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This section outlines official Press and Media Statements issued by the Ministry of Information and Communications in addition to Press Releases from the Prime Minister's Office and other Government Ministries and Departments.

Government 2013/14 Budget Estimate

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11 June 2013 The 2013/14 Budget Estimate was approved by Cabinet on Friday 31st May 2013.  The Budget Estimate will be submitted to the Speaker of the Legislative Assembly, Lord Fakafanua on Friday 7th June 2013.

This will be the second time the Budget Estimate will be posted at the Ministry of Finance & National Planning's website after its submission to the Speaker of the Legislative Assembly for public information.  This is part of Government's commitment to being more transparent with its budget process.

The theme for the Budget Estimate 2013/14 is "Continuing to Create Opportunities by Building on Inclusive Sustainable Growth". The government has a clear plan to build a growing economy in order to create more jobs and increase incomes, in the face of ongoing economic uncertainty in the world.  The Budget Estimate therefore focuses on the priority sectors that are consistent with the Tonga Strategic Development Framework (TSDF) priorities and also articulated in the Budget Strategy namely: (1) private sector development, (2) community development, (3) productive and effective public sector, and (4) sustainable fiscal consolidation.

Given the very tight financial conditions, only the most top priority initiatives identified in the Government Ministries' corporate plans and budget discussions could be funded.  Corporate plans, however, were used to align ministry/agency organizational and budget structures.  This will help to improve management and delivery.  During 2013/14 and beyond, Corporate Plans will be used to help in monitoring of progress in delivering outputs along with monitoring progress with collection of revenue and managing expenditure.

The total appropriation in the Budget, which covers all cash transactions, is $249.1 million, of which $198.8 million is government controlled (financed from government revenue plus Budget Support of $35.7 million) and $50.3 million for development projects (financed from cash grants from development partners).  There will be no increase in revenue fees and charges except that school fees of Government schools are expected to rise in the first term of 2015.

In addition to the appropriation, $108.5 million worth of in-kind funding has been identified for aid assisted projects. These cover projects where the expenditure is controlled by the development partner so the expenditure is not included in the appropriation. The total for the appropriation and the in-kind is $357.6 million, making it the biggest national budget in history.

Government controlled transactions are set to be balanced, and the expenditure will increase by $18.8 million.  In terms of budget distribution, almost all ministries/agencies got increased funding.  While much of the Budget is already committed to fund ongoing activities, these are some of the key new initiatives in the 2013/4 Budget.

i. Improve Community Development

  • Social Welfare Scheme for Elderly $1.7m;
  • Constituency Fund $2m;
  • Community Transport $0.48m;

ii.          Improve Private Sector Development

  • Manufacturing Fund $0.5m;
  • Tourism Marketing Fund $0.5m;
  • Agricultural Marketing Fund $1.0m;
  • Tax exemptions for fisheries industry;
  • Withholding tax under MOI $0.25m.

iii.          Improve Productivity and Efficiency of Public Sector

  • Ongoing reform programs (public enterprise, PSC remuneration review, public financial management);
  • Ministry of Health increase of $0.91m;
  • Ministry of Education & Training increase of $1.58m ($1m for Tonga Maritime Polytechnic Institute, $0.1m for Tonga National Accreditation Quality Board, $480k for community buses).
  • Allocation for Sports, including South Pacific Games, $0.8m.

iv.          Maintaining Sustainable Fiscal Consolidation

  • Repayment of external debt increased by $9.1m to about total of $20.1m.
  • Commission for Revenue Strengthening $0.25m.
In addition, Law and Order is very crucial for the development of the country particularly when the rate of crime is increasing and student violence is affecting the communities.  In this regard, these expenditure priorities will receive extra funding.

Law and Order

  • Commission for Youth and Student Violence $0.25m;
  • Increase in the budgets of Police, Prisons & Fire $0.8m;
  • Increase in the budget of Justice $0.88m;
  • Provision for new Chief Justice and Anti Corruption Commissioner $0.5m.
Lastly, the Ministry of Finance & National Planning has just received a correspondence from the IMF and World Bank that Tonga's Debt Sustainability Assessment (DSA) will soon be downgraded from "high risk" to "moderate risk" of debt distress.  The improvement in Tonga's risk assessment has been a result of (i) improving policy reform (ii) greater acknowledgement of remittance flow (iii) projected reductions in current debt levels over the next few years.  However, further consultations between the Minister for Finance and IMF and World Bank will take place as this recent DSA assessment will have some negative impact on the budget and project funding support given to Tonga. ENDS

Issued by the:
Ministry of Finance and National Planning, Nuku'alofa, 2013

Last Updated ( Thursday, 13 June 2013 11:16 )
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