“Sustaining Growth Pathways for the Social, Economic and Climate Resilience of our Common Wealth”

Mr. Speaker and Honorable Members,

In accordance with Standing Order 131, it is with great honor that I stand before this esteemed House today, to present the Statement on the Main Estimates for the fiscal year 2024/2025.

Firstly, I give praise to the Heavenly Father for His endless blessings on Samoa and its people as we navigate our country through the many challenges in the past and those we will continue to face today.

MACROECONOMIC OUTTURN 

Mr. Speaker and Honorable Members,

The Pathway for the Development of Samoa 2021/22 – 2025/26 is our national development plan for empowering communities, building resilience and inspiring growth. As we reach the mid-term mark, it is important to take stock of progress. 

This progress is the collective efforts of all Samoan citizens, through the use of inclusive policies and programs, to address the socio-economic challenges and welfare of our communities.

In accordance with Key Strategic Outcome 1: “Improved Social Development”, targeted measures implemented include:

The Government has continued to expand its social protection measures under Social Assistances such as the Shelter Financing Initiative, Budget support to the Elderly Homes, Disability Benefit Scheme, Grants to NGOs, as well as under the Labour Market Programs which includes the Apprenticeship scheme, Vocational programs and the Labour Mobility schemes.

In collaboration with our partners, the Government has remained committed to addressing social issues and prioritizing vulnerable groups. This commitment is evidenced through initiatives such as the Malu i Fale Campaign, the commemoration of the 16 Days of Activism, National Youth Week, International Day of Rural Women, Mothers’ Day and Fathers’ Day.

To ensure affordable access to quality education, the annual One Government Grant now stands at $18.0 million tala and covers all levels of education from early childhood education, to primary and secondary levels. In addition, 35 districts have provided scholarship schemes under the District Development Program to assist with transition rates and affordability of education. The Government has also increased scholarship opportunities to Fiji and New Zealand.  

In contribution to quality education, the percentage of teachers with higher education qualifications has increased from 44.0% (2021) to 47.0% (2022) and 50.0% (2023) for primary teachers. Similarly, for secondary education teachers, there has been a positive trend from 63.0% (2021) to 68.0% (2023). 

In terms of public health services, out of the nine district hospitals, seven have been staffed with multidisciplinary teams by 2023. The upgrade of district hospitals and doctors’ residence are also underway. 

Education and health initiatives account for 16.4% and 6.3% respectively of the first $51.0 million tala implemented from FY2022/23. 

Under the Key Strategic Outcome 2, "Diversified and Sustainable Economy", the Government has reinforced its commitment to supporting ongoing opportunities for economic growth.

The Government has prioritized the diversification of tourist attractions, leading to an increased number of community-based attraction sites including the new revived Palauli Heritage Trail, Masamasa National Park Trails and Lookout, and the Satoalepai Wetland Turtles. 

The First Harvest Program (Ulua’i Seleselega) has continued as a food security partnership between the Districts and the Ministry of Agriculture and Fisheries. In addition, the Agriculture and Fisheries initiatives account for 53.4% of the District Development Program since implementation in FY2022/23. 

The Government’s support to the Private sector to date included the $6.0 million tala to Samoa Business Hub benefitting 951 micro and small businesses, and $8.0 million tala for the highly concessional loan scheme under the Development Bank of Samoa that reached 80 medium sized businesses. 

The number of workers recruited under the Labour Mobility Schemes with Australia and New Zealand increased from 5,634 (FY2021/22) to 6,736 (FY2022/23). In addition, the guest workers from Samoa to American Samoa has been registered at 1,222 to date, with 500 more opportunities confirmed during the Atoa Samoa Talks in May 2024.  

The Government had approved the policy for the Samoa Credit Information Registry which aims to reduce lender risk, improve access to finance; and promote financial sector stability. This will be the basis for the development of the Samoa Credit Bureau Bill.

Under the Key Strategic Outcome 3 “Security and Trusted Governance”, the Government has completed the following key initiatives:

The National Security Policy and Implementation Strategy 2024 has been approved to strengthen our national resilience in terms of human security, environmental and resource security, transnational crime and cyber security.

The new Police Patrol Boat Nafanua III has ensured our Maritime border and security monitoring is strengthened. In addition, the vessel will greatly assist with search and rescue operations and disaster response efforts.

