3 Jul 2023

Tonga approves biggest budget to enable economic recovery

9:40 am on 3 July 2023
Tonga's Legislative Assembly at its temporary location in the Tongan National Cultural Centre

Tonga's Legislative Assembly at its temporary location in the Tongan National Cultural Centre Photo: VNP / Daniela Maoate-Cox

Tonga's largest-ever budget will ensure the country can recover from covid and natural disasters, RNZ Pacific's correspondent says.

Last week Parliament passed a budget totalling $784.2 million pa'anga ($US331 million) for the financial year 2023-24.

It was passed unanimously 14-0 at the end of a long session at the Parliament in Nuku'alofa. The budget leaves a deficit of 27.2 million pa'anga - lower than last year's budget deficit of $38.1 million pa'anga.

The full details of the budget, such as the specific amount of allotted funds to each ministry, are yet to be publicly revealed, pending the release of the published budget report.

Minister of Finance and National Planning, Tiofilusi Tiueti, told Parliament the two ministries with the highest funding are Infrastructure and Finance (18 percent each). The Ministry of Education and Training receives 17 percent.

"They're spending all this money on recovery, on bringing us back to normal," said RNZ Pacific correspondent Kalafi Moala.

"That's why the (majority of) allocations in the budget estimate goes towards the Ministry of Infrastructure and the Ministry of Finance.

"They're going to spend alot of money on roads, repairs, and all of that which, of course, is the result of all the damages caused by the eruption last year."

During the budget discussion, Tiofilusi Tiueti revealed that 53.5 percent ($419.5 million pa'anga) is recurrent - dedicated to the everyday running of Government services.

Over 46.5 percent ($364.7 million pa'anga) of the budget is funded by foreign donors, and covers entirely all of the Tonga Government's development projects. The majority of donor support is in-kind 74.6 percent ($268.4 million) amount.

Funds for loan repayments total $67.1 million, with most being loans belonging to China.

The theme of the budget is "Partnership for greater resilience and sustainability to restore inclusive growth."

Pre-covid, in 2019, Tonga's budget credited 48 percent of it's funds to foreign donors.