The Palau national budget bill for the fiscal year 2024, authorizing $122.43 million and appropriating $112,446,458, was signed into law on September 30, 2023, one day before the current budget law was to expire.
President Whipps said in a statement that the budget is designed to help Palauans cope with the high cost of living, especially the cost of power utility and water. The budget also includes a raise of $3,120 per employee per year for national and state government employees. The $3,120 includes the FY 2023 salary increase. President Whipps said he would sign a bill to increase the minimum wage for the private sector as soon as he receives it.
The government has increased revenue by about $11 million in the first three quarters of FY 2023 from the Palau Goods and Services Tax (PGST). President Whipps said that PGST is not popular with the people, but as a sovereign nation, it is the responsibility of the country to take care of itself. He said that increasing the salary of government and state employees helps them care for their families, which is part of a nation’s responsibility.
The $11 million raised from PGST comes from the people who bear the consumer tax burden. The government increased its budget above pre-covid levels, raised national and state employees’ salaries, and withdrew an additional $10 million from the Compact Trust Funds to fund its increased expenses.
In his Independence Day remarks, Whipps cited a study by USA Graduate School that estimated that 9,000 Palauans migrated out of Palau after 1994 and projected that 2,000 more will leave between 2020 and 2024.
“We must work together to strengthen our economy…make our country more attractive” to keep Palau’s population from migrating, said Whipps.
Increasing government spending, increasing the minimum wage, and diversifying the economy by delving into fintech industries are the three policies that have been cited by this administration as means to improve Palau’s economy.