitration in respect to the termination of the lease agreement of a plot of land situated at Les Salines by the then government. This amount excludes another Rs315 million which was paid as fees to the legal advisers of Patel Engineering Ltd. This is yet another case of wastage of public funds resulting from sheer political vendetta. Another example of expenditure arising from mismanagement was the Rs500 million channelled into MauBank through MauBank Holdings Ltd in addition to some Rs5.1 billion already injected into the bank since its creation. Now that the accounts of Government for Financial Year 2023-2024 have already been audited and the Report of the Director of Audit has been tabled before the National Assembly, there is need to regularise the excess expenditures incurred under the five votes of expenditure. The total amount to be appropriated is Rs2.8 billion. The additional appropriation required are as follows – (i) Rs197,000 under Vote 1-2 Office of the Vice-President mainly for maintenance of vehicles; (ii) Rs2,435,000 under Vote 1-5 Office of the Electoral Commissioner, essentially for the purchase of equipment for the 2024 National Assembly elections; (iii) Rs63,835,000 under Vote 1-18 Financial Crimes Commission to enable the Commission to meet its operating expenses; (iv) Rs2,643,188,000 under Vote 9-2 Social Security and National Solidarity mainly due to increase in the rate of basic pensions as from April 2024, and lastly (v) Rs90,691,000 under Vote 15-1 National Infrastructure mainly for payment of claims in respect to construction and upgrading of roads. Madam Speaker, the figures clearly demonstrate the irresponsibility of the previous government in public finance management. They announced a budget deficit target of 2.9% of GDP for the Financial Year 2023-2024, but they ended the year with a deficit of 5.7%, almost double the initial target. The public sector debt figures are more telling. They have been boasting that they had achieved their objective to bring down public sector debt to less than the statutory level of 80% of GDP. They said they would bring the public debt to GDP ratio as at the end of June 2024 down to 73.2%. Instead, Madam Speaker, they increased to 84%. Let me now come to the second Bill, Madam Speaker, the Supplementary Appropriation (2024-2025) Bill (No. IX of 2025). In June 2024, the previous government presented a budget of Rs216.8 billion for the Financial Year 2024-2025 under votes of expenditure No.72. The 2024-2025 budget is yet another showcase of fiscal irresponsibility. On the one hand, there was a gross exaggeration of the revenue figures, and on the other hand, there was significant under provisioning for expenditures. This was done only to show a lower budget deficit and a declining public sector debt to GDP ratio, yet in another attempt to hoodwink the population. Once again, an illusion! The Supplementary Appropriation (2024-2025) Bill that we are discussing today makes provision for an additional appropriation of Rs21 billion under five votes of expenditure, where sums initially voted, would not have been sufficient up to June 2025. It is worth noting, Madam Speaker, that Rs9.3 billion out of the Rs21 billion is mainly a result of under provisioning by the previous government for some original projects and schemes. Rs2.1 billion, is for new decision they took during the course of the year for which no provision was made in the budget. The remaining Rs9.6 billion is for the special effort that we did for the payment of the 14th month bonus and the 2025 salary compensation to protect the purchasing power of the population. Let me point out, Madam Speaker, that 90% of employees in the public and private sectors as well as pensioners benefited from the 14th month bonus. Madam Speaker, the five votes of expenditure, the required supplementary appropriation, are as follows – (i) Rs1.3 billion under Vote 3-1 for Housing and Land Use planning for the payment of Rs315 million for legal representation to Patel Engineering Ltd; Rs435 million for additional expenditure in connection with the construction of 466 social housing units, and Rs550 million for the acquisition of land for various projects; (ii) Rs600 million under Vote 6-1 Ministry of Land Transport and Light Rail (Now Ministry of Land Transport) in respect of decision taken for which no provision was initially made. These include the 30% increase in the subsidy payable to bus operators under the free travel scheme and financial support provided to bus companies for the payment of wage relativity adjustment; (iii) Rs5.8 billion under Vote 9-2 Social Security and National Solidarity to cater for the payment of the 14th month bonus to beneficiaries of the basic