By Pesi Fonua

There will be no reduction in the size of Tonga's civil service in the 2012-13 budget, according to Tonga's Prime Minister Lord Tu'ivakano, whose new government, this year supported with a foreign aid-funded budget lifeline, hopes to advance Tonga's political and economic development, somehow, during its remaining three years term in office.

In a pre-Christmas interview with Matangi Tonga Online, the Prime Minister, said that despite a reduction in the number of ministries and CEOs on July 1, "there will be no reduction in the size of civil service."

Instead, the new government hopes to increase its revenue through more efficient operation of public enterprises; and by closing down or downsizing Tonga's foreign missions.

" 'Atalanga will become a consulate for Tonga in New Zealand, and an assistant will be sent to help Sitafoti 'Aho," Lord Tu'ivakano said.

"With London, His Majesty has agreed to let it go, because they no longer have a mission here. But we will have an office in Brussels.

"We are also looking at Canberra, with the possibility of having just one person there. The big expense on overseas missions is on family dependents, their allowances are very costly," he said.

Structural changes

On December 23 the Prime Minister outlined some of the structural changes that his government will introduce to advance Tonga's political and economic development amidst the global financial crisis, mounting debts, and increasing reliance on foreign aid, including budgetary support funding to balance its annual budget.

(In the current year, recurrent budget support came from New Zealand $3 million, Australia $3.9 million and the World Bank $8.9 million).

In the New Year Lord Tu'ivakano said that 13 new government ministries would be officially put into place, including a new Ministry of Internal Affairs. The number of Chief Executive Officers will also be reduced from 26 to 13, but underneath those CEOs will be directors to oversee the operations of departments within each ministry.

"There will be a new Ministry of Internal Affairs which will oversee the Town Officers, District Officers, Youth and Sports and Women's Affairs; and the two governors," he said.

In spite of a reduction in the number of ministries and CEOs, he said, "there will be no reduction in the size of civil service."

Biggest pay-roll

Government is the biggest employer in the country with about 4,000 civil servants on its payroll. The burden of what critics believe is an oversized civil service is an issue for taxpayers, when as much as 90 percent of the budget allocations of some ministries are spent on salaries, leaving very little to provide a quality public service.

A highly paid civil service that provides a poor quality service has been a perpetual public concern for years, particularly when the business community increasingly feel the burden of taxation, along with heavy penalties and increasing fees in a stagnant economy.

It is clear that Tonga's three main foreign earnings industries, Agriculture, Fishing and Tourism are under stress, with the export Fishing Industry being declared "dead" by officials from the Pacific Islands Tuna Association; and neither Agriculture nor Tourism seem to be in any position to be dependable sources of foreign earning.

The export of Tonga's agricultural products, such as watermelons to the New Zealand marketplace remained problematic.

Polynesian Leaders Group

The Prime Minister was optimistic that the newly formed Polynesian Leaders Group, which he said has been established on the foundation of the Polynesian Heritage Group that was initiated by the late king, Tupou IV, the late Ratu Mara, the late Maori Queen and others, could provide more opportunities for Tonga.

"We would like to take it a step further and encourage trading among ourselves. We are having problems selling our watermelons to New Zealand, but we can export them to our Polynesian neighbours."

The Prime Minster though made it clear that New Zealand with the biggest Polynesian metropolitan city in the world, Auckland, was not a member of Polynesian Leaders Group

With tourism, the Prime Minister said that the Tonga Visitors' Bureau would be restructured during the coming financial year, to turn it into a public enterprise.

Operational finance

So how is Tonga hoping to continue to finance its operations?

The Prime Minister believed that more efficient Public Enterprises could generate more profit, and would be able to pay government dividends.

He admitted that some of these Public Enterprises had never ever paid any dividends to government.

"But if they do, like what is happening in Singapore, government will have enough revenue to finance its operation," he said.

Cost cutting

Currently, without enough revenue to fund its operations and salaries, some cost cutting appears inevitable.

Lord Tu'ivakano said a cost-cutting measure that his government would introduce in the new financial year was a trimming down of Tonga's diplomatic missions overseas.

