Second stimulus falls short: Luagalau Afualo Dr. Salele

The Government’s “phase two” $80 million stimulus packages includes too many measures that will have little effect on the national economy, an economist and opposition politician says.  

Economist and opposition party member, Luagalau Afualo Dr. Salele, says the Government’s stimulus package is composed of too few measures which involve direct cash injections into the private sector making its likely effect inadequate. 

“The Government should not include our contribution to the Samoa National Provident Fund into the stimulus package, this is our money, not Government monies,” said Luagalau who is the Team Leader for the Tautua Samoa Party opposition party. 

“We are not seeing commitment from the Government to assist with the growth of the economy, they but they should be forthcoming with the way they manage the economy and allow the economy to be stimulated.”

According to Luagalau, the Government should consider the urgent release of further funds given the drastic impact the coronavirus-led economic downturn has already had on national unemployment.

But instead he said Tuesday’s stimulus package was padded out with initiatives that did not come directly from Government coffers and were not truly designed to stimulate the economy.   

The Minister of Finance, Sili Epa Tuioti said the new fiscal year will be kicked off with the release of the Phase II of the Government’s assistance package to the private sector including S.N.P.F. dividend payouts for all contributors to the total value of $35 million tala in July, 2020.

Luagalau said these are contributions by members of the public and shouldn’t be listed as part of the Government’s stimulus package. 

The monthly pension for the country’s senior citizens will also be increased by $15 from $145 a month to $160 starting in July. Luagalau said that is not enough. 

“They should receive $300 per month; $145 can only pay for so much, but they need steady revenue from the Government. The proposed pension will assist the elders to make investments and also they can be well cared for with that amount of money, in terms of nourishment meals,” Luagalau said. 

He said most senior citizens have to buy food on credit until they receive their monthly pensions. 

“As soon as they receive their pensions, it goes directly to the store to pay for the credit,” Luagalau said. 

“And some families rely solely on the Senior citizens’ pensions to buy food which is a mentality that has to be phased out because that is not the purpose these funds are given to the elderly population.” 

Luagalau was referring to financial assistance targeted at raising the roles of committees within the villages to take charge of ensuring improved sanitation practices and healthy living as well as education at the grassroots. 

Finance Minister Sili Epa Tuioti announced the Government would distribute $3,600 per village committee as verified by the Ministry for Women into bank accounts to assist with activities.

Luagalau further said a reduction of 10 sene in the rate of water and electricity should be doubled. 

“This 10 sene reduction per unit is ridiculous! The majority of the families have lost jobs and yet the reduction in rates is minimal. The Government needs to reconsider this and increase it 20 sene, which is more affordable given the situation we are in,” he said. 

Luagalau also took issue with a policy reducing the daily fixed electricity rates offered to hotels by 50 per cent. 

“The Government knows very well there are no guests staying at hotels. There is no point in reducing the rate,” he said. 

“The Government should waive the electricity rates for the hotels. 

“Whatever the hotels are making from the locals should go to paying for their staff, not electricity bills.”

He further argued there should be a relief package for the private sector, not just tourism businesses. 

“It appears the Government wants to look good by saying they are reducing the hotels’ electricity rates [by] 50 per cent, yet there are no guests. The Government should also consider waiving rates for water and electricity for other businesses,” he said.  

He commended the move to provide assistance for the social welfare of N.G.O.s who currently caring for vulnerable citizens including Mapuifagalele - Home for the Elderly; Samoa Victim Support Group; Goshen Trust; Faataua le Ola; Nuanua o le Alofa; Loto Taumafai; Senese and Divine Mercy Moamoa and others. 

A summary of the Government’s stimulus measures, taken verbatim from the Finance Minister’s speech to Parliament, are included below:

1. NPF Dividend payout

The National Provident fund will be implementing a dividend payout for all its contributors to the total value of $35million tala in July;

 2. Additional One-Off Pension ($100 tala per pensioner in July) 

A one-off $100 top-up will be added to the July pension.  In addition, the monthly pension will also be raised from $145 to $160 beginning July.

3. $50 per citizen during the 2020 Census and National ID Registration Roll Out

The Government intends to merge the 2020 Census with the registration for the National ID project and each citizen to come in for registration will be given $50 tala;

4. Agriculture Stimulus

This programme will be done in collaboration between the Ministry of Agriculture and its key stakeholders to revitalize the coconut, cocoa, taro and vegetable industry which will make use of those who have been made unemployed by the COVID19 to ensure food security within the country.

