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Budget reveals measles' $22 million impact

Economic assessments of the measles epidemic suggest it may have dented Samoa's economy by $22 million, as the Government considers economic stimulus measures to combat the downturn. 

The scope of measles' impact was revealed by Minister of Finance, Sili Epa Tuioti during his Ministerial speech on the First Supplementary Budget for the financial year 2019-2020 tabled before a sitting of Parliament on Tuesday.

“The past few weeks have been grim for the people of Samoa, as the measles epidemic has left many families distraught at the loss of loved ones," the Minister said. 

"What is certain is that the Government will revisit all its existing policies and frameworks to secure the nation from any future epidemics.” 

Sili, on behalf of the Samoa Government, expressed heartfelt appreciation “for the outpouring of love and assistance that flowed into the country from all corners of the globe particularly our development partners and partner organisations that pooled together to assist in our national emergency operations towards sparing the lives of our people from this measles epidemic".


He also commended the efforts of the public and the Disaster Advisory Committee in assisting those affected to minimise the spread of the measles and in particular the mass vaccination efforts by Government.

He said the Government had released $6 million tala from its unforeseen expenditure budget when the Disaster Advisory Committee advised of its immediate needs to combat the measles outbreak.   

But he also suggested that the Government may have to look at stimulus measures to contain the economic impact of the measles crisis. 

“At the moment, efforts continue to address these needs as well as others in the continuing fight to eradicate measles from Samoa," he said. 

“Mr. Speaker, allow me also to state that the current estimated Budget Deficit of Government remains at 1.2% of GDP. 

“Although there are additional expenditure items being submitted in this Supplementary Budget, the Government continues to adhere to its medium to long term fiscal targets by ensuring that expenditure programs are maintained within the growth capacity of the economy.

"It has now been two months since Samoa has been affected by the Measles Epidemic and the effects on the economy and growth are becoming more and more evident therefore [I am] calling [the] Government into action to ensure that the economy bounces back quickly."


He noted the National Provident Fund released $7.8 million tala to finance a special early dividend to all its members in a bid to try and generate spending and therefore stimulate economic activity within the country.  

“The same essence is carried within the First Supplementary Budget now before Parliament, as Government’s commitment to continue its operations and developments in support of economic growth," he said. 

According to Sili the Supplementary Budget carries key priorities for the Government that includes: ensuring the recovery and ongoing health of the nation; reviving the tourism industry; and increasing scholarship opportunities for students and measures to combat the effects of climate change. 

The main changes announced in the supplementary budget include a request for an overall additional expenditure of $23.6 million which will be financed by additional receipts of more than $13 million tala including: 

Revenue from the Ministry of Public Enterprises ($3,801,186) which the Minister said represented dividends from the operation of Government corporations, and the conclusion of the Samoa and Virgin Australia joint venture, 

Receipts from the  Pacific Games to the value of more than $5.6 million, derived from sponsorship packages and payments from participating countries and $1.8 million from the the sale of Japan International Cooperation Agency buses. The Ministry of finance also raked in an additional $1.1 million from the fuel levy. 

The Government has also included in its revised Government income a catastrophe donation from the World Bank worth $8.8 million tala; reshuffled expenditure from the delay of planned Government initiatives including a community legal centre under the Ministry of Justice and Courts Administration; and $9 million in miscellaneous grants. 

On the expenditure side, the Government will outlay a further $4.3 million tala on the new Tanumalala prison, comprising additional workers, staff quarters and a climb proof fence. This follows the breakout of two prisoners in October from the newly built prison.

Other significant expenditure includes an additional more than $8 million for a disaster recovery fund to assist in the eradication of measles and $250,000 for an advertising campaign to help offset done to Samoa's reputation to travelers arising from the recent measles crisis. 

Recent figures from the Central Bank showed that tourism was the fastest growing sector of the economy and the main driver of economic growth which has amounted to 5.7 per cent in nominal terms. 


Full Supplementary Budget below. 

