Government presents $965 million budget

The Government says its financial position remains strong and its revenue generation is sustainable after it passed the first reading of a proposed $965 million budget for the new Financial Year. 

Speaking before Parliament on Tuesday, the Minister of Finance, Sili Epa Tuioti, said that the budget for the forthcoming Financial Year was built around a theme: “weaving a prosperous and secure future of Samoa together”.

Despite the upbeat title, the Government’s total budget for the new financial year 2020-2021 Financial Year amounted to $838 million in revenue and $965 million in expenditures, which has resulted in a widening national deficit of $116 million after “soft term borrowing” is accounted for.

When recalculated under a new Government Finance Statistics format (a formula that adds revenue collected by state-owned enterprises to central revenues and offsets expenditure that increases Government asset holdings) this figure is reduced to $82.4 million. That amounts to 2.3 per cent of Gross Domestic Product, or less than the Government’s 3.5 per cent target.

The Government is forecasting a five per cent or more than $40 million drop in total revenues in the new fiscal year attributed primarily to the expectation for a decline in taxation as a result of trade interruptions caused by COVID19.

Also included in the budget was what the Government styled as "Phase II" of its economic relief package for the private sector. Totalling $83 million in spending initiatives, among the measures designed to help offset the economic downturn were increased subsidies for the unemployed, direct $3600 grants to villages, one-off payments of $100 to senior citizens and $50 to all citizens who register for a national identification card and a sustained $15 monthly increased to the aged pension. 

A National Provident Fund dividend payout to all shareholders totalling $35 million and further subsidies to water and electricity utilities are also part of the package.

“Mr. Speaker, the fiscal expansion presented herewith should not be cause for concern.  In that regard, I refer to Government finances appropriated for key development programmes and in particular those that are crucial to the country’s economic development,” Sili said.  

"There have been concerns circulating within the country around the possibility that the Government is bankrupt and no longer able to pay its debts.  

“At current, the Government’s financial position remains sound and the appropriation of its revenues remains sufficient to sustain its operations.” 

He said a total of $89 million was included under the total $137 million in statutory payments allocated for servicing public sector debt. The figure is taken from the overall Government revenue stores of $838 million. 

“This means that after paying our debt servicing, a total of $749.2 million is left to be appropriated towards remunerations for public servants, payment of operations as well as other development programmes of the Government,” the Minister said. 

“In terms of percentage, only 11 per cent of Government revenues go towards our debt servicing while 89 per cent remains for other operations of Government and its key developments.  

“Despite current circumstances, the Government remains confident that we can work together to ensure strong economic growth for a better future for all.”

The Minister of Finance said the overall Total Revenues of Government are forecast to drop 5 per cent or $42.7 million in the new fiscal year. The decline is attributed primarily to the expectation of falling taxation revenue as a result of trade interruptions due to the COVID19.

“Total Ordinary Receipts are expected to decline 10 per cent [which is] attributed to the aforementioned decline in Taxation Revenues which will fall by 12 per cent while Non-Tax Revenues will increase by 12 per cent to reflect the inclusion of fees and charges of the Land Transport Authority now transferred to the Ministry of Police," he said. 

“Total Grants are expected to increase 9 per cent to reflect the increased assistance from our development partners in response to the effects of the COVID19.”

He said total Government expenditures for the upcoming fiscal year of $965.8 million included development project payments and will be 1.5 per cent lower than this Financial Year.

“The decline anticipated for total expenditures in the new fiscal year is attributed largely to the reduction in development programmes provisions reflecting the completion of many of the Government’s developments within the current fiscal year 2019-2020,” the Minister said. 

“In addition, many of the pipeline projects planned with our development partners have been restructured and reprioritised so that priority is given to COVID19 response and assistance.”

The Minister noted COVID19 was producing a slowdown in Samoa’s broader economy as well as the international economy. 

