From the House, an English translation summary from the Tongan vernacular, by Pesi Fonua. Tonga Legislative Assembly, Minute No. 6, June 18, 2007.



- The Prime Minister, as the Chairman of the Board of the Tonga Broadcasting Commission, had warned the Manager and senior executives of TBC that there is a limit to Media Freedom. He had warned the TBC about broadcasting "biased reports...…criticising government" and he therefore thought the stopping of the broadcasting of political news was appropriate.

- 'Akilisi Pohiva moved for the introduction of a Land Tax and If people did not want to use their land then it was time for government to take away the land. His proposal was not supported.

- A Bill for the Income Tax Act 2007carried.

- Appropriation Bill 2007-08 carried.

- A team from China was in the country to negotiate for the loan.

- The Minister of Finance said there is a $10m deficit in his current budget for 2006-07, but he was hopeful that he would end up with a balanced Budget because he is going to put the pressure on businesses to pay up their tax arrears, which is between $8-10 million.

- Cleaning up Nuku'alofa after 16/11 cost $3-5 million.

- 'Uliti Uata thought that government should not interfere with the rebuilding of the town, he said it is the responsibility of the business people, "they should have been prepared to build in case of a fire or a flood."

- The Minister of Justice said there are members in the House who have been charged with crimes relating to November 16, and it was difficult to have an open discussion. But she hoped that those members have a living conscience.

Monday June 18, 2007:

SAMIU Vaipulu reported to the House that the Vaipua Bridge in Vava'u would be closed for public use by Wednesday June 20. He said that the bridge is a vital link between Neiafu and the western district of Vava'u. Samiu recalled that the Acting Governor, Hon. Tu'a Taumoepeau Tupou said that a replacement bridge has been procured but there was no fund to ship it over to Tonga.

The Acting Governor of Vava'u said that the bridge belonged to the Tonga Defence Services and the TDS had acquired a new bridge in New Zealand, and the Minister of Finance had agreed for them to find a source of funding for the freight, and they have found some funding for the shipping and the installation of the bridge, and they are working to get it done soon.

Auckland meeting

'Akilisi Pohiva reported to the House about a meeting that he attended in Auckland. The theme of the meeting was "Path way for the future". He said it was a very important meeting and he wished that it had been first held in Tonga.

The Minister for Vocational Education and Sports wanted to know if the meeting was a parliamentary meeting, and if it was not than there was no point of raising it in the House.

'Akilisi said that it was not a parliamentary meeting, but it was attended by a representative of the government.

The Prime Minister, Dr Fred Sevele, said that government did not have a representative at the Auckland meeting.

'Akilisi said that the Prime Minister's political advisor spoke on the current status of the Tongan government. He said that people who attended the meeting agreed that it was time for members of Parliament, the Nobles' Representatives and the People's Representatives to work together and to share ideas. He asked the Prime Minister to set a direction to satisfy the Tongans in New Zealand.

PM warns TBC there is a limit to media freedom

On a different issue 'Akilisi asked government to clarify a news item from Radio Tonga, saying that the Tonga Broadcasting Commission will no longer broadcast any political news.

The Prime Minister said that the House was well aware that the problem last year was initiated with the broadcasting of political lies on television. He said that government disagreed with the misuse of Freedom of Speech. He said that last week there were complaints from the public and from Cabinet members about biased and untrue reports criticising government, but government was not given the chance to respond to those criticisms. He said it was not the first time that it happened, and he, as the Chairman of the Board of the Tonga Broadcasting Commission, had warned the Manager and senior executives of TBC that there is a limit to Media Freedom.

The Prime Minister said that the General Manager of TBC was called to a meeting attended by the Deputy Prime Minister and the Minister for Public Enterprises. The General Manager had apologised for the shortfalls in the service, but unfortunately some of the staff had their own political agendas, but she would put an end to it.

He said that if what the General Manager said was right then the stopping of the broadcasting of political news was appropriate. He said that he had said it before for public servants, including those who work for government boards and enterprises not to get involved in politics.

'Uliti Uata asked the Prime Minister to clarify what he has just said, if there will be no more political news or if he meant they would correct things before they start broadcasting political news again?

He also asked the Prime Minister to allocate a time when they could discuss matters that led to the disruption last year.

The Prime Minister repeated the comment that was made by the General Manager of TBC that some of her staff have their own political agendas and it is not good.

"Are we going to ignore that? No."

No reconciliation

With regards to the request for dialogue, he said that 'Uliti and 'Akilisi were well aware that since he joined government, he had been pressing for dialogue.

"There was an agreement but I was betrayed. There is nothing like that in this world, and week after week I have been accused of lying. I think only Jesus can tolerate that, Speaker."



The Prime Minister said he would repeat what they had told Church Leaders: that there will be no reconciliation, until there is confession, and admission of guilt by those who initiated the destruction.