Mr. Speaker,

I would now like to present the key parameters of the First Supplementary Estimates 2019/20 for the information of Members:

The overall total additional expenditures being requested under this Supplementary budget is approximately $23.6million and will be financed as follows:

Firstly, Additional Receipts of $13,620,404 which includes: 

Ministry for Public Entreprises: $3,801,186 

An additional $3,801,186 is being declared under Dividends from Government Corporations

These monies is a portion of proceeds from the conclusion of the Samoa and Virgin Australian Join Venture; 

Ministry of Finance: $9,280,098

Receipts from the Pacific Games - $5,628,695

These are funds remaining after the conclusion of the Pacific Games and include receipts from sponsorship packages as well as payments from countries for the board and meals provided for their athletes and officials;

Fuel Levy - $1,100,000

Ministry of Customs and Revenue - $539,120

Additional Ministry to Ministry VAGST resulting from the ad

Proceeds from the sale of JICA buses donated for the UNSIDS - $1,844,897

World Bank – SAT$8,820,000

Catastrophe and Disaster Drawdown Option; 

This financing drawdown option of USD$3.5million or SAT$8.82million is an im

Third, Reshuffled Expenditure Programs - $1,156,549


There are plans to introduce in January 2020 a fuel levy of 2sene per litre in January 2020 and will be used to assist in the maintenance and building the resilience of roads, drainages, footpaths and walkways for the country;

Proceeds from the sale of JICA buses donated for the UNSIDS - $1,844,897

The conditions for the donations of buses from the JICA was that they would be sold and the proceeds set aside until the two Governments can come to an agreement on how to utilize the funds.  In 2016, it was agreed and approved by Cabinet that these funds would be used to finance the security fence for the Tanumalala Prison.

Measles Epidemic Donations - $706,506

The total donations declared within this Supplementary Budget are all those received before the 11th of December 2019.  These donations were tallied and collated to make the current budget timeline however any and all that were received thereafter will be declared in the Second Supplementary Budget of June 2020;

Ministry of Customs and Revenue - $539,120

Additional Ministry to Ministry VAGST resulting from the additional expenditures:

A total of $539,120 in VAGST receipts was created due to the increase in operational expenditures of Ministries being requested from the First Supplementary Budget;

Secondly, Additional Grant Receipts of $9,338,813


World Bank – SAT$8,820,000

Catastrophe and Disaster Drawdown Option; 

This financing drawdown option of USD$3.5million or SAT$8.82million is an immediate liquidity resource to assist the Government in responding to immediate relief needs during a disaster as well as to assist in post recovery efforts;

United Nations’ organisations’ combined assistance for the Community Sector Measles Outbreak Response Programme SAT$518,813

Third, Reshuffled Expenditure Programs - $1,156,549

Ministry for Justice and Courts Administration: 

Community Law Centre (-$350,000):

The Ministry for Justice have confirmed that due to delays in preparatory works they will not be able to action this initiative within the current financial year.

Ministry for Prisons and Corrections Services; 

Retention (-$806,549);



Following the inclusion of this provision within the Main Estimates, the Ministry reviewed the construction contracts and ascertained that the Retention had to be paid out within the last fiscal year 2018/19.  Payment for retention was therefore made with savings in the previous fiscal year while the current provision will be reshuffled for other priorities of the prison;

Mr. Speaker, I will now highlight the key Additional Expenditures, inclusive of taxes, being requested under this First Supplementary Budget:

Expenditure Programs

Ministry of Commerce, Industry and Labour - $64,055:

Expenses for the Regional Seasonal Employment Scheme Australia Liaison Office

A liaison officer for the scheme has been established in Sydney Australia.  The provision here is to facilitate the operations of the liaison office to include remuneration and office equipment;

Ministry for Justice, Courts and Administration - $505,455:

Court House Savaii Preparatory Works - ($92,000)

Works have begun towards the development of a court house and offices for the Ministry for Justice in the Salelologa Township.  The provision is to assist in preparatory and tender works for the construction which will be financed in the fiscal year 2020/21;

Conference on the Right of Child ($300,000)

Samoa will be hosting this Conference in March and is a great opportunity to promote Samoa’s support for this initiative given that this will be the first time this conference will be hosted in the Pacific;