He said that the Tonga's High Commission in Wellington had been terminated, and the 'Atalanga Royal Residence in Auckland would become the residence and office of a Tongan Consul General in New Zealand. The current caretaker of 'Atalanga, Sitafooti 'Aho would become the Consul General, and an assistant would be sent from Tonga.

Other missions including the Tonga High Commission in Canberra, would be trimmed down to be just one person, he said.

"The big expense of overseas missions is on family dependents, their allowances are very high. With London, His Majesty has agreed that we should let it go since the British no longer have a mission here, but we will have an office in Brussels," the Prime Minister said.

Prior to the election, Lord Tu'ivakano was the Minister for Training, Youth and Sports, and he was a member of Cabinet and the Privy Council.

Political reforms

With regards to the Political Reform the Prime Minister said that the King wanted to improve the political structure that had been put in place, by allowing the system to evolve.

But a specific area that the Prime Minister would like to address is the working relationship between the Cabinet and the Privy Council, because though the King had surrendered his executive power, the Prime Minister said that the Privy Council could implement decisions without the knowledge of the Cabinet.

An example of such decision-making was the establishment of Royal Commissions. "which became known to Cabinet only when we were given the bills to pay," Lord Tu'ivakano said.

He remained doubtful over the usefulness of some of these Royal Commissions. In particular, he queried the value of the work of the Royal Land Commission.

"Land is something very close to us, and it is very much part of our tradition and culture."

As an estate holder himself, the Prime Minister felt that the present land tenure should be left as it is.

He warned of the danger of Tonga trying to follow international trends, such as Tonga's rushing into ratifying the WTO treaty, then later discovering that it was not such a good idea.

He recalled that one of the reasons why Tonga rushed to ratify the WTO treaty was to make it possible for TongaSat to negotiate with the USA government for an orbital slot, but then after committing Tonga to the WTO treaty, TongaSat was still unable to take possession of the orbital slot.

Women's land rights

"We are taking a cautious approach to the CEDAW, because if we ratify CEDAW, it will have an impact on our land ownership and our culture," he said.

NDC

With regards to the current government's mission to acquire a comprehensive report on how the Nuku'alofa Development Corporation (NDC) administered the reconstruction of Nuku'alofa, utilizing a $118 million government loan from China, Lord Tu'ivakano said that the task was difficult because the authority to spend the money had changed hands a number of times.

He said the question remained: "why was the right to spend a government loan given to a private company?"

Lord Tu'ivakano became the chairman of the NDC, when he became Prime Minister, following the parliamentary election of November 2010.

He said that since then he had became aware of how the authority to oversee the reconstruction of Nuku'alofa changed hand. At the beginning the Urban Development Division and the Ministry of Works were responsible, then the authority was taken away from them and given to the NDC. Then the NDC created what he referred to as the "PMU" and the authority was given to them. "A private company then had the authority, it became the procurator, the contractor, the sub-contractor, and the quality controller.

"The issue was the taking of government loan money and giving it to a private company to manage."

The Prime Minister said that it was definitely not professional for the contractor that built the construction, to be the same company that assessed the quality of the work that had been done.

His government has hired a team of consultants under a parliamentary committee to investigate how the loan funds were spent.

"The research is to look at how the funds has been allocated. We will look at the report at the end and assess what we are going to do next."

Meanwhile, the reconstruction of Vuna Wharf has finished, and the final draw down of the $118m loan from China will be in March.

The Prime Minister however is not happy with how the $118m loan has been managed. He pointed out that the construction of a landing berth and boulders for ships to tie to at Vuna Wharf has been completed but the road to the wharf needed to be reconstructed, and there were other buildings planned for construction in central Nuku'alofa but there was no money left.

Meanwhile, the Parliamentary Committee that is currently researching and writing a report on the operation of the NDC, is the second group that has been funded by government. The report of the first group was rejected by government as being out of step with their Terms of Reference. The second group, a Parliamentary Committee that has hired overseas consultants to help with the task, has been reported to have invoiced government for hundreds of thousands of pa'anga.

The Prime Minister said that the fees of the Parliamentary Committee are paid out of "Budget Support Fund" from aid donors, and he did not think that the public should worry about it.

"The funding of the research into the NDC comes from the budget support fund, and it shouldn't be any worry," he said