Senate of the 11th Olbiil Era Kelulau (OEK) is recommending that President Surangel Whipps Jr. “argue for the Republic’s right to separate the $35m (and earnings to date) as non-Section 211 (f) Trust Fund that Palau can use for budgetary support during the pandemic.”
Senate argues that United States agreed to contribute $30.25m to Trust Fund Section 211 (f) under the Compact Review Agreement (CRA) in 2010 but it was not realized until 2018 where the agreement was amended to have the United States make a one-time contribution of $65.25m to the Compact Trust Fund. Senate contends that the difference of that $65.25m of $35m should be classified as Direct Financial Economic Assistance. This they say will allow the Palau government to draw down the money to help supplement its budgetary needs during the pandemic.
“OEK has provided for the basic needs of the government but OEK has been unable to adequately address revenue losses for the 16 states, the Protected Areas Network, the Civil Service Pension Plan Fund, the Social Security Retirement Fund, and the rising cost of fuel forcing Palau Public Utilities Corporation to raise its Automatic Fuel Price Adjustment Clause.”
After going through the FY2022 budget readings, Senate Committee on Ways & Means reported that the draft budget authorized $93.433m and appropriated $85.192m, falling short of $8.24m.
The report emphasized that government must find other financing options to continue unemployment benefits to the private and public sectors and for a recovery road map.
Senate Ways & Means Committee added to the budget bill a language urging President Whipps to work with the United States to change the language of the Compact Review Agreement and to allow Palau to access the $35m from the Compact Trust Funds to help Palau’s budgetary shortfall as a result of this pandemic.