(Editor's note: the Budget statement and Budget have not been released to the press, so all the figures presented here are sourced from the minutes of the debate and cannot be verified. Likewise, the comparative year figures cannot be clarified or verified without sight of the Budget columns.)

Debate continued, on Thursday June 17

Vote of the Ministry of Finance

Minister of Finance ...– outlined ten working programs that the ministry will be undertaking during the coming financial year and the amount of money he allocated for each program. Almost all of the expenditures on individual programs have increased, to more than $100,000.

With regards to public debts the allocation for this program dropped by $838,000, but he said there was an increase in the area of loans guaranteed by government, particularly loans by Royal Tongan Airlines, which is in liquidation.

He said that loan repayment had been made easier, when the value of the Tongan pa'anga increased by 9% against the US dollar between July last year and March this year.

'Isileli Pulu ...– wanted to know why government opted for a settlement out of court over the loss of the $56.1 million Tonga Trust Fund.

Minister of Finance ...– replied that a settlement had not been finalised, and negotiation is continuing.

'Isileli Pulu ...– wanted to know if government guaranteed the RTA loan from the Tonga Communications Corporation, and the minister replied yes.

'Akilisi Pohiva ...– wanted to know the amount of money government had to pay out this year because of loans that it guaranteed.

Minister of Finance ...– said that in the coming financial year the amount is $3.5 million, and $2 million off that amount is for the RTA loan.

'Akilisi Pohiva ...– suggested for the RTA loan to be put aside because he thought that the lease agreement between RTA and Royal Brunei Airlines was illegal. The agreement was signed on November 25, then government was forced to guarantee the loan which the Privy Council finally agreed to on November 26. He suggested for government not to settle this loan, awaiting some legal clarification.

Minister of Finance ...– pointed out that the loan quarantee that had to be paid out was made in 2000, a loan to build a hangar at the airport.

With regards to the loan quarantee with RBA in 2002 for the Wet Lease of the 757, he said that the Wet Lease was cancelled in June 2003 and converted to a Dry Lease, therefore the loan quarantee was also cancelled in June.

Dr Feleti Sevele ...– wanted to know what would happen to the $1.6 million loan by RTA from TCC which was also quaranteed by government.

Minister of Finance ...– replied that they were working to cancel that quarantee during the coming financial year.

Dr Feleti Sevele ...– so the loan from TCC will not be repaid?

Minister of Finance ...– there are a number of approaches that we can make. We can repay the loan at once, or we can make payment installments over a period of time.