Government aims to access NRBT Reserve Account [1]
Wednesday, February 8, 2017 - 22:02
From the House by Pesi Fonua
The Whole House Committee of the Tonga Parliament today amended Clause 33 of the National Reserve Bank Act, to enable government to access $27 million in the Reserve Account of the National Reserve Bank of Tonga (NRBT).
Debate on the Bill to Amend the Reserve Bank Act got off to a tense start yesterday, because it appeared that government was in a rush to have access to the Reserve Account.
There was no clear explanation of what government is going to use the money for, apart from comments that government is working on the 2017-18 budget to be launched at the end of June.
Voting on the Second Reading of the Bill was deferred from yesterday to today.
Meanwhile, hanging over the country are the immediate financial burdens of the government financing sports facilities to host the rugby test match between Tonga and Wales, and the 2019 Pacific Games.
Rubbing salt into the wounds is Tonga's Overseas Debt which restricts our ability to borrow from the World Bank and the Asian Development Bank, along with our continuing reliance on foreign aid and Budget Support from donor countries to enable public services to be operational.
When the House closed last Thursday, 2 February the selling by the Tonga Government of 20% of its shares in Tonga Cable Ltd TCL was a matter of concern for some members.
Lord Fusitu’a objected to the decision by government to sell 20% of its share in TCL to Digicel Tonga Ltd. He argued that the Submarine Cable Network is a national asset, and Digicel should not become an owner, even though it is only 20%.
The House last Thursday, 2 February agreed for the issue to be handed over to the House’s Standing Committee on Finance to look at the issue - but then did not wait for the result.
On Friday, 3 February, the Prime Minister, Hon. ‘Akilisi Pohiva signed the selling of 20% (out of the Government’s 80% shares) to Digicel.
Lord Nuku, the Chairman of the Standing Committee on Finance was very disappointed that government proceeded with the sales of its shares before he submitted his report of the meeting of the Standing Committee on Finance.
With the government pushing to amend the National Reserve Bank Act, the only argument that Lord Nuku could put up was that the public should be consulted.
Hon. Tevita Lavemaau, the Minister for Revenue Collection and Customs briefed the amendments of Clause 33 since 1988. He said that initially government could use one fifth of the money in the Reserve Account, until 2007.
Since 2007 the Reserve Account had accumulated to where it is to day, $27 million.
Government is proposing for the Reserve Account to be kept at not less than $10 million, and any more than that government should be able to use it for government services. Under the current situation, government could use $17 million of the $27 million; but it must be approved by the Board of the National Reserve Bank.
The Board of Directors are:
The Governor – Dr Sione Ngongo Kioa
Chairman – Steve Edwards
Director – ‘Aholotu Palu
Director – Sinai Tu’itahi
Director – Richard Prema
The Bill was passed by the Whole House Committee 13-0. It is yet to have its third reading in Legislature.