pensions, increase in the rate of monthly child allowance payable to retirees, widows, and disabled individuals having dependent children, and the payment of bad weather allowance to professional fishermen; (iv) Rs1.5 billion under Vote 18-1 Ministry of Health and Wellness, mainly to clear arrears in payment of overtime as well as for overtime arising from delays in filling vacancies, for increase in prices of medicines, drugs and vaccines, and payment of arrears or for settlement of arrears in respect of medical disposables and equipment; (v) Finally, Madam Speaker, Rs11.8 billion under Vote 26-1 Centrally Managed Initiatives of Government to cater for – (i) the payment of 2025 salary compensation to public officers; (ii) the payment of an allowance equivalent to 5% of the basic salary subject to a maximum of Rs2,000 as from 01 January 2024 to public sector employees covered by the PRB, pending the implementation of the next PRB report that will fully address the issue of salary relativity. (iii) for payment of the 14th month bonus to civil servants and officers working in parastatal/statutory bodies, and local authorities; (iv) for the transfer to the National Environment Fund to meet expenditure on different projects; (v) for additional transfer to the National Resilience Fund to meet new expenditures and under provisioning; (vi) for the transfer to the Poverty Reduction Fund in respect of the implementation of the Prime à l’Emploi Scheme; (vii) for additional expenditure for the CSG Income Allowance and CSG Child Allowance due to higher number of beneficiaries, and (viii) for the purchase of Special Drawing Rights from Ukraine under the IMF Voluntary Trading Arrangement. Madam Speaker, it is worth noting that out of the total of Rs21 billion supplementary appropriation, some Rs5.9 billion will be for the transfer to special funds, namely – • Rs3.9 billion to the National Resilience Fund; • Rs1.1 billion to the National Environment Fund, and • Rs900 million to the Poverty Reduction Fund. The previous government has depleted the cash balances of these three special funds, which was Rs36.8 billion as at June 2022. As announced in the Government Programme, there will be a reassessment of these funds and appropriate actions will be taken in the forthcoming budget for their consolidation. This will also be in line with the recommendations of the IMF, which asked that we streamline and limit spending from special funds. Madam Speaker, in the Budget Speech of 2024-2025, the previous Minister of Finance announced, and I quote – “365. This year, we have achieved our objective to bring down public sector debt to less than the statutory level of 80 per cent of GDP. 366. By June 2025, we will be largely below that statutory level and closer to our medium-term goal of 60 per cent of GDP.” However, the actual situation is the complete opposite, as I mentioned. Owing to the legacy left behind by the previous government, the debt ratio is now expected to increase to over 90% by the end of June 2025 – well, well above the statutory level. The budget deficit would be 9.5% of GDP against initial estimates of 3.4%. Never in our history of public finance management has there been such gross exaggeration of revenue and underestimation of expenditure. This Government, Madam Speaker, is fully committed to a responsible approach to fiscal stewardship. The days of reckless spending, spending on white elephant projects and giving out frivolous allowances and increases, as was practiced by the previous government, are now things of the past. In view of the disastrous state of public finances that we inherited, our top priority is to implement a credible medium term fiscal consolidation plan that will bring down the budget deficit and public sector debt to sustainable levels and ensure medium- term macroeconomic stability. We will put our resources where it will have the highest impact in advancing our economic development and uplift the living conditions of our people. Madam Speaker, we will rebuild the fiscal space, promote economic growth, while at the same time, protect the most vulnerable. Details on the items of expenditure concerned as well as explanatory notes thereon are set out in the Estimates of the Supplementary Expenditure which have already been laid in the National Assembly, together with the Supplementary Appropriation Bills. Before I conclude, Madam Speaker, I would like to inform the House that there has been a typographical oversight in the Schedule of the Supplementary Appropriation (2024- 2025) Bill under the heading Vote of Expenditure in Schedule 9-1. It should have read 9-2; this will be corrected. With these remarks, Madam Speaker, I commend the Bill to the House.

