Education tops the allocations with $91.2 million while Health is given $86.6million as govt. looks to contain spending

The Minister of Finance, Sili Epa Tuioti’s budget of $894million has been passed by Parliament without too much fuss.

The nod of approval came yesterday after two full days of discussion in Parliament at Tuanaimato, where the majority of Members of Parliament supported and praised the budget.

For Prime Minister Tuilaepa Sa’ilele Malielegaoi, the passing of the budget means the start of hard work for Members of Parliament as the government begins to implement some of its development programmes to improve the lives in Samoa.

According to Tuilaepa,the government is working on more than 90 projects costing well over $500million. 

All these projects in different sectors reflect the fact that the H.R.P.P government is a working group who only have one thing in mind and that is to make the lives of people better.

But the Prime Minister said it’s important that the government chooses its priorities correctly. 

And over the years, the government’s focus has always been on education and health, he said. This is based on the belief that a healthier and well-educated nation will inevitably become prosperous and successful.

When he tabled the budget, Minister Sili reminded that the budget is guided by three key words; responsible, fair and visionary. He added that there is a strong need to live within our means and build for the future.

“This budget takes the first step in that direction, bringing the cash deficit to GDP ratio from 4.7 per cent last year to 3.5 per cent this year. That brings the cash deficit in line with the target that was set in the Strategy for 2012/2016,” he said.

“This is quite an achievement; we have reduced the deficit measured in this way from 6.4 per cent in 2011/2012. It has not been easy for the Government to take the measures needed to reach this position. We recognize that our people want and need better services. The approach we have taken in this budget is to identify responsible and affordable measures to raise some additional revenue and find savings from within Ministries and Agencies, while protecting front line delivery of services.

Sili also highlighted the importance of maintaining fiscal discipline. 

“While the cash deficit to G.D.P ratio is a widely accepted measure and has been a useful target for us over the years, what matters in the longer term is whether we are paying our way; whether we are keeping recurrent expenditure in line with what we raise in ordinary receipts – our own taxes and charges,” he said.

“In this budget, our Ordinary Receipts are estimated to still be less than our Current Payments. If we are to strengthen our economy, become less reliant on others, reduce debt and build buffers against possible adverse events in the future, we need to contain our spending, particularly our recurrent spending, so that it grows in line with our revenue capacity.

“I have spoken a lot about the future. Some modest increases in taxes and some savings in expenditure are included in this budget. But getting the right budget for the right time means that we have to be thinking beyond today, beyond the numbers and the measures I am announcing this morning. The Government has set in place a process for the next budget to ensure we continue on the right path.”

Key expenditure priorities.

1. Education Sector

The total budget for the sector is $91.2million. This represents 18.5per cent of total expenditures programs. This allocation includes $6.65million budget support financing from the Governments of Australia and New Zealand.

Priorities include:

i. $71.7 million to the Ministry of Education, Sports and Culture for normal operations inclusive of the third and final phase of the reclassification of Teacher’s Salary to commence in January 2017;

ii. Included in the above envelope for the Ministry is $6.0 million grant for Private and Mission Schools; and

iii. $1.5 million to fund stationeries for all Government Schools.

iv. A $5.7million grant has been appropriated for the Samoa Qualifications Authority;

v. $12.3 million grant for the National University of Samoa;

vi. $1.5 million to fund the operations of the Samoa Sports Facility Authority.

An additional $6.5 million allocation is also provided under the Ministry of Finance for the implementation of the School Fee Grant Scheme for both primary and secondary education.

2. Health Sector

The total budget allocation for the Health Sector is $86.8 million representing 17.6% of total expenditure programs.

Priorities include:

$70.7million grant is provided for the National Health Services for the hospital’s operations;

Included in this appropriation is $5 million to cover the cost of the overseas medical treatment scheme;

$9.5 million is provided towards the Ministry of Health operations;

$6.6 million grant is earmarked for the National Kidney Foundation;

3. Infrastructure

The budget allocated for infrastructural development is

i. $28.2 million for the Ministry of Works, Transport & Infrastructure and includes;

ii. $11.3million grant to the Electric Power Corporation for VAGST payments and Community Service obligations; and

iii. $13.0million grant to the Samoa Water Authority to meet Community service obligations and to support key investment priorities under the European Union budget support.

iv. The Land Transport Authority will receive a grant of $18.3million to support its operations; and

v. $8.1million has been allocated to the telecommunications sector comprising $4.87million for the Ministry of Communication and Information Technology and $3.2million funding for the Office of the Regulator.

The Government has also earmarked $1.7million under the Ministry of Communication as contribution to the Samoa Broadband Highway annual fees.

The Australian Government, Asian Development Bank, and World Bank are providing funding support of approximately $75million for the new submarine cable under the Samoa Connectivity Project. This project is expected to be completed in August 2017.

4. Agriculture

The Agriculture Sector has been allocated $13.3million under the Ministry of Agriculture and included in this appropriation are allocations to support the stimulus package to revitalize the replanting of cocoa, coconut and taro to meet the increasing demand for these products from the private sector for processing and value adding for export. The Ministry budget will provide continuing support for the annual agricultural shows in both Savaii and Upolu. The World Bank is providing support to the agriculture sector through the Samoa Agriculture Competitiveness Enhancement project. This project will provide an additional $12.7million. The ADB is also contributing $7.7million to the sector under the AgriBusiness Support Program.

5. Trade, Commerce and Manufacturing

The following allocations have been made in the proposed 2016/17 budget to support the sector:

i. $6.8million to the Ministry of Commerce operations;

ii. $9million to the Samoan Tourism Authority;

iii. $450,000 to support the Small Business Enterprise Centre;

iv. $200,000 general support to the Private Sector; and

v. $178,000 to the continuing apprenticeship training under the National University of Samoa.

VIII. UNFORESEEN EXPENDITURES

A provision of $14.8 million tala has been provided to cover unforeseen expenditures that may arise during the course of the next fiscal year.

IX. SUPPLEMENTARY ESTIMATES 2015/16

The Government is also proposing to table a Second Supplementary Budget for the financial year 2015/2016. The supplementary budget is cost neutral as it will be funded from the reallocation of existing resources. Therefore it has no impact of the fiscal deficit.

Parliament will resume on 27 Monday 2016.