Salaries for 3 New Judges for the Lands and Titles Courts ($112,455);

The Ministry for Justice intends to add to the number of existing judges which will contribute to the overall achievement of deliverables for the Lands and Titles Courts given their current workload;

Office of the Legislative Assembly - $210,000


Electricity Bill for the New Parliament House

The grand opening and use of the new Parliament House occurred while the Main Estimates was being finalized and at the time, an estimate on electricity usage was not available to justify insertion into the budget.  This estimate is now available following months of meetings and this estimate is now being proposed under the First Supplementary budget;

Ministry for Prisons and Corrections Services - $4,350,729:

Staff Quarters ($1,150,000)

The Prison at Tanumalala is now near completion and fully operations.  It is noted that a staff quarters is required to alleviate transportation costs to the staff as well as to minimize loss of staff due to the distance of the new prison.   It is intended that the staff quarters will ensure a fully staffed prison.

Additional Staff ($330,683)

15 new corrections officers are being requested under this First Supplementary Budget.  The Ministry for Prisons has reported that they still have insufficient number of staff to fully monitor the prison at Tanumalala particularly given the increase in the number of prisoners;

Perimeter and AntiClimb Fence ($1,300,000)

The provision is to complete the perimeter fence as well as the anticlimb fence for the Tanumalala Prison to minimize the number of escapees.

Miscellaneous Remaining Works for Tanumalala  ($1,351,446)

A list of remaining works has been submitted by the Ministry for Prisons to fully complete the development within the current financial year.  The provision includes completion of the road, water tank, standby generator and others.   It is anticipated that once completed, no other funding will be required in the new year 2020/21;

Assets for Town Cleaning ($34,500)

The town cleaning initiative continues under the juvenile program and a list of cleaning equipment has been submitted to assist the prisoners in their work; 


On Call Allowances ($138,600)

The allowance will ensure that the prison is fully staffed at any given time or shift in a 24hour day so that on-call corrections officers can be called in to replace anyone that does not show up.

Prison Doctor ($45,500)

One of the biggest issues faced by the Ministry is securing a prisoner to be transported to the hospital should he/she require medical attention.  Further, transportation of the prisoner will mean taking corrections officers away from their posts at the prions.  Having a prison doctor on call will address these issues;

Ministry for Customs and Revenue - $211,706:

Project Unit for the Tax Information Management System - TIMS ($86,706) 

This technology is intended to raise tax payer compliance through the use of technology to monitor taxation at the cashier and should minimize the occurrence of cash economics within the country.  The provision is the finance a Project Manager, a Project Officer and required office equipment; 

Smart Card Readers ($10,000)

The Smart Card readers is required for the quick and efficient transfer of data used by the TIMS;

Standby Generator ($115,000) 

It is imperative that the TIMS is not interrupted at any given time due to fluctuations in the electricity or due to prolonged electrical outtages;

Samoa Bureau of Statistics - $829,988:

Agriculture Census ($763,788)

The Agriculture Census is done in collaboration with the FAO and the current provision is the Government of Samoa’s contribution to this intiative.  The Agriculture Census is done every 10 years;

Household Income and Expenditure Survey ($66,200)

The requested provision is to supplement assistance from the SCP and will be used for the compilation, publication and launching of the survey;

Ministry for Health - $3,933,000:

Overtime ($3,600,000) 

The provision is to supplement existing resources for the overtime of staff.  The health services continue to be Government’s key priority sector and resources will consistently be diverted to ensure uninterrupted services to the nation 

Pharmaceutical Warehouse Division ($48,000)

A new division to oversee the Hospital’s Pharmaceutical Warehouse will be established under this First Supplementary Budget and the provision is to cover salaries and operating expenditures;

ACC Arrears - ($285,000)

The provision is to clear balances on arrears of the hospital to the ACC for monies owing from past financial years for staff as per provisions of the law and the Ministry has been duly advised to ensure this does not recur in the future 

Ministry of Finance - $10,743,251:

NUS Scholarships for Low Income Students -  ($250,000)

The Government continues to prioritize both Education and Health for the country.  The Government also continues with initiatives that heavily subsidizes the education of all children from ECE to College.  For Tertiary Education, the Government has agreed to set aside $250,000 for a scholarship program specific to NUS students as per prescribed conditions;

SSS Final Instalment for the Sale of the Forum Vessel - ($357,458)

This provision is to complete the agreement between the Government of Samoa and the SSS on the sale of the MV Forum Samoa II.   This arrangement began in 2016/17 however due to discrepancies in figures a provision was not made in the Main Estimates, this instalment will complete the arrangement.