Thank you. The Deputy Prime Minister rose and seconded.

Yes, hon. Leader of the Opposition, would you like to say a few words? (11.54 a.m.) The Leader of the Opposition (Mr G. Lesjongard): Yes. Thank you, Madam Speaker, for giving me this opportunity today to intervene on these two Supplementary Appropriation Bills, which is a normal process and this will not be the first time or the last time that we are voting a Supplementary Appropriation Bill in this House. I share some of the views expressed by the hon. Prime Minister, but not all, Madam Speaker. Madam Speaker, today we are tasked, in this august Assembly, to vote for two estimates; the first one for an amount of Rs 2,800,346,000 and the second one for Rs21 billion and I take note that a huge chunk of this amount will be used to cater for social benefits under the Ministry of Social Security and National Solidarity, such as pensions, Child Allowance and CSG benefits. And, I believe this is the right thing to do, Madam Speaker. There is also a considerable amount of money which is being allocated for the 14th Month Bonus. I do commend the hon. Prime Minister for honouring this commitment which was first made by l’Alliance Lepep, that is, the 14th Month Bonus, and then l’Alliance du Changement followed suit, Madam Speaker. Although that 14th Month Bonus was promised across the board, we know that only those earning a salary less than Rs50,000 benefited from the 14th month salary. Madam Speaker, with your permission, I would like to dwell a bit further into the details of the Bills, such as for example, Item 3113-003 on page 14 of the Estimates regarding the Construction and Upgrading of Roads.

I am sorry, maybe you might want to keep this for the Committee of Supply in a while?

I will just say a few words.

Okay, but general. General words!

Yes, because it deals with the construction of public infrastructure and I believe it is vital to improve traffic. For example, as stated…

On a point of order, Madam Speaker!

Yes, one moment.

He is not saying which Bill he is referring to.

Yes, tell us if it is the first or second Bill!

The second one, Madam Speaker.

Second Bill, alright.

The second one. Like I said, Madam Speaker, it is good to improve public infrastructure, especially if this deals with the improvement of traffic in the regions of Vacoas and Curepipe and it will also provide access for those travelling from airport to Flic en Flac. Madam Speaker, I also note that provision is being made for further improvement of road infrastructure towards Ganga Talao to facilitate pilgrims’ access during Maha Shivaratri. Madam Speaker, now coming to the Supplementary Appropriation Bill 2024-2025, I notice that Rs235 million is being allocated as Child Allowance and another Rs300 million as CSG Child Allowance to cater for the higher number of beneficiaries. We know that initially it was for an amount of Rs2,000 and it has been increased to Rs2,500 in the previous budget, and would have been increased – like I said – to Rs5,000 had the Alliance Lepep won the last general elections.

(Interruptions)

