Budget to Prosperity – Minister of Finance
It wasn’t quite the event that brought the traffic to a standstill in the main village of Alofi, but it was interesting enough for some to listen to the live broadcast of the presentation of the budget for the current financial year to the Niue Assembly. In the absence of the Premier Sir Toke Talagi, who is in NZ for medical treatment, the honour of presenting the budget to the nation was left to the Acting Premier Hon Billy Talagi.
Sir Toke had left a statement for the Acting Premier to read – which by and large he did but he prefaced his remarks by saying that it was his prerogative, as the temporary leader of the country, to present the statement as he saw fit. He therefore elected not to read a small part of the statement that made personal reference to a member.
Total government expenditure for the financial year 2017/18 is $39 million; of that total $9.7 million is earmarked for ‘Investment and Development’ which comes largely from donors.
Government budgets are not the easiest of documents to follow, so when reference is made to a deficit budget, what that means is that the government expects to spend more than what it has, up to this point, in projected receipts. This deficit is often funded from savings – a department for example, may not have spent all its allocated funding for the year. The deficit for the current financial year is estimated at $1.17 million.
So where and how is the government getting the $29.3 million from? Like most government, some of the funds will come from the various taxes – in our case, from income tax, national consumption tax NCT and some other tax imposed by government. This is expected to bring in $6 million. Another $1.2 million is expected to come from countries who fish in regional waters – not just our waters. New Zealand is providing $7 million in budgetary support – as they do each year. The Department of Transport in the Ministry of Infrastructure is contributing $1.6 million in receipts but no details given. The commercial and trading operations of government is expected to bring in $5.25 million mainly from selling fuel but this needs to be offset against costs of $4.8 million.
There is also another substantial revenue stream of $12 million which is listed under Treasury but without details. This is probably what the opposition often refers to as the Premier’s slush fund – revenue derived from the government’s registered businesses. Government is aiming to raise anywhere from $5m to $10m through its own effort.
The Niue International Trust Fund
A few years back, largely as a result of efforts by Premier Talagi when he was the Minister of Finance, a Trust Fund was set up where donors were invited to contribute. The fund now stands at $61 million, thanks to substantial contributions from New Zealand and to a lesser extend Australia. The long term aim is to use the interest from the Fund to meet the government’s recurrent expenditure. This year $1.64 million from the fund has been added to the government’s revenues.
Government trading companies
The Bond Store, Niue Power, Telecom Niue, Niue Development Bank, Nonu Farm, Niue Broadcasting and the company marketing stamps, coins and water, are not included. The official line is that these are companies that operate under their own legislations and will file their reports accordingly, while others are strictly commercial ventures.
Servants to the Public
Government workers were singled out for a special mention in the budget. Having given public servants a significant increase in salaries and wages and the promise that they will be paid each fortnight without fail, the Minister of Finance…”expect the public servants to work hard, dedicate their work to us, the people and shareholders of Niue. We are very often let down by public servants who like the pay but not the work. Some of these people are held in high regard in our communities but seem to act like children at work.”
But not all public servants are rebellious according to the Minister; only 20% “continue to test us”.
Path to Prosperity
According to the Minister of Finance, the path which his government has chosen is one that will “lead us to be prosperous, populous and strong in all facets.” A noble pathway indeed but it’s one that the small struggling business community may find difficult to embrace.
The Budget will now go to the Public Accounts Committee, where its thirteen members will examine it in depth before it is referred back to the House for the second time.