For trusted governance, improved accountability has been strengthened through the adoption of the Internal Audit Charter by 22 Government Agencies with Internal Audit function as recorded to date.

Key Strategic Outcome 4, "Secured Environment and Climate Change", underscores the Government's dedication to preserving a safe and sustainable environment. This commitment is supported by several pivotal initiatives:

The Government has launched the new Samoa Energy Sector Plan for FY2023/24 to FY2027/28, setting forth goals to expand investments in renewable energy, improve the efficiency and reduce dependency on imported fuels.

Samoa is benefitting from the regional program – Climate Action Pathways for Island Transport (CAP-IT), providing electric vehicles and installation of charging stations for Government use. The aim of this program is to reduce Greenhouse gas emissions from vehicle usage in Samoa. The first 19 electric vehicles have arrived in country, with a further 60 to be received in the next financial year, and will be used for Commonwealth Heads of Governments Meeting.

The percentage of compliance on health safety, security and environment standards for petrol stations has improved from 70.0% in 2022 to 92.0% in June 2023. Additionally, the number of petrol stations have increased from 24 (2022) to 27 (2023) (including the Government Bowser) improving the serviceability and accessibility for transport users. 

There has been an increase in marine protected areas in terms of hectares from 6,509 recorded in 2022 to 11,373 in 2023, reflecting our commitment to inshore reefs conservation.  

Sector plans with mainstreamed climate and disaster resilience strategies has increased from eight in 2022 to ten in 2023. 

Under Key Strategic Outcome 5, "Structured Public Works and Infrastructure", the Government remains committed to enhancing public works and infrastructure that underpins social economic progress. The following initiatives have been implemented to date:

The re-opening of the Satitoa Shipyard and Slipway under a Public Private Partnership arrangement with a local company has provided employment opportunities for the neighbouring villages and dry- docking services for ships and fishing boats. 

The Faleolo International Airport is undergoing improvements with the construction of the new VIP lounge and the regional terminal and apron.

The construction of the new Savalalo Market is now underway with the aim to have it completed by 2025. 

The Upolu West Coast Road rehabilitation works is expected to be completed by June 2024. 

The progress so far demonstrates the continuous resilience building for our economy and also aligned to fiscal targets to ensure credibility. 

Mr. Speaker, 

Allow me to also provide an update on our economic progress;

Our economy rebounded stronger than expected, supported by robust economic activities since border re-opened in August 2022, including steady return of tourists and visiting families.   

The annual growth to end December 2023 is 10.2% higher than December 2022; 

The annual inflation rate remains elevated but gradually decreased to 5.9% in March 2024 from a high peak of 12.0% in June 2023. This largely reflects the sharper decline in imported inflation rate from 14.5% to 5.1%, and domestic inflation rate from 9.2% to 6.0% over the comparative period.

Our external sector remains strong, with the Official Gross Foreign Reserves at an all-time high of $1.3 billion tala equivalent to 13.1 months import cover in February 2024.

Visitor arrivals increased by 81.2% to 121,521 visitors in the first eight months of the current financial year compared to the last financial year. Consequently, visitors’ earnings surged by 91.8% to approximately $419.8 million tala, up from $218.8 million tala.

Similarly, remittance flows increased by 2.2%, registering a total of $580.3 million tala in the first eight months of the current financial year. 

Public debt has continued to decline with a debt to GDP ratio of 30.6% at the end of December 2023, reflecting a reduced debt stock of $865 million tala and an increasing GDP growth.

Mr. Speaker, 

The positive performance of our economy in the first half of the current fiscal year is a testament to the collective efforts of our communities, private sector and Government in implementing recovery initiatives and development projects, underscoring our unwavering commitment to sustainable economic growth and development.

MACROECONOMIC OUTLOOK

Mr. Speaker and Honorable Members,

The International Monetary Fund (IMF) projects global growth to be at 3.2% for the current fiscal year and will continue at this pace over the medium term. This projection is influenced by various economies around the world tightening their policies to address global inflation pressures. 

For Samoa, the Government forecasts a steady economic outlook, projecting a higher-than-anticipated growth rate of approximately 6.6% for the current year. This is a revision from the 5.0% growth projected during last year's budget period, indicating a stronger economic performance than initially expected. The economy will increase further to 5.8% growth rate in FY2024/25 compare to the initial expectation in the previous budget of 3.9%.

