THE Hon. Minister of Finance and National Planning yesterday announced a total expenditure budget of $784.2 million for financial year 2023/24, $419.5 million is recurrent (53.5 percent) and $364.7 million development (46.5 percent).
Of the total budget, 65.8 percent or $515.8 million is the appropriated cash, while 34.2 percent or $268.4 million is donor in-kind.
Hon. Tiofilusi Tiueti also revealed an expected budget deficit off 27.2 million after comparing the revenue collection and government expenditure for 2023/24. This is mainly attributed to the commencement of the China Export-Import Bank loan repayments.
In the Budget Overview Financial Year 2024, the share of the development budget in 2024 financial year is estimated to increase to 46.5 percent from 42.9 percent in the current financial year while the recurrent budget decreases. This, however, reflects the stronger partnership between government and development partners including the provision of additional budget support
Government’s Appropriation Bill was tabled in Parliament yesterday to appropriate funds for the government services. It was read first and second reading before it was referred for further discussion in the Whole House Committee.
The Minister of Finance’s Budget Statement 2023/24 said the second budget of the current administration focuses on economic recovery, greater resilience and sustainability. It is inspired by the theme: “Partnership for greater resilience and sustainability to restore inclusive growth.”
Its theme represents the underlying efforts of initiating economic recovery through continued collaboration between all key stakeholders, in order to improve the standard of living of all Tongans. It puts people first and focus on the life and livelihood of all Tongans.
Hon. Tiueti told Parliament that this is a significant transitional period for Tonga in its journey to recover from the impacts of the Hunga Tonga Hunga Ha’apai volcanic eruptions and tsunami as well as the COVID-19 pandemic in 2021. Therefore, the budget prioritises those in our community who have been especially hard hit by these recent economic distresses. It is also designed to lessen the economic strains endured by our people so that Tonga may reach the desired level of economic prosperity, as outlined in the Tonga Sustainable Development Framework (TSDF) II.
The Hon.Minister also asserted Cabinet’s commitment to its nine Government Priority Areas (GPA) which is categorised under three thermatic areas including the National Resilience, Quality Services and Affordability and Progressive Economic Growth.
He highlighted that this budget prioritises the people of Tonga and focus on their life and livelihood. “It is, therefore, a call for all key stakeholders to collaborate in the economic recovery for Tonga’s national resilience in the future.” Government also understands how critical it is to give priority to areas where the public has the greatest needs and to make sure that no one is left behind with government services.
The biggest budget allocation in the Budget Estimates 2024 is fund allocation towards the Ministry of Infrastructure (MOI) and the Ministry of Finance and National Planning (18 percent) followed by the Ministry of Education and Training (MOET) with 17 percent and nine percent allocation for both the Ministry of Health and MEIDECC.
Hon. Tiueti says government’s loan repayment totalling at 67.1 million for 2024 is under the Ministry of Finance’s vote. This is an increase of 23.5 million from 43.6 million in the current financial year. The biggest budget allocation is the loan repayment to China for the reconstruction of Nuku’alofa following the 2016 riots.
The Budget Estimates 2023/24 also provides fund allocation of .8 million for the establishment of a new Anti-Corruption Commission.
The total budget funded from donor partners for 2024 is about $364.7 million. Of that amount, $96.3 million is cash (26.4 percent) while $268.4 million is donor in kind.
The Hon. Minister of Finance also revealed government plans to finance the budget deficit from its foreign reserve in the next three years. He said even after covering the deficit, Government’s foreign reserve remains in a satisfactory position at 23.9 million or more by 2026. In addition, he said Cabinet will continue to remain in close partnership with donor development partners for additional budget support.
The Budget Statement for 2024 also acknowledges the continued support of Tonga's development partners, the Tongan diasporas, especially during the past years, with anticipation for continued partnership in helping achieve Government plans and priorities for the kingdom.
Meanwhile, the Whole House Committee also approved a motion by the Deputy Speaker Lord Tu’iha’angana for referral of the Budget Statement and Budget Estimates 2023/24 to the Public Accounts Committee (PAC) for further scrutiny.
For that reason, the Legislative Assembly has been adjourned to reconvene next Monday. This is to allow Parliament’s PAC Standing Committee to meet today and tomorrow to further review the proposed budget. Other MPs who wish to attend the PAC Committee meeting are allowed to do so.