Debt relief drives $42 million supplementary budget
A supplementary budget, the first for the 2020-2021 Financial Year, was tabled in Parliament on Tuesday, the centrepiece of which was more than $24 million in debt relief and redirected Government spending.
In introducing the $42 million package, the Minister of Finance, Sili Epa Tuioti said the budget had been crafted in the shadow of the economically disastrous global COVID-19 pandemic.
“The economies of the world [have] experienced the effects of global lockdowns; the loss of millions of jobs; industry closures; shortages in goods and services; as well as recessions in many of the developed nations of the world,” he said.
Sili said the main budget estimates for the current fiscal year were progressing towards their yearly targets
But he said the supplementary budget aimed to inject money into the Samoan economy to counter the effects of economic downturn.
“The additional requests presented within the supplementary budget before you however have been compiled to ensure the continued injection of resources into the economy,” Sili said.
“These efforts are not dissimilar to those being actioned by many economies of the world as Governments intervene to ensure sustained growth in light of the effects of the COVID-19 pandemic.”
One key piece of financial relief unveiled on Tuesday will be for the Government itself.
The country has qualified for relief on repayments of its debts after securing 12 month delays in its debt servicing obligations to China (worth nearly $22 million) and Japan ($2.5 million).
Sili said the Government had three major priorities to steer the nation’s economy through the downturn.
They were to ensure its existing stimulus measures reached people and businesses in need; to secure budget support from development partners, and to ensure planned large infrastructure projects continue.
Among the projects the Minister said the Government had successfully negotiated with the World Bank and Asian Development Bank to continue included the expansion of Cross-Island Road; the West Coast Road project and the Alaoa Multipurpose Dam.
Tuesday’s budget was composed of nearly $5 million in additional receipts (mostly $4.5 million in dividends collected by the Ministry of Public Enterprises) and $6.2 million in new grants.
But the Government also unveiled a reshuffling of more than $30 million worth of spending projects.
The principles guiding the changed spending, Sili said, included building the nation’s resilience to pandemics, improving access to education, and improving infrastructure.
Several Ministries reported cost savings and spending redirections as part of the broader reshuffle.
These included transferring $1.5 million from the Ministry of Agriculture and Fisheries’ Crops Research Unit to the Scientific Research Organisation of Samoa (S.R.O.S.).
The Ministry of the Prime Minister and Cabinet, meanwhile, reported savings in excess of $400,000 from diverted travel costs and a staffing restructure.
The Ministry of Finance also reported more than $500,000 in savings owing to changes in the management of infrastructure projects and averted travel costs.
“Ensuring that prudence is maintained in this regard will allow the Government sufficient fiscal space to continuously reshuffle its priorities in the future should any other disaster affect our nation requiring swift resourcing of immediate needs for the people of Samoa,” Sili said.
Despite a recent report showing the nation had been struck by a more than 16 per cent plunge in its economic output - the highest quarterly drop since records began - Sili concluded that the Government was optimistic about the future of the economy.
“We have received good news that scientists have been successful in trialing vaccines for the COVID-19 [pandemic] and it is without a doubt that soon this will reach our region and we can begin to work towards returning to pre-pandemic conditions,” he said.