“Tourism development itself, one of the biggest contributors to the country’s economy, has been affected the most and despite aspirations to try and respond to the cry from the industry for large compensation, the Government’s response is limited,” Sili said. 

A full breakdown of the appropriations allocated to Ministries for the new Financial Year is as follows

Ministry of Agriculture and Fisheries - $15.5 million tala;
$11.9 million tala for the Ministry’s normal operations;
$3.49 million for Transactions on Behalf of the State;
Major initiatives planned by the Ministry for the new fiscal year includes:
$500,000 for the annual Agriculture Show;
$500,000 for the Rhinoceros Beetle elimination program;
$300,000 for the Women in Business Development Inc (WIBDI);
$200,000 for the WCPFC Scientific Committee Meeting;
$150,000 for the ICC Ministerial Meeting.
The Ministry is also working in close collaboration with our development partners on various projects of which the largest is:
$12.2 million tala for the Samoa Agriculture and Fisheries Productivity and Marketing Project (SAFPROM) under the auspices of the World Bank and the IFAD;
Ministry of Commerce, Industry and Labour - $7.5million tala;
$5.2million for the Ministry’s normal operations;
$2.3million for Transactions on Behalf of the State.
Large initiatives planned by the Ministry include:
$200,000 usual Government assistance to the private sector;
$178,000 to continue the Government’s annual Apprenticeship Scheme intake;

Ministry of Communications and Information Technology - $5.7 million tala;
$2.6million for the Ministry’s operations;
$3.1million for Transactions on Behalf of State.
Significant expenditure programs of the Ministry for the new fiscal year includes:
$1.7 million for the co-location lease as well as associated utility costs for the SNBH infrastructures;
The Ministry is also working in close collaboration with our development partners in the implementation of key projects for the sector of which the largest is:
$6.4 million for the Samoa Connectivity Project under the auspices of the World Bank and the Government of Australia;

Ministry of Education, Sports and Culture - $103.4million tala
$72.6 million tala for the Ministry’s planned operations;
$30.7 million for Transactions on Behalf of State.
The planned initiatives of the Ministry include the following major developments;
$18 million for the One Government Grant to schools;
$6.5 million for the Education Sector Support Program under the auspices of the New Zealand and Australian Government;
$1.5 million for Teachers’ Scholarship program;
$350,000 for the Samoa Rugby Union;
$200,000 for Sports Development;
$150,000 for the Samoa Netball Association;
The Ministry is also working in collaboration with its major development partners in the implementation of key projects of which the largest are:
$2 million for Inclusive Education;
$1.2 million for the Nursing Workforce Development Program;

Ministry of Finance - $133.3 million tala;
$16.5 million for the Ministry’s planned operations;
$116.8 million for Transactions on Behalf of State;
Some of the larger initiatives being led by the Ministry of Finance include:
$32 million for the Phase II of the Government’s COVID19 Response Plan;
$27.1 million for the usual annual Senior Citizens’ Pension;
$13.5 million allocated to cover VAGST and duties for development project-related expenditures including imports;
$5 million to cover land compensation associated with the planned Cross Island Road development;
$5 million to be paid to the Samoa Airways as compensation for Government’s takeover of the Fagalii Airport properties;
$4.7 million for Government assets insurance;
$1.5 million Government counterpart for the West Coast Road development;
$1 million tala for the rehabilitation of the Government’s Vaimea Warehouse;
$1 million tala for the relocation of the Government bowser to Tuanaimato;
$126.3million has been committed by our development partners in terms of direct budget support not only to help fill the fiscal gap due to the effects of the COVID19 but also to finance the Government’s assistance to the country.

