Tonga budget debate stuck on $12m secretive roads contracts [1]
Sunday, May 31, 2020 - 21:34. Updated on Sunday, May 31, 2020 - 21:57.
From the House by Pesi Fonua
The refusal by Government to reveal the identities of three companies that had won $12 million pa’anga worth of road construction contracts, to construct 2100 kilometres of tar-sealed roads throughout Tonga, has snarled the Budget debate in the Tongan parliament for three days 26-28 May.
Tonga’s 2020-2021 National Budget was tabled into Whole House Committee of the Tongan Parliament on Monday, 25 May by the Minister of Finance, Hon. Tevita Lavemaau.
While the Minister was presenting the National Budget members were discouraged from asking questions and disrupting his presentation.
However, the working schedule of the House, leading up to the presentation by the Minister of Finance of his National Budget had presented a number of unanswered questions.
While the House was still in Legislature the Speaker, Lord Fakafanua, allowed the Chairman of the House’s Standing committee on Fisheries and Agriculture, Semisi Fakahau to present a committee report to the House.
The Committee had prepared a working program for Government in case COVID-19 arrives in Tonga.
Specifically, it proposed seven projects for Government to implement, with a focus on food security.
- For 2500 acres of farm land to be ploughed and prepared for the planting of food crops. For each district to be provided with a tractor.
- Equipment is needed to clear the land of fallen trees so that it can be ploughed and prepared for the planting of crops.
- Because there is a drop in the importation of meat from overseas, people should be encouraged to raise animals, pigs etc. The report suggested for government to remove tax on imported fencing wires.
- With fisheries, there is a need for a government assistance for the fishing of Ngufeke.
- For Tonga Power and the Customs Department to provide freezing containers for the storage of root crops and fish products, awaiting export.
- To secure Tonga’s food supply, the importation of tractors should be duty free.
- For government to provide people who have no land, with land to grow food crops.
Penisimani Fifita, the Tongatapu No.9 People’s Representative, thanked the chairman of the Committee for the Report, and stressed the problem with a need for tractors to prepare the land.
Lord Tu’ilakepa, the Minister for Agriculture and Fisheries, the Minister with a major role to play in implementing the Standing Copmmittee’s seven working projects reminded the House that Tonga was no longer exporting fish, but they had bought a ton of fish from fish exporters and sold them at ‘Eua and Vava’u at a lower price.
He said that there was a need for government to reactivate its ploughing division services, and he was hopeful that government would be able to have tractors soon.
However, before the House ventured into government buying fish and ploughing land, before the Budget was passed by the House, the Speaker called for votes to dissolve the Legislature into the Whole House Committee.
It was carried with 21-0 votes.
Budget
The Chairman of the Whole House Committee, the Vava’u No. 2 Nobles’ Representative, Lord Tu'i'afitu took his seat and reminded members the theme for this year’s budget - “The Lord is my Refuge and my Fortress.”
The Minister of Finance, Hon. Tevita Lavemaau then proceeded to give a summary break down of his Budget Statement.
He said that there was an allocation of $100 a month for all the 90-year-olds in the country. There were also allocations for the 70s to 80s, 80 to 85, and 85 to 90 year olds.
He reported that 200 houses in Tongatapu and ‘Eua that were damaged by Cyclone Gita in 2018 would be fixed this year.
Imported Building Materials for private homes, churches and groups will remain duty free until the end of December 2020.
All those who earn up to $15,000 a year will be tax free.
Quarries
He said that Government had a $15 million road project to be completed within the next three years. He said that initially quarries were offering $220 per one-ton truck load of gravel, but the price had been dropped to $70 per load.
He said that the project was expected to start in August, and a loan from the Tonga Development Bank by these companies would be guaranteed by Government.
Road construction is vital and all roads will be build and tar-sealed during the next three years.
The price of fuel which is currently 65 seniti per litre will be increased to 70 seniti per litre.
However, he said that tax on imported vehicles, based on cubic capacity had dropped from 50 seniti to 35 seniti, and government would lose $1.5 million in tax.
Hon. Lavemaau said that government would also invest $3 million to provide 5000 water tanks for the whole of Tonga.
He said that $15 million had been set aside to prepare to counter the COVID-19.