The Prime Minister repeated. "No. They have asked for dialogue and my answer is. There will be no reconciliation, Speaker."

'Akilisi reminded the Prime Minister that a court case is in progress. If they confess they may all end up at Tolitoli. He asked the Prime Minister not to use the word confession. He should say sorry to the people.

The Prime Minister said that was why this issue should not have been raised in the House. He proposed for the House to proceed with its working agenda for the day.

Income Tax Bill

The Legislature dissolved into the Whole House Committee and the Chairman of the Committee, Noble Tu'ilakepa took his chair. He called for the committee to proceed with a Bill on Income Tax.

Clive Edwards reminded the House that in 2003 speeches were made in the House that if the law to introduce Consumption Tax was passed there would be a reduction in Custom Duties and Income taxes.

The Minister of Finance said that in 1977 the more a person earned, the higher was the rate that he was taxed by, then in 1986 it was decided to have one flat rate of 10%, but it was still considered not to be fair, and then the latest move is to increase the threshold from $2,500 to $7,400.

Clive said that a 10% tax is imposed on salaries from $7,400 upward to $30,000, and from there upward the tax is 20%. He said that a 1% levy is added on, making the tax rate 11% and 21%, at the same time the personal exemption for donations and insurance have been terminated. He asked if this new income taxing system was a WTO requirement, and secondly did the Minister think it is a fair system.

The Minister of Finance said that his answer to the first question was that the WTO had no connection with this new income regime. He explained that WTO was concerned only with Custom Duties. With regards to the 1% levy he said he would give more details when they discussed the actual estimated budget, but in brief it was to fund Technical Training.

'Akilisi Pohiva supported the new rate but expressed his concern that in some cases salaries were hidden in allowances, which were tax exemptions.

The Deputy Prime Minister supported the concern of the Member for taxation to be properly implemented. He reminded the House that the recommendation from the Finance Committee on the salaries of the House, was for Allowances not to be taxed.

'Akilisi (a member of the Finance Committee that made that recommendation last year) responded for government to introduce that idea next year.

'Akilisi proposes land tax

On a different matter he moved for the introduction of a Land Tax. The more land you own the more you will be taxed. He was certain that it would encourage people to utilise their land, but if they did not want to use their land then it was time for government to take away the land and give it to whoever wanted to use the land.

"It is for you (government) to decide what to do with places like Tofua, which should not be taxed because no one lives there. There must be fairness," he said.

Lasike said that the member was contradicting himself, because how can there be fairness when you tax the landowners in other places but not those in Tofua?

'Akilisi said that they were looking for a source of revenue, and this is an area where government can get revenues. He said that the owner of a tax allotment who is residing overseas could demand that whoever is using his land in Tonga should pay this Land Tax. He said that for all the time he had been in parliament this is the first time for any one to introduce the idea of Land Tax, and he hoped that government would have the Political Will to introduce a Land Tax.

The Chairman reminded the member that there is already a Land Tax, of 78 seniti an acre, but how much did he want to increase it by?

'Akilisi said he could not give him a figure; it was for the government to decide.

Clive reminded the House that the Land Tax is 90 seniti an acre.

['Akilisi's proposal for a land tax was not supported].

The Minister for Sports and Youth moved for the Committee to go back to their working agenda.

Personal exemptions removed

The Minister of Finance wanted to further clarify the issue raised by Clive about Personal Exemption. He said that 13,000 people pay PAYE. He said that it was a big task for his staff to calculate their claims. He said that a solution to this work problem was to increase the threshold from $2,500 to $7,400. The tax free amount balanced out their personal claims. He said that the 1% Levy was simply to fund technical training.

The committee dissolved into Legislature, and the Speaker took his Chair.

The Speaker called for the second reading of the Bill for the Income Tax Act 2007. It was carried 17-2. Against were 'Isileli Pulu and 'Ulliti Uata.

The Bill also had its third reading and it was carried 17-2. Against were the same PRs.

Power Board Act

The Speaker said that next in the agenda was the Bill to amend the Power Board Act, but it was still with the Law Committee.

Appropriation Bill

He called on the clerk to give the first and second reading of the Appropriation Bill 2007-08. The Bill was carried in both readings 16-0.

The Bill was then tabled into the Committee for debate. The Speaker said that in the Committee they would start off with the Minister of Finance presenting his Budget.

The Legislature dissolved into Committee and the Chairman of the Committee took his chair.

The Minister of Finance said he would start by explaining how he had spent the budget for the current financial year 2006-07 before he went on to the new budget for 2007-08.