Ministry of Foreign Affairs and Trade - $26.7million tala;
$19.1 million tala for the Ministry’s operations;
$7.6 million tala for Transactions on Behalf of the State.
Large planned initiatives of the Ministry include:
$473,440 for the relocation of the embassy in Japan into Tokyo;
$200,000 for the Summit on the Signing of the EU-ACP Samoa Agreement (Post Cotonou);
$150,000 Pacific Labour Mobility Annual Meeting;
$100,000 Meeting of the Pacific ACP-EU EPA Trade Committee;
$100,000 Preparations for the CHOGM 2022;

Ministry of Health - $120.6 million tala;
$76.3 million to support the usual operations of the Ministry;
$44.3 million for Transactions on Behalf of the State.
Some of the larger provisions for the Ministry include:
$8 million allocated for the Government’s Overseas Medical Treatment Scheme;
$5.7 million tala for the NCD’s Program for Results under the auspices of the World Bank;
$3 million tala for the reconstruction and refurbishment of district clinics and staff quarters.
Larger development projects implemented by the Ministry in collaboration with development partners include:
$2.5 million under the World Bank particular to COVID19 response;
$1.8 million for a Digital Radiography System General X-Ray Machine through the Government of Australia;
$1.5 million for the Samoa Nursing Community Training Centre under the auspices of the Government of New Zealand.

Ministry for Justice and Courts Administration - $13.8 million tala;
$12 million allocated to support normal operations of the Ministry;
$1.8 million for Transactions on Behalf of the State;
Larger initiatives planned by the Ministry include:
$500,000 for preparatory works required for the new Ministry headquarters in Salelologa;
$200,000 for the re-roofing of the Ministry’s building at Mulinu’u.

Ministry of Natural Resources and Environment - $26.8 million tala;
$13.2 million for the Ministry’s planned operations;
$13.6 million for Transactions on Behalf of the State;
Larger initiatives of the Ministry as part of its annual operations include:
$4 million for compensation of land to be taken for Government developments and reserves;
$3.9 million for waste management contract services;
$500,000 for water resource land compensation;
$500,000 for Roads for Land Board leased Lands.
The Ministry is also leading the implementation of key development projects of which the larger ones are:
$11.2 million for the Enhancing Climate Resilience of Coastal Resources and Communities programme;
$3.5 million for the Economy-wide integration of Climate Change Adaptation and Disaster Risk Management programme;
$2million tala for the Pacific Resilience Programme;

Ministry of Police - $26.4 million tala;
$24.4 million to support the normal operations of the Ministry;
$2 million for Transactions on Behalf of the State.

Ministry of the Prime Minister and Cabinet - $8.4million tala;
$6 million for the Ministry’s planned operations for the year;
$2.4 million for Transactions of Behalf of the State.
Ministry for Customs and Revenues - $13.2 million tala;
$10.6 million to support the Ministry’s normal operations;
$2.6 million for Transactions on Behalf of the State;
The largest expenditure initiative of the Ministry planned for the new fiscal year is:
$676,750 as final payment for the Taxation Information Management System;
Ministry for Women, Community and Social Development - $10.8 million tala;
$9 million for the planned operations of the Ministry;
$1.8 million for Transactions on Behalf of the State;
The largest provision for the Ministry is the $1million for the Ie Samoa Annual Showcase.

Ministry for Works, Transport and Infrastructure - $25.2million tala;
$4.9 million for the Ministry’s operations;
$4 million for the EPC’s Community Service Obligations;
$4 million for the SWA’s Community Service Obligations;
$11.2 million for planned investment projects of the SWA;
$1.1 million for Transactions on Behalf of the State;
Other than their usual planned infrastructural works, the Ministry will also lead the implementation of some of Government’s larger development projects in the new fiscal year 2020/21 which include:
$13.6 million for the Samoa Climate Resilient Transport Project under the auspices of the World Bank;
$1 million for remaining works associated with the Apia Waterfront Development through the assistance of the New Zealand Government;

Office of the Attorney General - $5.3 million tala;
$4.6 million for the operations of the Ministry;
$725,702 for Transactions on Behalf of the State;

Office of the Auditor-General - $3.9 million tala;
$3.4 million for the Office’s normal operations;
$568,037 for Transactions on Behalf of the State;

Office of the Electoral Commissioner - $8.3 million tala;
$2.2 million for the normal operations of the Ministry;
$6.1 million for Transactions on Behalf of the State;
Large planned initiatives of the Ministry include:
$2.6 million allocated for the construction of the new office building for the Ministry planned for Mulinuu;
$2.2 million allocated for the administration of the general elections in April 2021. These provisions include monies allocated for additional personnel required for the elections as well as allocations for hire of facilities in the communities as well as payment for catering provided by villages to support polling booths and officials.