He also pointed out that out of the $60 million that has been set aside to help the Private Sector, $3 m had been paid out, excluding the latest move by government to buy fish from local fish exporters and sell them locally, at a slightly lower price.
He was optimistic that the $60 million budget deficit could be reduced to $30 million .
He said that under the 2020-2021 National Budget $600,000 had been set aside for the establishment of an Anti-corruption Commission.
Roads and other potholes
The Prime Minister, Hon. Dr Pohiva Tu’I’onetoa reminded the House that he had made a promise in 2019, that if he became a Prime Minister he will build “all the roads in Tonga.”
PR Siaosi Pohiva reminded the House that it is illegal for government to set aside $12 million to build roads.
The PM reminded the House that three people were put in prison in the past for “for stealing information from the House...”
PR Mateni Tapueluelu responded, “we did not steal any information, we were given.”
The PM replied, “and you are following the same road.”
Hon. Lavemaau explained that good roads were essential and it would cost $15m to finance land transport. The guaranteeing of the companies loans from the Tonga Development Bank was “to confirm that there is a working contract between government and these companies.”
The issue of the government's $12m allocation for tar-sealing of the nation's roads remained an issue that the House needed the government to provide more details on.
Mateni repeated that the most urgent need for Tonga at the moment was to be able to counter the COVID-19, but not to build roads.
PR Semisi Sika, questioned if government had followed its proper Procurement Process. There was no clear answer to that question, other then trying to shift the debate to how the previous government dealt with government working contracts.
The refusal by Government to reveal the identities of three companies that have won a $12 million pa’anga road construction contract to construct 2100km of tar-sealed roads throughout Tonga has held up the debate for three days from 26-28 May.
He asked for government to reveal the names of the three companies that government has contracted to build all the roads in Tonga.
The Prime Minister assured the House that only these three companies could build and tar-seal the 2100km roads for Tonga, and they also offered that if government can’t pay them on time, they wouldl finish the job and government could pay them four or five years later.
Hon. Lavemaau said that government could not release the names of the companies. He assured the House that there was no risk for government; the risk is for these companies ’if government doesn’t keep their words.”
The other issues that were raised by members relating to the national Budget were overshadowed by the government’s big roads project.
Other issues
Losaline Ma’asi raised her concern over an increase in the allocation share for Civil Servants in the National Budget, from 53% in 2019-2020 to 62% in the 2020-2021 budget.
Relating to the problem of Illegal Drugs, she pointed out the need for Tonga to have its own laboratory to test illegal drugs, rather then sending them overseas for testing.
With regards to the food imports, she pointed out that Tonga imports 1.5 million kilos of chicken annually; meanwhile, there are only 500 chickens at the government chicken farm.
The Speaker Lord Fakafanua also expressed his concern of how long Tonga had been relying on Budget Support to balance its national budget, since 2007. “Now it is 2020 we are still not being able to stand firm.”
However, he was hopeful that the government's $60m stimulus package would energise the private sector.
Lord Fakafanua also reminded the House that 50% of farm land in Tonga remained uncultivated, and food security was a threat for Tonga’s future.
Mateni insisted for Government to reveal the names of the three companies that won the contract to construct the 2100km public road, and the loan that government had to guarantee with the Tonga Development Bank.
He questioned if government was helping the development of the Private Sector, why didn't they help the Real Tonga Airline.
Hon. Lavemaau, responded that the loan is about $12m, but he did not think it was wise for Government to reveal the names of the three companies.
Vava'u PR Dr Saia Ma’u Piukala and the former Minister of Health expressed his concern that the most important issue for Tonga at the moment is to ascertain that it has enough financial reserves to buy the vaccine for the treatment of the COVID-19 when it became available.
He was concerned that rich countries would buy all the medicine supplies and Tonga would not be able to buy any vaccine to counter the COVID-19 if it arrived in Tonga.
The Minister of Health, Dr ‘Amelia Afuha’amango Tu’ipulotu informed the House that she had been elected as the rapporteur of the World Health Organisation Executive Board, and all the members had agreed to buy the vaccine and make it available to all members of the World Health Organisation, rich countries and poor countries.
The Speaker, Lord Fakafanua at the end of the session at 4pm Thursday 28 declared the House closed until 10 am Monday,1 June.