I am not sure if the present Government will increase this allowance but I would urge the Government not to remove this allowance in the forthcoming budget as many young parents, Madam Speaker, depend on this sum to cope with the increase in prices which has impacted products which are directly related to a baby’s wellbeing. Madam Speaker, same goes for the CSG benefits and the CSG Income Allowance. I also see that a sum of Rs315 million and Rs1,150,000,000 are being voted in this Bill and we know that around 500,000 Mauritians benefit from the CSG allowances. Now, Madam Speaker, depending on the category of workers, these workers can earn between a thousand to three thousand rupees every three months and believe it or not, Madam Speaker, this makes a huge difference for those employees whose earnings have been heavily impacted by the constant increase in the prices of commodities over the last three months and coupled with two other issues, that is, the increase in repo rate and maintaining the prices of Mogas and Gasoil. Again, Madam Speaker, I will stress on Government to give due consideration in maintaining the CSG benefits to all the beneficiaries as this sum helps and supports a lot of Mauritian families. Madam Speaker, now, let me come to salary relativity adjustment. The previous regime introduced the minimum salary in 2018. This has consistently been increased until we have reached a guaranteed minimum wage of Rs20,000. I believe this also, Madam Speaker, helps Mauritian families to meet the increase in cost of living. I am sure, maybe in the forthcoming budget, there will be an increase in the minimum salary. However, Madam Speaker, salary relativity is essential to ensure that all categories of workers, be it in the public sector or in the private sector, earn a salary that is worth their position, experience and effort. I am sure Government will address same. Let me sum up, Madam Speaker, by saying that when it comes to social agenda, this Government will have my full support. I reiterate and I hope this does not fall in deaf ears, Madam Speaker. There is a huge effort that has been made over the past five years to reduce inequalities between categories of workers and social groups. The introduction and constant increase of the minimum wage, coupled with other allowances, such as the CSG Allowance and the Child Allowance, have helped support vulnerable families, especially in the wake of an increase in prices of basic commodities. So, to conclude, Madam Speaker, I will urge the Government, if you do not intend to increase these allowances; at least, leave these facilities and allowances untouched. I thank you, Madam Speaker.

Thank you, hon. Leader of the Opposition. Hon. Prime Minister, your winding-up speech! (12.03 p.m.)

Madam Speaker, yes, I am winding up. But I cannot find in the second Bill the reference about construction and the expenses that you mentioned. Maybe it is in the first Bill.

The first one.

Hon. Prime Minister, it might be easier for everyone if the hon. Leader of the Opposition takes it up again when we reach the Committee of Supply. Because, now, we are making an overall…

Yes! Then, we can do it.

Yes! If you do not mind, hon. Leader of the Opposition, you can come back on this later on during the Committee of Supply.

No, but he is wrong. It’s not there.

Let us have your winding-up speech, please!

Just to say, Madam Speaker, that it is very plain. I have said it at the beginning of my speech that they have just spent, spent and spent money that was not there! So, what did they do? They printed money! Any young person here who has done Economics would know what happens when you print money and you put it in circulation. You increase inflation, you depreciate your rupee, and prices go up. This is what we are living with today. People expect magic! We are trying! We are trying to stabilise the rupee and to make prices go down. But it will take time because this is what has happened. So much money was put in circulation. I am surprised that, in fact, the hon. Leader of the Opposition even wanted to speak on the Bill because this is the situation. We had promised the 14th month bonus; we did the maximum that we could. We absolutely cannot wreck the country and the economy. We did not even know that they had done so much damage. So, this is what we have done. This is why I am saying – it is very simple, Madam Speaker – we can only make sure that we bring the debt level down; it cannot be 90%! If we do that, Moody’s will absolutely and surely want to downgrade us! This is what we want to avoid. If Moody’s downgrades us, it will not be because of us; it will be because of them. But the consequences for the country are going to be terrible. They will describe us as ‘junk status’, which means there will be no investment. Nobody will want to invest in a country where you are not… A ‘junk status’ means that when you invest in the country, you are not sure that you will get your money back. So, who is going to invest? This is why we absolutely want to avoid a downgrading by Moody’s, but the situation is terrible. 90% of debt – we have to make a lot of effort to bring that down. We talk about statutory – 80%. When I was Prime Minister, it was 60%. Maybe when you came, you increased it to 80%. I do not know! But it was 60%. When I left in 2014, it was just below 60% – 59.8 something per cent. But it was below 60%! Below the target! This is what they have done with the economy during the 10 years! This is what I wanted to say, Madam Speaker. This is what we are trying to do, and this is what we will do.

Will you, please, commend the Bill again to House, hon. Prime Minister?

I commend both Bills to the House, Madam Speaker. Question put and agreed to. Bills read a second time and committed.