From the House by Pesi Fonua

Yesterday the Minister of Finance, Hon. Tevita Lavemaau presented to Parliament the Tonga Government's 2018-2019 Financial Report.

It was an old report and the Minister explained that there was a sense of frustration in preparing the report, because of the difficulty of trying to value the fixed assets of government under the old accounting method that government was using, therefore they could not give a comprehensive report of Tonga’s national financial situation.

The Minister said that the Tonga Government would cease using the accrual basis accounting method and return to a cash basis accounting method.

However under the 2018-2019 Financial Report there is a $16 million profit.

The Speaker, Lord Fakafanua called for votes and the 2018-2019 Financial Report was was carried with 22-0 votes.

Budget statement

The House moved on from there to debate the national budget statement for the coming financial year.

The Legislature was dissolved into the Whole House Committee, and Hon. Tevita Lavemaau proceeded to unravel highlights from his 2020-2021 National Budget.

He had earlier announced that the theme for this year’s national budget is based on a verse from the Bible, Psalm 91:2 – “The Lord is my Refuge and my Fortress, my God, in Him will I trust”.

The Budget Statement document has not been released to the public but Hon Lavemaau proceeded to highlight a few figures from his budget.

He said that Cyclone Harold had  inflicted USD$250 million damages but so far Government had received $11 million [unspecified currency] assistance from foreign donors to help with the restructuring of damages to Infrastructure and the tourism Industry.

There is also a $34 million contribution from the World Bank for the reconstruction of damaged roads and wharfs.

Besides these financial assistances from foreign donors, government is exempting customs duty on building materials to enable people to build strong buildings, until the end of December 2020.

The budget proposes that the current personal income tax free allowance of $10,000, to be increased to $15,000- ie the first $15,000 earned to be tax free for everyone.

Chinese loan repayment due

For government to ascertain that it has enough funds to finance its obligations, the Minister of Finance said that Government had requested to extend the deference of Tonga's repayments of its USD$119 million loan from China. But he admitted that there had been no response from the Chinese.

He said that government during this financial year would focus on the construction of public roads, providing of water tanks, and the establishment of street lights.

Tar-sealed roads will be constructed in Vava’u, Tongatapu and ‘Eua, estimated to cost USD$13.2 million and will take four years to build.

He said that the World Bank was also contributing $34 million, for the construction of roads and wharfs.

Government had also allocated $3 million for the construction of 5000 water tanks for the whole country.

He said that $60 million had been set aside to help private businesses. Government hd also allocated $3 million to buy fish from local fishermen and to resell them to the public. This was to help the fishing industry, because Tonga could no longer export fish overseas.

Government has also allocated $15 million to counter COVID-19; $4 million for the establishment of quarantine cacilities, and $11 million for the Ministry of Health to buy PPE. He said that they were aware that the price of PPE had gone up but they had made an arrangement for New Zealand to buy them in bulk, then Tonga buys them from New Zealand.

Quarries

The USD$13.2 million for road construction in Vava’u, Tongatapu and ‘Eua sparked off a few loud verbal exchanges between the Tongatapu No. 4 People’s Representative, Mateni Tapueluelu, and the No. 2 Tongatapu People’s Representative Semisi Sika who queried how three quarrying companies had secure the contract to build the roads for government, and the Tonga Government had also guaranteed their loans from the Tonga Development Bank to finance their construction of the roads.

The Minister of Finance and the Prime Minister tried to certify that there was no favouritism in how the three quarries got the contract, and that when these companies will be paid, the money will go to the Tonga Development Bank first to settle their loans first.

The Tonga Government is the major shareholder of the Tonga Development Bank.

The verbal clashes over the government's multi-million roads project with these three companies went on until the Speaker called for the House to close until the following day.