Tonga Parliament Unanimously Passes Record Budget

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Donor support to make up 55% of $192.6 million

By Pesi Fonua.

NUKUALOFA, Tonga (Matangi Tonga, June 28, 2013) – The Tonga government's biggest-ever budget estimate of T$357.6 million [US$192.6 million] for the 2013-14 financial-year was unanimously passed by parliament yesterday evening, 27 June.

The budget – the third to be produced by Tonga's current government -relies on foreign aid donor funding to meet 55 per cent of its total costs. [See earlier article: Tonga's biggest budget depends on donor pledges]

Donor-supported government has become a fact of life for Tongans whose economy is predicted to make invisible growth of 0.5% in the coming financial year.

Significantly, there are no major projects in the new national budget that could boost the economy, other than opportunities for Tongan workers to work overseas and send money back to their families in Tonga.

Salaries and wages account for a large portion of the ministries votes.

The Minister of Finance, Hon. Lisiate 'Akolo stressed that there is no cut back in the size of the Civil Service this year, nor an increase taxes, excepting for an amendment to the Income Tax Act, to enable government to collect income tax from foreigners who are in Tonga on projects for less than 30 days.

But government will fund two big investigations – one to find out why public enterprises no longer pay handsome dividends; and another to find out why bored school boys who see no future in a dead economy are beating-up each other.

Public Enterprises

The budget allocates $250,000 for the setting up of a Royal Commission to scrutinize the operation and the revenue collection of Public Enterprises. Hon. Lisiate 'Akolo believed that some thing is wrong with the revenue collection of some of these enterprises. He said that one particular enterprise used to pay a dividend of $6 million per annum, but now it was paying only about $300,000 to $400,000 per annum.

The allocations for government Ministries have all increased, with some more than others. The top five ministries are:

The bottom five ministries are:

Minor changes

The debate on this year's budget lacked vigor, and after eight days of debate, including overtime, it was passed with only two minor changes to the original submission.

One of those changes allows the Ministry of Education to receive the $250,000 that was allocated to find a solution the problem of the increasingly violent clashes between schools, which is spreading into villages. The Ministry of Education is already working on the problem.

The other change was the amendment to the Income Tax Act to enable government to collect tax from foreigners who visit Tonga to oversee projects.

Noticeably lacking from the budget debate this year, was that it ended without any good wishes for the coming year from Cabinet.

Butchered

Whether it was by design or default, a very cold draft blew the House closed, when an issue of corrupt electoral practices for village elections was compared to the current practice of allocating a total $2 million in handouts to PRs for their annual constituency tours.

For a start, 'Akilisi Pohiva told the House about a letter from a man at Pangaimotu, Vava'u, who had complained that the last election for town and district officers was snatched by a candidate who had butchered a pig for the villagers during the election, and won. 'Akilisi said when he first ran for parliament other candidates did all sorts of corrupt practices to get into parliament, but he did not, but the people elected him.

Lord Nuku, however, snatched the moment and pointed out that the member was highlighting what he thought was corrupt practice by this individual at Pangimotu. In fact, he pointed out, that the PRs had just butchered the budget by accepting an allocation of $100,000 per elected People's Representative to take with them on the annual tours of their constituencies for handing out. This practice, according to Lord Nuku, is a budget-funded election campaign by the People's Representatives. A total of $2 million has been allocated in this year's budget to be shared among the PRs who may make hand outs to their constituents.

The only PR who responded to Lord Nuku's reaction was Hon. Sangster Saulala, who said that now and again he helped the needy people in his constituency, not to ascertain that he would get their vote but "to share what he had".

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