The Australian Government is providing an additional $1.57 million in aid to Tonga through the signing of a new Performance Partnership in Nuku'alofa on August 16.

The Performance Partnership, which will assist the Tongan Government in implementing important economic and public sector reform, was signed by Dr Bruce Hunt the Australian High Commissioner to Tonga and the Prime Minister Hon Dr Feleti Sevele.

In the first year of operation the Partnership will focus on improvements in budget processes, tax administration and implement a new compliance regime to support recent tax reforms.

Budget stability

In a statement on August 16, Australia's Minister for Foreign Affairs Alexander Downer said that these changes would help ensure Tonga's budgetary stability, and direct government expenditure to assist various development priorities in the country, like health, education, infrastructure and private sector development.

Dr Feleti Sevele thanked the Australian Government for this initiative and said it is important to ensure that funds are used for the purposes given and that the objective is achieved.

He said that a Budgetary Control Committee will be set up to ensure that expenses are properly controlled and used in the best way.

"Tonga is committed to the Reform program, which is an ongoing process that began in the last five years," the Prime Minister said.

Australia's total aid to Tonga amounts to AUD$12 million in its 2007-08 overseas aid budget.

HE Dr Bruce Hunt said that the additional aid is to support Tonga's reform progress under the Tonga-Australia Performance Partnership and the first to be regulated in the Asia and Pacific region in this financial year. This is a tribute to Tonga who has been keen on tax reform and spending control, he added.