The headline inflation is expected to continue to ease back to 5.0% by the end of June 2024, however the risks remain of external shocks that could push up global food and fuel prices.

 

Our external position is expected to remain strong with the gross foreign reserves estimated to remain strong above $1.5 billion tala. This is attributed to further influx of funds for development projects, as well as foreign exchange payments associated with CHOGM preparations.

BUDGET SETTING 

Mr. Speaker and Honourable Members, 

The budget for 2024/2025 presented to the House this morning is set against a steady economic recovery since borders re-opened in August 2022, the Government’s aspiration for its people centred priorities, a gradual fiscal consolidation and an accommodative monetary policy stance.

Mr. Speaker, 

As we look ahead to the new fiscal year, our emphasis will shift towards sustaining this growth and consolidating our achievements to ensure long-term resilience and stability. These efforts will be driven by our host of the Commonwealth Heads of Government Meeting in October 2024, continuation of the District Development Program, Human Capital Development and Cost of Living Adjustment, Enhancement of Public Service Efficiency, and Implementation of key Development Projects in the different sectors of the economy.

As we implement these key initiatives in the coming fiscal year, our efforts will reinforce the progress we have made, providing a sound platform for sustained growth and resilient development. 

Against this setting, we are now poised to advance confidently under the guiding theme of "Sustaining Growth Pathways for the Social, Economic, and Climate Resilience of Our Common Wealth." 

Mr. Speaker, 

We do acknowledge the risk and vulnerability of our economy to global developments and challenges including high, more frequent natural disasters and the negative impacts of climate change. The pandemic has re-emphasized for us the need for economic diversification and gradual shift from over reliance on traditional sectors as seen by the impact that the loss of tourism had on our economy. Therefore, the Government will focus on sustainable and resilient pathways for growth while continuing to build fiscal buffers to counter immediate and future disasters.  

BUDGET STRATEGY

Mr. Speaker and Honourable Members,

The budget therefore laid before the House today, seeks to record a budget deficit of 2.1% of GDP for the coming fiscal year as the Government continues to drive its development agenda towards sustained growth in order to ensure socio-economic welfare and stability.

Mr. Speaker,

The policies and programs for the fiscal year ahead have been classified into the following five main categories:

Hosting of the Commonwealth Heads of Government Meeting (CHOGM)

The CHOGM in October 2024 presents a significant opportunity for Samoa. Our preparation efforts are focused on enhancing infrastructure and governmental services to ensure that Samoa is well-equipped to host this prestigious international event. The event is expected to boost our economy by attracting international visitors and investment, thereby benefiting our private sector and promoting local businesses. The new budget is allocating another $20.0 million tala for the hosting of this event in terms of catering, accommodation, accreditation, receptions, security, health and emergency services, communication and I.T. services, transport and venues.

The CHOGM theme is focused on resilience, a unifying approach that transcends the humanitarian, development, human rights, and peace and security pillars. By examining all the key pillars of the Commonwealth through a resilience lens, we are preparing for immediate challenges and creating a stable and secure environment that fosters long-term economic growth. 

This approach ensures that our investments in infrastructure and services contribute to sustainable development and economic prosperity for Samoa.

People-Centered Priorities

As we enter the third year of our $1.0 million tala per District program, we continue to make significant progress in disbursing the allocated funds. This program has supported a wide range of initiatives, including educational sponsorships, agricultural development, and health improvements.

The government remains committed to enhancing school connectivity for all primary schools, with a funding of $880,000 tala appropriated under the Ministry of Education and Culture.

We are also dedicated to improving healthcare facilities with an increase of $1.0 million tala for maintenance of the main hospital and an increase to $6.0 million tala for the overseas medical treatment scheme.

Promotion of sports development as a people centered initiative sees the continuation of the Sports Development Fund of $2.5 million tala under the Ministry of Sports and Recreation.

We continue to support Micro, Small, and Medium Enterprises (MSMEs) through the $3.0 million tala grant administer by the Small Business Hub (SBH) and $3.0 million tala concessional lending via the Development Bank of Samoa (DBS). This ongoing support will ensure that our private sector is ready for the Commonwealth Heads of Government Meeting (CHOGM).

