Govt. deficit debate gets heated

A dispute over the meaning of 'deficit' and 'bankruptcy' drew debate from Samoa’s top accounting minds in Parliament floor on Thursday night. 

The Member of Parliament for Gagaifomauga No.3, La’auli Leuatea Schmidt told Parliament that a deficit of $127 million in the main budget means the Government is broke. 

He was responding to a point of clarification from Prime Minister, Tuilaepa Dr. Sailele Malielegaoi who accused the opposition members of making false promises to deceive the public. 

Although much of the current Parliamentary sitting, which started mid-January, has been occupied by farewell speeches before the term ends, the debate on the Supplementary Budget has been on the fringes of discussions. 

Addressing financial pledges made outside Parliament by political party F.A.S.T. (Faatuatua i le Atua Samoa ua Tasi), Prime Minister Tuilaepa questioned where the party members will get the money to distribute to constituencies. 

He noted that in the main budget there is a $127 million [2020-2021] deficit meaning that Government spending for the year has overshot its revenue. 

He explained that you cannot distribute money when there is a deficit but his Government is able to operate due to prudent financial management. 

“The reason why we are able to spend these amounts is because the financial institutions know that [the country’s] finances are well managed, as well as our developments,” said Tuilaepa. 

The Prime Minister suggested that should F.A.S.T. come in to power, they would not be able to keep their promises of providing constituencies with substantial development funding. 

“For those who are deceiving the public, there we have exceeded our spending by $127 million compared to our revenue. So where will you get the money to distribute?” 

Tuilaepa added that it was misleading to say that money would be distributed without knowing where it would come from and no matter what the member says no one will ever believe him, also accusing La'auli of lying during his swearing in. 

But La’auli fired back at Tuilaepa saying it was clear that the $127 million deficit means the Government is broke. 

He maintained that his political party will not follow the current Government’s policies as they have their own plans in place. 

The Minister of Works Transport and Infrastructure, Papalii Niko Lee Hang intervened after break. 

A former Minister of Finance and an accountant by profession, Papalii said deficit does not mean the Government is bankrupt. 

"For your information, budgets are estimates. 

"The loss and profit can’t be determined until the actual figures are calculated,” argued the Minister. 

“Only accountants and auditors can understand these and what the leader of F.A.S.T. is claiming is not true and should be corrected.” 

The Chairperson of the Finance Expenditure Committee and M.P. for Alataua West, Aliimalemanu Alofa Tu’uau also interjected. 

Also an accountant, Aliimalemanu dismissed the claims made by La’auli. 

She said she was disappointed with the Gagaifomauga No.3 Member and his allegations after she gave a detailed outlook on the country’s financial status in the past weeks. 

She then listed out the deficit and profit from Government over the past five years. 

In 2015/2016 she noted a deficit of $11 million and audited profit of $28.9 million; in 2016/2017 deficit of $84 million and audited profit of $63.8 million; in 2017/2018 deficit $21.1 million and audited profit of $30.9 million and in 2018/2019 recorded a $12.8 million deficit and audited profit of $47.6 million. 

She then challenged the leader of F.A.S.T. to point out where in the budget it states that the Government is broke. 

However, La’auli said he was responding to comments made by the Prime Minister questioning where the party will get money to distribute when the Government is broke. 

“No matter how you put it, a deficit is a loss, it's broke,” he added. 

The Prime Minister took the floor to respond. 

He told Parliament that he never used the word broke; he had referred to the term deficit. 

“Estimates are different from actual figures, do you understand?” he asked La’auli. 

“I did not use the word 'broke' and only a person who does not understand financials would use those terms. But you are used to operating businesses that are broke…” 

Tuilaepa told the Member to stop misusing such terms as it is only leading him astray. 

Laauli did not want to leave the matter as is, appealing to the Speaker to give him a chance to reply. 

The F.A.S.T. leader told Parliament that it appears Government is worried about how they will generate revenue to run the country. 

He said they will reform financial institutions in Samoa so they can retain funds for developments and clarified that his party never siad they would distribute money to the constituencies.

“We will not distribute the money, we will allocate funds for each constituency,” he said. 

“What do you call loss in revenue? It means the Government is broke.” 

At this point the Minister of Works, Papalii intervened. 

He said he wanted to clarify the matter to the Member that broke does not mean the same thing as deficit. 

Papalii then chided La’auli, saying as he has been in Parliament for many years and should know the difference between the two terms. 

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