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Budget 2018/19


A balanced budget of $26m

It might be the most important event on the island’s political calendar for the whole year but, unfortunately it fizzled into nothing more than Niue’s elected representatives just talking among themselves. The proceedings of the House failed to make it to the radio waves. Fale Fono staff say that a brand new conference audio system had developed a fault that could not be rectified in time. Tala Niue has therefore had to rely on a Press Release from the Cabinet office and from the Minister of Finance’s prepared speech. Normally this would not pose any particular challenge but on this occasion, the press statement is a little different from that of Premier Talagi’s prepared budget speech.

And so what will the island be facing for the coming 12 months. For a start the Talagi Government is bringing down a balanced budget of $26m. The funding will come from internally generated revenue of $18.5m and a top-up of $7.5m from New Zealand. But that is not all the assistance that the island will receive from New Zealand. An additional $3m will be provided for technical assistance, asset maintenance and administrative support. No details were provided. Another $4m will go towards capital projects fund to “enable us to develop projects”. Again no indication of just what those projects are. From its own sources, the government will provide $1m for new initiatives. Yet again, no details of the ‘new initiatives’. Premier Talagi identified the following countries and agencies offering assistance to Niue but gave no details of what that assistance might be: Australia, China, Japan, India, Korea, USA, the European Union.

The State Owned businesses are doing well according to the Premier but they will not be making any direct contribution in dividends to the government coffers any time soon because “their development investment needs must take place so we may not ask for dividends but allow them to invest in other businesses or buy equipment for their needs”.

Some in the private sector, who are struggling to attract staff, will be pleased to know that the government is not contemplating any pay increases for public servants. Instead it is looking at tax cuts “to allow more disposable income for the workers”. Great news for the workers. But there’s more. “This will enable us to introduce increases in tariffs to try and offset this” said the Premier.

And so once more, your government giveth and your government taketh away. In short, expect a decrease in income tax but also expect an increase in the cost of goods coming across the border. Visitors will be paying the same tariff as the locals thus helping to boost the public purse. “The locals will however be impacted to a lesser degree by the planned income tax reductions” the statement says, which is meaningless to most but nevertheless nice to know.

It has been mooted for a while but finally Premier Talagi has made the decision to introduce water rates which is probably not a bad move. The island has enjoyed piped water to their homes for a good number of years – now it’s time to pay. The water rates is expected to help may for the maintenance of water supply system. No mention however if the bottled water venture will get off the ground soon.

Government will push ahead with its programme to wean the island off fossil fuel and to rely more on solar energy to generate electricity. New Zealand had already given $5m for the project with a further contribution from Japan. “This should take us to 80% 90% reliant on Renewable Energy” said the Premier. The plan is to bring in electric cars which again is a great move but there’s no detail on who, why, what, when and for how much. Given the prohibitive cost of electric cars at this stage, it’s likely that only the disciples will be favoured. For the rest, perhaps the government could ask the People’s Republic to donate a few hundred electric bicycles to go with the new road.

An area which is cause for concern will finally be receiving some attention from the government – waste management. The Premier’s budget speech said: “We will use the environment capacity measurements to ensure we maintain a clean pristine and pollution free environment.” We need to turn to the Press Release to make more sense of those weasel words.

“An immediate priority for Government is to implement the Governments waste management strategy to ensure a clean pristine and pollution free environment, starting with the immediate management of Niue’s landfills, disposal of hazardous, other solid waste and liquid waste. The Government intend with some donor assistance, to invest in the use of new technologies and capital plant to minimise waste and improve recycling and collection.”

In addition to the on-going improvements to the two gateways to the island – the airport and the port – plans are also being finalised for building a new Fale Fono. The new home for Taoga Niue is to be completed soon.

For the long suffering motorists on the island – help is on its way. China will start working on the roads in December.

The Budget has now been referred to the Public Accounts Committee before it comes back for its second reading in the Assembly.

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  1. Niue MP resigns in protest over lack of transparency
    12:22 pm on 17 July 2018

    A former Niue finance minister has resigned from the Public Accounts Committee over what he says are government agencies failing to provide transparent accounting records.
    The New Zealand visitors are welcomed to Niue with a Takalo, a traditional war dance.

    The New Zealand visitors are welcomed to Niue with a Takalo, a traditional war dance. Photo: Pool photo / New Zealand Herald / Michael Craig

    The MP Terry Coe directed his concerns particularly at the chief executive of State Owned Enterprises (SOEs), Wayne Harris-Daw.

    “They have put it in but they are so vague you can’t clarify anything that is in there and it doesn’t show the assets that they have bought and the assets that are broken down and not working,” Mr Coe said.

    “So it’s really that transparency of where all the money has been spent and really should be coming into the treasury accounts,” he said.

    The SOEs had only submitted documents on an annual basis instead of every three months as was previously the practice, Mr Coe said.

    This did not give MPs information on the actual financial state of the enterprises, he said.

    In the Public Accounts Committee, Mr Coe said he was often shut down by three cabinet ministers who dominated proceedings.

    By resigning he was able to make his points more freely, Mr Coe said.

    Mr Harris-Daw has not replied to a request for comment from RNZ Pacific.


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