Austerity Law: piece of paper

The Austerity Law passed by the government in December 2006 on the occasion of levying increased taxes on the Dominican people has been just another piece of paper, reports Clave Digital reporter Edwin Ruiz after studying what was promised and what happened. Ruiz reports that Law 497-06 instructed the government to reduce spending on advertising and campaigning by 25% compared to spending in 2005. Instead, from January to September of this year the government increased spending over the same period in 2005 by 55%. This adds up to an additional advertising spend of RD$806.7 million over what the austerity law submitted by the Executive Branch proposed.

The government spent RD$1.6 billion on advertising from January to September. Furthermore, the report indicates that government revenue increased RD$14.7 billion from January to September over what had been budgeted, or a 139% increase in non-taxed based revenue, thanks mainly to the high prices of ferronickel exports. The government also promised a reduction in the government payroll. But instead, the government payroll increased by 6.38%. The same law established that the Executive Branch would limit the number of assistants and advisors appointed to government departments. Instead, Ruiz points out, in October the government appointed 60 new government officials and deputy ministers in a move perceived as aimed at courting support from small political groups.

The government promised to tighten its belt, but instead, a RD$258.4 billion planned budget has been extended to spending RD$281.6 billion, or a 9% increase in spending due to the revenues surplus.