Finance Minister rubbishes "broke" claims
The Minister of Finance, Sili Epa Tuioti, has rubbished claims that the Government's ability to borrow from international banks and donors has been restricted due to its financial position. He has also dismissed claims that the Government is broke.
"Mr Speaker, the claims that the government is broke, I can say that with all due respect, these allegations are unfounded," the Minister said.
Speaking in Parliament during the budget debate, the Minister said the Government is taking a conservative approach towards borrowing, given the uncertain situation with the global economy and the coronavirus pandemic.
“I do not accept remarks by some Members of Parliament that we can no longer request for loans or financial assistance [from our overseas partners],” Sili said.
The Minister was responding to concerns raised by Members of Parliament, including Gagaifomauga No. 3 M.P., Laaulialemalietoa Leuatea Polataivao. They questioned why the Government is not moving to borrow more money to help the country deal with the impact of the coronavirus.
“The truth is, the government remains alert about the economic impact of the coronavirus," Sili responded. "If the virus prolongs around the world, the government will consider fiscal space and request for loans as a last resort. But for the time being, we don’t need another loan.
"In saying that, the government continues to collect taxes and we are mindful of our budget spending. This is aside from the $11.4 million loan that is being carried forward from previous years for two projects."
The Minister also addressed concerns about the budget deficit.
“I want to make it clear this deficit is only a projection but the future is uncertain," he said. "We must also factor in the crisis we are facing, the coronavirus and the measles. No one knew we would face these predicaments."
Looking back to his tenure as Finance Minister during the past five years, Sili said the projected deficits in the budget is always overestimated.
“When we compare the actuals to the budgeted deficits, in 2015-2016, the deficit projected was 4.7 percent however at the conclusion of that financial year, the actual deficit amounted to 4 percent.
“For F.Y. 2016-2017, a total of 3.5 % deficit was projected but at the end of that financial year, only 1.1% was the deficit.
“The following financial year deficit was 3.5 % but 2.0 was the actual deficit. However for 2018-2019, the deficit projected was 3.5%, but for the first time in five years there was surplus of 2.7 percent."
He reminded that budgets are estimates.
The Minister pointed also pointed to the public accounts for 2018-2019 which shows that the value of the Government’s total assets is $2.13 billion, compared to its liabilities worth $1.15 billion.
“This means the government assets and government savings can pay for our loans anytime," Sili said.
"No financial institution overseas is willing to offer assistance to a government that is bankrupt.The truth is we are a responsible government. We follow compliance policies outlined for each development project funded by our overseas partners for our developments such as the roads, airport, school buildings, airport and the hospital."
The Minister noted the initiative led by the Ministry of Finance called Samoa 2040.
There are seven pillars of this project, farming developments, tourism, I.C.T. development, labor mobility, resilient development, human capital development and the safety of the people.
“Our overseas partners continue to assist our country and as indicated earlier, they have increased the budget support as a result of our compliance and also our overseas partners consider what our government is prioritising.”
He said our revenues has reduced 10 percent due to the coronavirus, however the Government is optimistic the new financial year the government’s revenue will increase due to the Tax Information Management System.
The $3 million tala T.I.M.S. is a web-based monitoring tool — which would enable real time capture and monitoring of sales and notification of the Revenue Office on how much tax should be collected — from each a business.
The government will also set up the scanner at the wharf soon, said Sili. He also pointed to the development projects in the country which afford the opportunity to increase employment.
“Samoa is COVID-19 free and so this means there is a good chance our economy can turn around quickly by the time a vaccination is found.”