Govt. asked for help, stimulus package in the works
Stimulus package preparations to combat the coronavirus-led economic downturn are currently underway and may be finalised soon, the Government says.
The Chief Executive Officer of the Ministry of Finance (M.O.F.), Leasiosiofa’asisina Oscar Malielegaoi, told the Samoa Observer the Government received a request for assistance from the Chamber of Commerce a couple of days ago.
“They were prioritising their businesses and preparing ways to ensure they are able to retain staff and as I understand that was their first priority, looking at ways to assist their staff,” he said.
The request follows the country’s largest performing industry, tourism, having been left reeling from the dual blows of measles outbreak and the coronavirus pandemic.
Local restaurants have also reported struggling to survive amidst the state of emergency measures imposed by the Government restricting customers to takeaway food.
“As some hotels have reduced hours and some [are] already laying off staff and those were the ones [the] Chamber were prioritising, while at the same time making preparations and putting together their request, which has now been given to Government,” he said.
Leasiosio said recent media reports into the struggles of small businesses in Samoa have not fallen on deaf ears.
The M.O.F. told the Samoa Observer that the Government had already been working to put together an assistance package for the economy even while receiving the request from the Chamber.
He did not give an estimate on how much the Government is planning on releasing to save jobs and assist businesses.
An analysis by the A.N.Z. Bank found that a tourism slowdown will devastate Pacific economies including Samoa, which will face an 18 per cent downturn, and a forecast suggesting that Samoa will lose 19 per cent of total jobs in the next year.
But the report also said that with decisive, targeted and a right-sized fiscal stimulus package, policy makers could cushion the economic blows of the pandemic.
“Governments are likely to need a fiscal stimulus of at least 10 percent of G.D.P., although the Cook Islands will need something closer to 50 percent,” the A.N.Z. Pacific Insight report, prepared for the bank’s private clients, reads.
The Finance chief was queried if the stimulus package is in any way aligned with the bank’s modelling but Leasiosio said Samoa’s stimulus package would be based on its own local assessments.
“Our assessment is done within the country, with deep appreciation of what is currently happening in Samoa and this assessment is done for our own assistance package,” said Leasiosio.
However he did note that the rescue package being prepared will not only assist businesses but also communities, families and individuals.
“The amount cannot be released but the assistance being prepared has a community wide scope,” he said.
“It is not just for one sector and it is not just for businesses also, we are looking at how we can also assist the community because some are now unemployed, others depended on exports which is now not reliable and others were in the hospitality industry.
“What we are looking at is to make sure the Government assistance does not look to one side only and to ensure that there are enough resources to implement the assistance. We cannot have an assistance package with many wants with nothing to put it into action.”
As the coronavirus pummels the global and local economy, Governments around the world have resorted to massive spending programmes to keep their economy afloat.
Last week, Fiji's government unveiled a $US400 million response Budget to address the coronavirus threat which is aimed to bring relief to Fijian families with more than half the funds allocated to workers and businesses.