Tax Information Management System - ($1,393,286)

As mentioned before this initiative is being implemented under the Ministry for Customs and Revenue.  A provision of $1million was allocated in the Main Estimates however the actual cost of the technology requires $2.393million therefore requiring the supplementary budget;

Disaster and Emergency Facility ($8,462,507)

This provision will be used to facilitate any and all expenses incurred in the national emergency operations towards eradication of the measles within the country.  It has been two months since the emergency operations had begun and a lot of resources have been required to source medical supplies, medical equipment as well as furnitures, fittings and many refurbishments to all hospitals; costs to personnel; hire and fueling of vehicles; awareness and promotion and other related works.  The Government is also committed in continuing its vaccination program and awareness programs on an annual basis and will continue to require resources;

Street Address Project - ($30,000)

The Street Address Project is an initiative of Government already underway currently being led by an oversight Committee that was selected in June 2019.  There is an intention that the project will begin within the Apia Urban Area in the beginning of 2020 and the provision is to facilitate any printing costs associated with the street naming and numbering;

Samoa Economic Recover Campaign - ($250,000)

At current the Samoa Tourism Authority continues to market Samoa as a destination that is still open to tourism.  It is imperative that these initiatives are pushed and continue rigorously over the course of the next few months to ensure that the Tourism Industry quickly recovers to stimulate the rest of the economy.   The Ministry of Finance will work in close collaboration with the Samoa Tourism Authority on a workplan to remarket Samoa and the provision of $250,000 is to finance this intiativie;

Ministry for Police - $158,073:

Police Academy

Efforts are now well underway in the development of the Police Academy at Tafaigata under the auspice of the People’s Republic of China and the provision is to satisfy some of Samoa’s obligations under the agreement for this development.  The finances required are mainly for personnel which include a project manager, a maintenance officer and a security guard;

Ministry for Public Entreprises - $38,696:

Relocation of Office

There are plans in place to relocate the Ministry for Public Entreprises from the top floor of the Central Bank Building to the NPF Plaza in the beginning of 2020.  The relocation will satisfy need for additional space of both the Ministry for Public Entreprises and the Ministry of Finance to ensure better and more efficient service provision to the public;

Samoa Tourism Authority - $253,000:

Agro Tourism Park – Atele

One of the current challenges in Tourism for the country is the development of new tourist attraction scenic areas.  The new development at Atele, is a long term plan of the Government to showcase its local fauna and flora both medicinal and for consumption and will be an opportunity to promote our own local produce;

Land Transport Authority - $2,300,000:

Taufusi – Vaea Street Rehabilitation

This area is one of the most affected areas by flooding during Samoa’s rainy seasons.  The provisions is meant to improve drainages and footpaths for the area to raise road safety during the rainy and cyclone season.  It is also the opportunity to raise the resilience of this particular stretch of road in the face of the effects of Climate Change;

United Nations’ organisations’ combined assistance for the Community Sector Measles Outbreak Response Programme ($518,813):

WHO – ($300,000)

UNDP -  ($106,213)

UN RCCO -  ($52,600)

UNFPA - ($60,000)


Conclusion

Mr. Speaker and Honourable Members, 

The Supplementary Budget before the House is a product of careful consideration to ensure macroeconomic stability is maintained at the same time Government is in a position to deliver the services demanded by the public. Government will continue to ensure quality spending and prudent allocation of resources so we can deliver on an improved quality of life for everyone.

Mr. Speaker, Honourable Members,

On behalf of the Government, I take the opportunity to wish you and Honourable members and every citizen of Samoa a Joyful Christmas and a Productive 2020. 

 

 

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