We have also increased support to various Non-Government Organizations’ (NGOs) with a total budget of $2.0 million tala. This includes expanding services and programs aimed at vulnerable populations, enhancing community resilience, and ensuring that our social safety nets are robust and inclusive. By bolstering our NGOs, we aim to create a more supportive environment for those in need, fostering a society where everyone has the opportunity to thrive.

Human Capital Development and Cost of Living Adjustment 

To further develop our Human Capital, the Government will be introducing two new initiatives aimed at strengthening partnerships with professional bodies and upskilling public servants.

An amount of $100,000 tala has been allocated under the Public Service Commission’s budget for partnership grants of $10,000 tala per professional body (e.g. Samoa Institute of Accountants). This funding will assist with capacity development initiatives aim at enhancing the pool of local experts available to provide competitive bids for consultancy works under development projects. Moreover, this will strengthen the local content of Government procurement awards.

Secondly, $200,000 tala has been allocated for a scholarship scheme targeting active public servants who are doing part time studies at the undergraduate level. The scheme will be implemented using a competitive process with a set of eligibility criteria. 

These are in addition to the existing Government scholarship scheme of $6.3 million tala, providing educational opportunities for undergraduate studies locally at the National University of Samoa and in Fiji and New Zealand. A provision of $1.5 million tala is also appropriated under the Ministry of Education and Culture for the teachers’ higher education scheme. These initiatives are complimented by the existing scholarship opportunities from our development partners.

The final phase of the Cost-of-Living Adjustment (COLA) is set to be done in FY2024/25, with the goal of enhancing the purchasing power of public servants, thus stimulating further economic activity. In this phase, salaries for all Principal Officers and below will be increased by 3.0%. Those earning above the Principal Officer level up to below the CEO level will see a 2.0% increase, while CEOs will receive a 1.0% increase only.

Simultaneously, the Remuneration Tribunal has undertaken a comprehensive review and restructuring of the salary scales for the executive, parliament, and judiciary. They have recommended revised remunerations aimed at ensuring fair compensation and proper structuring of the salary scale. In addition, the Parliamentary Pension Scheme will be increased based on the June 2020 Actuarial Review of the Parliamentary Pension scheme. These adjustments will also contribute to boosting purchasing power and are scheduled to take effect on 1st July 2024.

Enhancement of Public Service Efficiency

I am pleased to report that the second phase of the Public Service Review has been completed and this has been reflected in the FY2024/25 Budget. 

To effectively capture the whole of Government lands under one framework, a new Ministry of Lands and Survey will be established effective July 2024 with the separation of related functions from the existing Ministry of Natural Resources and Environment. Lands under the Samoa Land Corporation (SLC) and the Samoa Trust Estates Corporation (STEC) will be transferred to this new Ministry in the following financial year once the winding up process by the Ministry of Public Enterprises is completed.

The new Ministry of Sports and Recreations will also be established in the new financial year with the Sports Division from the Ministry of Education and Culture. It is also expected that the Samoa Sports Facilities Authority will be winded up with functions to be merged into this new Ministry in the following financial year. 

In addition, the Samoa Exports Authority Bill is currently under consultation for establishment of the said authority in the new financial year.

These additions are poised to substantially enhance the required services under the relevant sectors and industries. 

Implementation of Key Development Projects

The new financial year will see the commencement of the Savaii courthouse construction which is a key step in enhancing our judicial infrastructure and services on the big island. An initial $5.0 million tala has been allocated to start construction of this $17.0 million tala development. Additionally, the US$111.2 million Alaoa Multipurpose Dam Project will commence in the upcoming fiscal year, significantly benefitting the energy, water and environment sectors.

The construction of the Lano and Afega bridges are also expected to commence in the next financial year under the Samoa Climate Resilience Transport Project.

In addition, the active portfolio of development projects will continue to be implemented with the support of our respective development partners. 

BUDGET AGGREGATES

Mr. Speaker and Honourable Members,

I would now like to highlight the key components of the 2024/2025 Budget:

The 2024/2025 Main Estimates anticipate a cash deficit of approximately $153.6 million tala, which is equivalent to 2.1% of GDP under the Government Finance Statistics (GFS) format. 

REVENUE MEASURES

Mr. Speaker and Honourable Members,

For the fiscal year 2024/2025, the Government is not introducing nor increasing any taxes, but rather the focus is on improving tax compliance given the high level of forecasted economic activity. 

