Proposed S.N.P.F. stimulus package right move
It has been a week since the Government declared a state of emergency (S.O.E.) last Friday to address the threat posed by the coronavirus (COVID-19).
Daily life in Samoa has grind to a halt with the S.O.E. orders resulting in the closure of schools, a ban on public gatherings, prohibition of public buses and vans, limited Government services, and restricted trading hours for shops and markets.
In an update on the monitoring of Samoa’s international borders for the virus, Ministry of Health (M.O.H.) Director General, Leausa Dr. Take Naseri revealed in a video posted on the Government’s Facebook page on Wednesday night that the country has had 22 suspected cases.
However, the tests of all the suspected cases came back negative except for four samples, which were sent to New Zealand on Tuesday for tests, though two other samples missed the flight and are now stored in a local laboratory.
The cutting back on the working hours of Government as the main service provider in Samoa, and the curtailing of private companies’ trading hours will gradually impact on the average Samoan family, who rely on the wages of their mothers or fathers or sons and daughters to put food on the table and meet other essential cost.
Early in the week the President of the Samoa Hotel Association, Tupa’i Salemoa Va’ai, revealed some hotels had placed up to 80 per cent of their staff on redundancy with others considering foreclosure.
“There is more to come with no guests,” he says. “Again our support is behind the Government and this is to ensure that the whole country is protected (from coronavirus), however, the impact for the industry is undeniably huge on businesses.”
Therefore, the revelation of a proposed $8.4 million tala stimulus package by the Samoa National Provident Fund (S.N.P.F.) could not have come at a better time.
We like the proposal’s areas of focus: one-month refund of member loan repayments; six-month moratorium on contribution payments by employers in the hospitality sector; and one-month free rent for businesses leasing S.N.P.F.-owned properties.
Though questions remain on whether the borrowers are expected to pay back the one-month refund and if the amount paid back will be done with interest?
The S.N.P.F. Chief Executive Officer, Pauli Prince Suhren, says the measures highlighted in the proposal are yet to be sanctioned by the Cabinet.
“That confidential correspondence was not meant for public circulation,” he said. “Once this package is finalised and endorsed by Cabinet, the details will be made public.”
We commend the S.N.P.F. management for being proactive at these times of uncertainty and recognising the need to support not only its members, but local businesses who are clients and are leasing its various properties.
There is no doubt the proposed stimulus package – if approved by the Cabinet – will have a ripple effect and come as a relief for S.N.P.F. members as well as employees of firms who lease their properties.
And while we acknowledge the proposed intervention by the S.N.P.F. management, we note the reference in the letter penned by Pauli to a more comprehensive finance sector stimulus package being considered by the Government.
The letter dated March 24, 2020 from the S.N.P.F. Chief Executive Officer was addressed to the Ministry of Finance C.E.O., Leasiosiofaasisina Oscar Malielegaoi, who is also the Chairman of the S.N.P.F. Board.
We have, in the lead-up to the declaration of the S.O.E. last Friday, called on the Samoa Government to include a stimulus package to assist the private sector as part of its 2020 budgetary appropriations.
And it is good to see behind-the-scenes discussions within the corridors of power head in that direction.
But are there any benefits for the rest of the private sector who will feel the impact the most? After all, the private sector is the backbone of the economy paying full hours, while Government workers’ working hours as part of their revised working conditions during the S.O.E. are reduced from 9am to 3pm with full pay.
Last week the World Bank and its sister organisation International Finance Corporation (I.F.C.) announced a US$14 billion assistance package to support the economies of its members and save jobs amidst the global downturn triggered by COVID-19.
Prior to the announcement by the World Bank and the IFC, the Manila-based Asian Development Bank (A.D.B.) alerted its members including Samoa to a US$6.5 billion package for vulnerable populations and economies in response to the coronavirus pandemic.
The offers by these multilateral financial institutions at this critical juncture should be explored, especially technical assistance and grants, which would come at no cost to the country’s debt servicing expenditure and could ultimately benefit Samoa's private sector.
And while there are opportunities abound through these COVID-19 financial assistance packages, the need for the Government to rein in public spending and keep costs to a minimum is essential to lay the foundations for a gradual economic recovery in the aftermath of the global pandemic.
Stay safe Samoa and remember to wash your hands while maintaining appropriate social distancing.