Office of the Legislative Assembly - $6.9 million tala;
$5.7 million for the normal operations of the Ministry;
$1.2 million for Transactions of Behalf of the State.

Office of the Ombudsman - $1.6 million tala;
$1.4 million for the planned operations of the Office;
$195,399 for Transactions on Behalf of the State.

Public Service Commission - $5.1 million tala;
$4.3 million to support the operations of the Ministry;
$891,248 Transactions on Behalf of the State.
In line with the functional restructuring as directed by Cabinet, included under the provisions for the PSC is $27.6 million in total assistance from the Governments of Japan, Australia and New Zealand for scholarships.

Fire and Emergency Services Authority - $8.8 million tala;
$8.5 million to support the normal operations of the Authority;
$375,195 for Transactions on Behalf of the State;

Samoa National Kidney Foundation - $8.3million tala;
$4.99 million tala to support the normal operations of the Foundation;
$3.3 million for Transactions on Behalf of the State;

Public Trust Office - $2.9 million tala;
$1.2 million to support the Office’s normal operations;
$1.7 million for Transactions on Behalf of the State;

Samoa Qualifications Authority – $4.4 million tala;
$2.9 million to support the planned operations of the Authority;
$1.5 million for Transactions on Behalf of the State;

Samoa Tourism Authority - $12.7 million tala;
$10.5 million for the planned operations of the Authority;
$2.2 million for Transactions on Behalf of the State.
The STA will also lead the implementation of key development programmes of which the largest is the $1.7million allocated under the assistance of the Government of New Zealand for the Tourism Growth Development Project.

Office of the Regulator - $2.01 million tala;
$1.9 million to support the operations of the office;
$94,167 for Transactions on Behalf of the State.

Scientific Research Organisation of Samoa - $4.3 million tala;
$4.2 million for the normal operations of the organisation;
$224,571 for Transactions on Behalf of the State.

National University of Samoa - $24.7 million tala;
$22.1 million to support the services of the University;
$2.6 million for Transactions on Behalf of the State.

Samoa Sports Facility Authority - $2.2 million tala;
$2.1 million to support the operations of the authority;
$98,42 for Transactions on Behalf of the State;

Ministry for Public Entreprises - $2.9 million tala;
$2.3 million for the Ministry’s operations;
$581,833 for Transactions on Behalf of the State;

Samoa Bureau of Statistics - $5.7 million tala;
$3.8 million to support the planned operations of the Ministry;
$1.8 million for Transactions on Behalf of the State;
Large planned expenditures for the Bureau include:
$441,835 for preparations for the Population Census;
$527,625 to continue the suspended Agriculture Census;
$115,000 to complete the Demographic Health Study

Land Transport Authority - $45.8 million tala;
$40.5 million to support all the planned activities and operations of the Authority;
$5.3 million for Transactions on Behalf of the State.
The Land Transport Authority is also leading the implementation of many development projects the largest of which include:
$7.2 million for the West Coast Road Project;
$14.5 million in total for the Samoa Enhanced Roads project under the auspices of the World Bank and the Government of Australia;

Law Reform Commission - $1.4 million tala;
$1.2 million to support the planned operations of the office;
$255,519 for Transactions on Behalf of the State;

Ministry for Prisons - $8.1 million tala;
$6.6 to support the operations of the Ministry;
$1.5 million for Transactions on Behalf of the State.