He said that the estimated expenditure for 2006-07 was $158 million, and the revenue collected, excluding loans and aid was $154 million, so the deficit was $4 million. He said he was hopeful that he could collect more revenue during the current financial year, but unfortunately two major events took place last year:

1. The passing away of the late King Taufa'ahau Tupou IV. He said that $1 million was taken away from his vote to cover funeral expenses.

2. The second event was the destruction in Nuku'alofa on November 16 last year and government had to pay for the cleaning up, plus the overtime salaries of police and soldiers.

He said that the wharf and the airport were closed following the riot and the revenue collected was only $147 million, so the overall deficit for 2006-07 was $10 million. He was hopeful that he would end up with a balanced Budget because he is going to put the pressure on businesses to pay up their tax arrears, which is between $8-10 million.

He said that for the coming financial year they would be able to collect $152.6 million. The revenue from Income Tax will drop from $26 million to $20.5 million. The reason for that was because 154 businesses were burnt on November 16, and the damage had been estimated to be over $120 million.

He said that the revenue from Custom Duties would also drop because of the introduction of a 20% flat rate on all imported goods. The revenue from Consumption Tax would also be declining.

The Minister was hopeful that the government earnings from dividends and the sales of public enterprises would bring in $11.4 million. The fees and charges for public services, which had not been increased since 2002 will be increased. He was also hopeful that they would be able to bring in $6.3 million from the sales of government bonds.

The government expenditure on public servants will drop from $87 million to $76.9 million, but for contingency spending it has gone up from $2.7 million to $5 million. The Minister was hopeful for a balanced budget of $152.6 million.

He said that he would present to the House the details of the loan of $100 million from China and $25 million from the Asian Development Bank once they are approved by Cabinet.

Nuku'alofa clean-up cost $3-5 million

The Chairman opened the floor for debate.

'Isileli Pulu wanted to know if the $3-5 million that was used to clean-up Nuku'alofa was government money or was an aid from Australia.

Minister of Finance said that the $3-5 million is government money. The grant from Australia is different. They gave a grant of $1 million and NZ also gave $500,000. He said that these are excluded from what they have spent to send over soldiers and police. Under a separate scheme, the Business Recovery Fund, Australia contributed $1.5 million and New Zealand $2 million.

'Uliti Uata wanted to know the exact amount that government spent in the cleaning up of Nuku'alofa.

The Minister of Finance repeated between $3-5 million. He said that the House has allocated $2.5 million for a royal chapel, so government took that money and spent it on the cleaning-up, plus funds that were allocated to subsidise education.

"We borrowed that money to be repaid later. There was also the $1.9 million to pay for diesel that was needed by Shoreline and that is how we reached $3-5 million."

'Isileli Pulu asked the minister to present what he has been talking about in a written form so that they could follow. Like, was the money for Shoreline an advance or a loan, and what was the interest rate?

He proposed for the House to be postponed until the following day, giving them a chance to get some information together, because he wanted to talk about the current estimate, the Budget Statement and the new budget.

The committee dissolved into Legislature, and the Speaker took his Chair.

Loan from China

The Prime Minister told the Speaker that a team from China was in the country to negotiate for the loan, and a number of Cabinet Ministers would be involved in this negotiation, so he asked if the House could close until Thursday morning, allowing them to have their meeting, while the rest of the members were to study the budget statement and the budget.

'Akilisi expressed a view that PRs should be part of the government negotiation team with the Chinese.

The Speaker reminded the member that to negotiate a loan is for the government to do and not by parliament.

'Isileli Pulu said that a government team had been to China to negotiate this loan, and he wondered who paid the expenses. He suggested for the PM to go on television and explain to the people about the proposed loan and what the money was going to be used for.

The Prime Minister did not know which television station the member watched, because he had been on TV a number of times, and there had been press conferences and press releases on the loans. With regards to their trip to China, he told the member the China paid for it, and it was a successful trip.

'Uliti Uata said that government should discuss the matter with the people before they went and negotiated for the loan.

The Minister of Justice reminded the PRs that according to the constitution and the laws of the country, the government is the executive that runs the country, and parliament is the law making body. She felt that the PRs had forgotten their role.

'Uliti did not think that the Minister Justice understood what he was talking about.

"But it is like this. My family, if we want to borrow money, we talk about first why we borrow."

He also thought that government should not interfere with the rebuilding of the town, because it is the responsibility of the business people, "they should have been prepared to build in case of a fire or a flood." He felt that the most government could do was to allow business to bring in construction material duty free.

The Minister of Justice said that it was very difficult to discuss this matter in the House, and that was why she proposed a motion before. There are members in the House who have been charged with crimes relating to November 16, and it was difficult to have an open discussion. But she hoped that those members have a living conscience because she can't talk about what she talks about because she is bound by the law and the constitution.

'Isilelil Pulu said that there was no dead conscience in the House, they were all living consciences.

The Speaker called for the House to close until Thursday morning.