5. Unemployment Subsidy

The Ministry of Finance will work in collaboration with the Samoa Chamber of Commerce to distribute monetary compensation for all workers who have been laid off, been put on leave without pay or have had their working hours reduced due to the COVID19.

6. 3 month extension on free rent for all vendors at Samoa Land Corporation and Accident Compensation Corporation Markets

Vendors who are operating in the markets owned by the Samoa Land Corporation and the Accident Compensation Corporation will have their free rent periods extended by another 3months to the end of August.

7. Short Term Paid Training for the Hospitality Sector

The Government will work in close collaboration through the Samoa Tourism Authority with the Australian Pacific Training Coalition (APTC) to provide a 4 week training program on soft and minor skills for the service sector targeting workers in the hospitality sector who have been laid off due to the COVID19.  To compensate for travel, food and other expenses each participant will be paid $100 per week of attendance.

8. Assistance to Talofa Airways;

Government’s assistance to Talofa Airways will be in the way of debt forgiveness relating to 3months of operations at Fagalii Airport since December 2019.

9. Partial insurance compensation for Samoa Primary Exporters

Government will compensate 5% of the value of primary agricultural exports and 1% of value of fishing exports lost between the month of February and May 2020. The compensation will be based on invoices provided by each exporter.

10. Licensing fees for all domestic fishing vessels waived for 2020 (beginning May 2020)

All fishing vessels in Class A (≤ 11m), Class B (11–12.5m) and Class C (12.5-15m) will have licensing fees for 2020 starting from May 2020 waived. 

11. 2% Interest Relief for all Business Loans with Commercial Banks for 3 months 

The Government of Samoa will carry 2% of all interest charged on loan repayments for all business loans with Commercial Banks.

12. Credit Facility at the DBS for Specific Sectors focused primarily on COVID19 recovery

Capital Injection from the Government to DBS to extend to specific sectors who were impacted from COVID19.

13. Assistance to Vulnerable Groups

Assistance for our social welfare NGOs who are currently caring for our most vulnerable citizens. This includes;

    a. Mapuifagalele - Home for the Elderly 

    b. Samoa Victim Support Group

    c. Goshen Trust

    d. Faataua le Ola

    e. Nuanua o le Alofa

    f. Loto Taumafai

    g. Senese

    h. Divine Mercy Moamoa and others

14. Interest Relief for Clients with loans under the South Pacific Business Development (SPBD);

Government to provide interest relief to all the clients under SPBD.

15. Community Outreach;

This assistance is targeted at raising the roles of committees within the villages to take charge of ensuring improved sanitation practices and healthy living as well as education at the grassroots.  To kick start the revitalization of these committees the Government will distribute $3,600 per village committee as verified by the Ministry for Women into established bank accounts to assist with their initial activities.

16. Shelter Improvement Financing;

To promote hygiene and security, the Government will partner with ADRA who has an existing framework of this type to provide concessional financing to vulnerable  families who are in need of secured shelter or shelter maintainance. 

17. Samoa Housing Corporation

Assistance to cover operating cost of the Corportaion throughout the duration of the assistance extended to the public in the Phase 1 Stimulus Package.

18. Electricity Rate Reduction extended until December

This assistance from Phase I which is meant to last until August 2020 will now be extended until December and entails a 10sene reduction in electricity unit rates and a 50% reduction in the daily fixed rates extended to hotels.

19. Water Rate reduction extended until December and to include commercial clients

This is also an assistance from Phase I meant to expire in August 2020 but will be extended until December and will now include commercial users.

 20. Free Trade Concessions for Specific Food items under Phase I extended to August

This is also a Phase I initiative meant to last until the end of June 2020 but has now been extended until the end of September.

 21. Increase provision for the Ie Samoa Show (Faalelegapepe)

The Government continues to acknowledge the role of the women and in particular mothers as providers of families and will therefore raise the annual provision for the Ie Samoa showcase to $1million so that more monies are distributed to women’s committees of each village to assist their families.

22. One Government Grant provision increased

Government’s annual assistance to schools has also been increased up to $18million to assist schools in continuing to provide remote education services to the children of Samoa.

23. Monthly Pension increased by $15;

As previously mentioned, the monthly pension for the country’s senior citizens will now be increased by $15 from $145 a month to $160.

24. Frontline Workers’ Risk Benefits

All frontline workers’ of Government will have access to this benefit should they become infected with the COVID19 in the line of duty.  This benefit will provide a year’s worth of salaries to the family of the frontline worker should they be affected;

25. Construction and upgrade of Rural Hospitals including Physican Quarters.

In line with the Government’s assistance to revive the relocation of medical personnel to district hospitals, the Government will endeavor to refurbish clinics and staff quarters.