Total receipts are anticipated to increase by 7%, driven by an 18% increase in External Grants equivalent to $30.4 million tala in nominal terms, and a 4% increase in Ordinary Receipts equivalent to $33.3 million tala in nominal terms. 

Starting 1 July 2024, we will introduce a new cost recovery measure associated with the Australia and New Zealand labor mobility schemes, contributing to our non-tax revenue aggregates.

EXPENDITURE PRIORITIES

Mr. Speaker and Honourable Members,

The aggregated total expenditures for the fiscal year 2024/2025 are estimated at $1.16 billion tala. This figure includes development programs funded by our development partners, reflecting a 4.0% increase over the current year's estimates.

Mr. Speaker,

I will now outline the details of the estimates for each Ministry and Office for the fiscal year 2024/2025:

Ministry of Agriculture and Fisheries - $20,434,017

Outputs provided by the Ministry - $13,048,158

Third Party Outputs - $5,269,426

This includes the Government Grant to the Scientific Research Organisation of Samoa - $5,169,426

$100,000 for the Animal Protection Society

Transactions on Behalf of State - $2,116,433

Ministry of Commerce, Industry & Labour - $20,787,951

Outputs provided by the Ministry - $5,812,863

Third Party Outputs- $13,272,575

This includes the Government Grant to the Samoa Tourism Authority - $9,572,575 

$350,000 to the Samoa Chamber of Commerce

$350,000 for the Samoa Business Hub 

$3,000,000 for the Micro, Small and Medium Enterprises Fund channelled through the Samoa Business Hub.

Transactions on Behalf of State - $1,702,513

Ministry of Communications and Information Technology - $10,432,093

Outputs provided by the Ministry - $4,797,702

Third Party Outputs - $2,657,513 which is the Government Grant to the Office of the Regulator

Transactions on Behalf of State - $2,976,878

Ministry of Education and Culture - $135,466,017

Outputs provided by the Ministry - $84,753,466

Third Party Outputs - $42,724,455

This includes Government Grant to the Samoa Qualifications Authority - $6,600,317

National University of Samoa - $18,074,138

One Government School Grants - $18,000,000

Samoa Arts Council - $50,000

Transactions on Behalf of State - $7,988,096

Ministry of Sports and Recreation - $8,218,889

Outputs provided by the Ministry - $2,011,699

Third Party Outputs - $3,288,304 which is the Government Grant to the Samoa Sports Facility Authority 

Transactions on Behalf of State - $2,918,886

Ministry of Finance - $117,790,778

Outputs provided by the Ministry - $18,828,882

Transactions on Behalf of State - $98,961,896

This includes $37,500,000 for the Senior Citizens Pension and Disability Benefits which will be administered by the Samoa National Provident Fund

$3,000,000 to the Development Bank of Samoa for the Highly Concessional Loan Facility

Ministry of Foreign Affairs and Trade - $30,191,493

Outputs provided by the Ministry - $27,319,405

Transactions on Behalf of State - $2,872,088

Ministry of Health - $156,664,219

Outputs provided by the Ministry - $117,042,449

Third Party Outputs - $11,646,101

This includes Government Grant to the National Kidney Foundation – $10,996,100

$200,000 for the Non-Communicable Disease Clinic

$100,000 for the Samoa Red Cross Society

$100,000 for the Samoa Cancer Society

$100,000 for the Goshen Trust

$100,000 for the Matuaileoo Environment Trust Incorporated (METI) 

$50,000 for the Samoa Family Health Association

Transactions on Behalf of State - $27,975,670

Ministry of Justice and Courts Administration - $22,632,720

Outputs provided by the Ministry - $15,032,653

Transactions on Behalf of State - $7,600,067

This includes $450,000 for the Legal Aid Services

$5,000,000 for the Savaii Court House Construction

Ministry of Natural Resources and Environment - $22,722,736

Outputs provided by the Ministry - $12,857,953

Transactions on Behalf of State - $9,864,783

This includes $4,486,273 for the Waste Management Service Contracts

Ministry of Lands and Survey - $8,538,886

Outputs provided by the Ministry - $2,937,181

Transactions on Behalf of State - $5,601,705

Ministry of Police, Prisons and Corrections - $58,333,194

Outputs provided by the Ministry - $38,722,738

Third Party Outputs - $14,261,102 which is the Government Grant to the Fire and Emergency Services Authority 

