Ministries encouraged to undergo regular fee reviews
Government bodies must regularly review their fees to avoid sudden price spikes and evenly redistribute consumers’ fee burdens, the nation’s Finance Ministry Chief has warned.
Leasiosiofa'asisina Oscar Malielegaoi, the Chief Executive Officer (C.E.O.) of Ministry of Finance (M.O.F.) confirmed in an interview with the Samoa Observer that Ministries and State Owned Enterprises (S.O.E.s) had been encouraged to review their fees.
While formulating the 2020/2021 budget, a target of a six per cent increase in revenue sources for all Ministries was set during a pre-budget C.E.O. Forum for heads of all Government Ministries.
“One of the things we are trying to bring in is that there are some Ministries and S.O.Es with fees from some 30 years ago, and these are the kind of fees they need to review,” he said.
“So the six per cent that we are trying to achieve as a revenue target is for them to go back and review all fees and charges because most likely most fees have not been reviewed and most are overdue.”
Leasiosio noted that if fees are not reviewed with sufficient regularity, the subsequent spike in price when they are can seem shocking to consumers.
“The ideal scenario is that when it is meant to be increased, and then we raise it on a small percentage and gradually, but not spike overnight [because then] the people feel the impact,” he said.
“Another thing about not revising fees because it means that there are a few people carrying the weight of the service cost.”
He took as an example the Ministry of Health: some years back it only cost $2 to see the dentist, he said, but a subsequent study revealed that the service costs at least $80 tala.
“It costs the labour, maybe two hours put into the dentist service, the machinery used, the electricity cost, aircon and yet only $2 is paid,” Leasiosio elaborated.
“This does not mean it is free, it just means the other $78 tala is carried by others in the community. So it’s an equitable formula to ensure the costs are shared.”
Leasiosio said the usual $10 tala fees at the hospital are still very low but it is because they are reviewed and increased from time to time to avoid sudden spikes as it is social services which are very important.
“Yes we increase but we increase accordingly,” he said.
“Just like education, most are for free as $14 million is allocated for the purpose, and that money did not come for free, it is funded for by the Government from our pocket.”
In 2016, a Fees and Charges Bill 2016 was proposed in Parliament seeking to amend various Acts of Parliament in relation to fees and charges.
The bill aims to ensure all fees and charges for services rendered by Government ministries; Government agencies; public beneficial and selected public bodies are to abide by Regulations made by the Head of State, subject to the approval of the National Revenue Board and the Public Finance Management Act 2001.