Australian Permanent Mission to the United Nations

New York

Permanent Mission address: 150 East 42 Street, Level 33, New York, New York 10017 - Telephone: 1 212 351 6600 - Fax: 1 212 351 6610

UNITED NATIONS GENERAL ASSEMBLY

Statement by Mr David Dutton, Australian Delegate to the Fifth Committee, on behalf of Canada, Australia and New Zealand

Item 114: Improving the Financial Situation of the United Nations

New York 15 May, 2003

Mr Chairman,

I have the honour to speak on behalf of Canada, New Zealand and Australia.

Our delegations wish to thank Under Secretary-General Bertini for her first presentation to the Fifth Committee on the UN's financial situation. As always, this presentation allows us to step back and look at the financial situation more broadly. It lets us assess how we - member states - are acquitting our responsibilities to the Organisation.

Mr Chairman,

Our delegations are pleased to see that the UN's financial situation continued to improve during 2002. The largest factor was the payment by the United States of a substantial proportion of its arrears. We welcome the efforts of the United States to rectify its longstanding debts to the United Nations and encourage it to complete the payment of all its arrears.

However, this good news should not obscure the fact that a larger number of member states did not meet their obligations to the UN in 2002 than in 2001. The fall - to 117 - in the number of member states paying their regular budget assessments in full by year end, as well as the increase in total arrears for the regular budget, are worrying developments.

The number of member states not paying their assessments for the two tribunals is also emerging as a serious concern. Only 58 states paid their assessments in full during 2002, leaving 133 with arrears at year end.

And, while the level of outstanding peacekeeping assessments fell during 2002, it was still unacceptably high at more than $1.3 billion at the end of the year. We would appreciate a list of the nine major contributors, after the United States, who collectively owe half a billion dollars for peacekeeping.

We will look forward to receiving, in the next presentation on this subject, details of payments for the capital master plan.

Mr Chairman,

The `honour roll' - which contains just 23 member states - is lamentably short. However, we note that the list includes both rich and poor member states, and countries from every continent except one. We believe that every member state should aim to be on the list. There is an obvious disjuncture when member states advocate for the UN to take on important additional tasks in peace and security, economic development, and global cooperation, without paying their share of the costs.

It is striking that a small number of member states are responsible for the vast majority of outstanding assessments, and these countries can do much to improve the UN's financial situation simply by fulfilling their obligations. Of course, the concentration of arrears among a small number of member states is, in part, a consequence of the scale of assessments. We believe that the obligations of those states whose assessments are relatively small are no less binding or important. Accordingly, we call on all member states to meet their obligations under Article 17 of the Charter in full, on time, and without conditions.

Mr Chairman,

We have noted the Secretary-General's request that $169m in the closed mission accounts be retained by the UN in order to help manage cash shortfalls in other accounts.

Our delegations are concerned that a decision to retain the money would penalise those member states which have paid their assessments in order to manage the consequences of other member states not meeting their obligations. It would add another inequity between those who pay on time and those who pay late, in part, or not at all.

Funds owed to member states which are up-to-date should be returned to them, in accordance with the Organisation's financial regulations and rules. Funds owed to member states which have arrears should continue to be offset against their arrears. Changes to this practice were proposed in the Secretary-General's report on measures to encourage member states to pay their arrears and we are happy to consider further such measures at an appropriate time.

The current proposal, to retain the $169 million, would require the suspension of the application of the relevant financial regulations and rules which in our view is a matter of some gravity.

At this stage in our consideration of this issue, we do not believe we have sufficient information to make a decision on this question. We would appreciate information on the implications for the Secretariat's cash management of the return or retention of this money. In particular we are interested in establishing what is an appropriate level of cash reserves for peacekeeping for the rest of this year. We would welcome comment from the Advisory Committee on this issue.

Mr Chairman,

Fortunately, the forecasts for 2003 indicate continued improvement in the financial situation. The increased level of regular budget payments so far this year is an encouraging sign. But, clearly, the health of the UN's finances depends on member states. We urge all member states to ensure that progress continues.