Transactions on Behalf of State - $5,349,354

Ministry of the Prime Minister and Cabinet - $11,008,147

Outputs provided by the Ministry - $7,995,943

Transactions on Behalf of State - $3,012,204

Ministry for Customs and Revenue - $14,436,486

Outputs provided by the Ministry - $11,210,841

Transactions on Behalf of State - $3,225,645

Ministry for Women, Community and Social Development - $65,665,347

Outputs provided by the Ministry - $11,856,500

Transactions on Behalf of State - $53,808,847

This includes the $51,000,000 for the District Development Program.

Ministry of Works, Transport and Infrastructure - $50,762,039

Outputs provided by the Ministry - $6,743,020

Third Party Outputs - $43,238,426 this includes; 

$3,000,000 for Community Service Obligations by the Samoa Water Authority 

$3,000,000 for Community Service Obligations by the Electric Power Corporation

$5,050,000 for the EU’s Budget Support to the Samoa Water Authority 

$32,188,426 Government Grant to the Land Transport Authority 

Transactions on Behalf of State - $780,593

Office of the Attorney General - $5,642,267

Outputs provided by the Office - $4,753,303

Transactions on Behalf of State - $888,964

Samoa Audit Office - $4,431,763

Outputs provided by the Office - $3,759,872

Transactions on Behalf of State - $671,891

Office of the Electoral Commissioner - $3,392,353

Outputs provided by the Office – $2,825,540

Transactions on Behalf of State - $566,814

Office of the Clerk of the Legislative Assembly - $8,402,796

Outputs provided by the Office - $7,136,497

Transactions on Behalf of State - $1,266,299

Office of the Ombudsman - $1,727,923

Outputs provided by the Office - $1,496,426

Transactions on Behalf of State - $231,497

Public Service Commission - $13,372,015

Outputs provided by the Office - $5,212,236

Transactions on Behalf of State -$8,159,779

Samoa Bureau of Statistics - $5,567,770

Outputs provided by the Office - $4,639,044

Transactions on Behalf of State - $928,726

Law Reform Commission - $1,522,256

Outputs provided by the Office - $1,233,831

Transactions on Behalf of State - $288,425

Ministry for Public Enterprises - $ 4,788,468

Outputs provided by the Ministry – $2,973,687

Transactions on Behalf of State - $ 1,814,781

This includes $1,213,804 for establishment of the Samoa Exports Authority

UNFORESEEN EXPENDITURES 

Mr. Speaker,

The estimated Unforeseen Vote for the FY2024/2025 is $24.1 million tala which is 3.0% of the total Expenditure Programs. 

DEVELOPMENT EXPENDITURES 

Mr. Speaker,

We anticipate total cash grants of $171.1 million tala for implementation of development projects. This significant increase highlights the firm support from our development partners for ongoing projects, sector programs, and newly approved investments across vital sectors, including transport and infrastructure, agriculture and fisheries, environment, health, and education.

In addition, sector budget supports will continue for the health, water, agriculture and fisheries sectors. We have also secured an interim support for the Education sector, reflecting Government’s commitment to enhancing educational outcomes and expanding access to quality education across Samoa.

Total Aid in-kind is projected at $108.3 million tala. These resources will be directly received by the beneficiaries thereby supporting the implementation of our development priorities at both national and community levels.

CONCLUSION

Mr. Speaker,

As we present this budget, we re-affirm the commitment to sustaining Samoa's resilient development through effective and genuine partnerships with our communities, the private sector and development partners. This budget reflects our continuous national aspirations for sustainable economic and social growth.

I acknowledge the assistance by our bilateral and multilateral development partners, whose generosity have been pivotal in Samoa’s ongoing development. 

I would also like to recognise with appreciation the continuous support of the communities, private sector, non- government organisations, and especially to the citizens of Samoa for their unwavering support of our government’s efforts.

Mr. Speaker and Honourable Members,

I now commend the 2024/2025 Main Estimates to the House. 

As we approach the celebration of our 62nd Year of Independence, we fervently hope that God will continue to safeguard and bless our nation.

Soifua ma ia Manuia.