From the House, by Pesi Fonua

Tonga’s economy is in trouble. The economic contraction during two years of border restrictions, has been accelerated by January’s devastating Hunga volcanic eruption and tsunamis, followed by the arrival of COVID-19 in February and further job losses. 

The Minister of Finance warned of a continuing contraction of the economy, the likes of which we have not experienced before. He told the House that he expected a further 29% contraction by June but, unfortunately, gave no useful context. When a fall of this much is forecast, surely it would be useful to know from when to when, and a percentage of what?

But it’s difficult for the public, journalists included, listening to the debate on the government’s 2022/2023 Appropriation Bill that was tabled by Hon. Tatafu Moeaki on June 2 to the Tonga Legislative Assembly. The budget documents are in his hands, but when members talk about it they don’t give away the details, references or any useful context that will make it understandable to the people outside of the house.

What we do know is that the Minister of Finance’s $764.7 million pa’anga budget for 2022/2023 is the government's biggest budget ever and, once again, we will be looking to development partners to finance a deficit of over $30 million. Foreign aid support for the recurrent budget has been a practice for a number of years now, in addition to the development funding received from aid donors.

The Minister of Finance told the Legislature that his Budget Estimates consisted of $437 million of government budget support and $327.7 million from development partners.

This compares to a $618.4m budget passed for the previous year 2021-22.

Hon. Moeaki told the Legislature that the government was looking at how it was going to set up Tonga economically to work through a whole lot of problems we face: the eruption, arrival of the COVID (omicron variant), a loss of jobs, a shrinking economy and other issues. Tonga’s foreign earnings will continue to drop.

“Remittances and foreign aid was good to pay overseas and for us to counter our deficit. In future we will be spending more to buy things from overseas,” he said.

“So we are working now trying to set up a system that can solve some of those problems,” he said, also bearing in mind that Tonga has very limited resources.

Repayment of the principal amount of Tonga’s multimillion dollar loan from China has started.

Speedy development needed

“We have to speedily develop Tonga to be able to counter all these problems,” said Hon. Moeaki.

An estimated $280 million damage was inflicted by the Hunga Tonga-Hunga Ha’apai eruption and tsunamis, only a few days after the new Cabinet had been selected.

He stressed peace and love for one another.

“God will guide us in Tonga,” he said.

Electoral challenges

So what was very clear from the debate on June 2, is that on top of the difficulties of financing another large deficit, Tonga must find a way of getting the parliament to work out how to solve some of these problems. 

Many of the members have different plans, and on top of that pending electoral challenges distracted the budget debate. 

The budget was ready in April but parliament’s sitting was delayed, meaning there is less time to debate the budget.

Last week, instead of immediately getting into the budget details, members were preoccupied by the fact that four of their number may have to be unseated by the House, including the Minister of Finance, after the court found they had committed illegal election campaigning. The unseating has been stayed for the meantime, pending appeals [2].

A Noble’s representative, Nuku, thought that the judgement was interfering with the people’s house.

Budget goals

The Budget goals were further clarified by Parliament's office in a statement following the debate.

The theme is “Accelerating Tonga’s climate and disaster resilience through Covid 19 recovery”.

The government has nine priority agendas, grouped into three thematic areas:

1. Building national resilience to external threats and risks
2. Improving the quality of services and affordability of government services to the community
3. Progressive economic growth.

After the House passed the First Reading of the 2022/2023 Appropriation Bill 2022, voting 19-0, they debated whether to continue to the Second Reading and then to the Whole House Committee or to refer the Appropriation Bill to the Standing Committee on Public Accounts.

Then 14 MPs voted in favour of referring the Appropriation Bill to the Standing Committee on Public Accounts, while six MPs voted against it. 

Parliament is now adjourned until Wednesday 8 June.