Main Features of the 2008/09 Budget [1]
Thursday, April 10, 2008 - 16:37. Updated on Friday, July 24, 2015 - 16:54.
What sets this budget apart from previous years is that the budget round has been an inclusive process. Each Minister and CEO presented their ministries budget bid to the Expenditure Review Committee (Prime Minister, Deputy Prime Minister, Minister for Finance, Chairperson Public Service Commission) and from there the Committee considered these in terms of the Government's overall policy priorities.
The main features of this year's budget include:
- The budget has been a joint effort, with the ministries setting their own revenue and expenditure targets;
- Government revenue is estimated at $187 million in 2008/09, a $34 million increase over the 2007/08 budget. This is based on revenue collections to date for this year, which are well above the budgeted target, due to the growth in the economy and improved revenue compliance
- Government will maintain its prudent fiscal stance of recent years and has set a balanced budget
- Health and Education see increases in their budget allocation of around $3 million each
Capital Expenditure
For the first time in a number of years the Government of Tonga is able to significantly increase its capital expenditure and, therefore, improve the countries infrastructure, without relying almost entirely on donor funding.
- $6 million has been set aside for road maintenance which will be outsourced to the private sector (the intention is to put in place a 3-year rolling maintenance plan of $20 million);
- $1 million for X-ray machines for the airports and wharves to enhance border security and customs compliance
- $0.8 million for repairs of the Foa causeway in Ha'apai
- $1.2 million for police equipment and facilities
- $1.5 million for the first stage of new prison (3 year building program)
Tax amendments
A number of tax initiatives have recently been introduced, or are part of the budget, that are aimed at reducing the cost of living for the general public. These include:
- The removal of fuel import duties for domestic air and shipping companies to reduce the cost of fares and freight to the outer islands
- The removal of import duties on fresh, chilled, and frozen meat and poultry to reduce the cost of basic foodstuffs. Expenditure Review Committee, 9/04/08.