Jitters as budget hour arrives

The Tautua Party’s Shadow Minister of Finance, Afualo Dr. Wood Salele, says the Budget set to be tabled in Parliament today will be a ghost of former Finance Minister, Faumuina Tiatia Liuga.

Although Prime Minister, Tuilaepa Sa’ilele Malielegaoi, has taken over the portfolio, Afualo, who is an economist by profession, says much of the financial forecast would have been finalised before Faumuina resigned.

During an interview with the Samoa Observer yesterday, Afualo claimed that by the time Faumuina stepped down from Cabinet in April, the Budget for the Financial Year 2014-2015 would have been in its final draft stages.

Asked whether Samoa would spend the next year saddled under a Budget that has, for the most part, been designed by Faumuina, which therefore would signal little change going forward, Afualo responded that that was his “gut feeling”.

“The Prime Minister just took over the portfolio,” he said. “Nothing much will change because Faumuina was there towards the end. I can’t see any dramatic changes than what was already prepared for.

“So we will just have to live with it.”

Afualo said Faumuina would have done most of the work.

“(The) Treasury and the other ministries have been working on this so nothing much has changed even towards the last minute,” he said.

“If there was ever was going to be a significant change, then it would have a major reorganisation of the budget but you cannot do that in a month."

“So I guess that was also one of the reasons why the P.M. was optimistic about him taking over the portfolio, because the budget was virtually done.”

In regards to the type of budget he thinks will be delivered, the Shadow Minister said the Budget is really only a forecast based on how much revenue the Government and its Ministries collect.

“Given the last three or four years we have not seen an increase in revenue collection,” he said.

“One thing is to be optimistic and another thing is to be realistic. You have to be a realist so your projections are based on the current and past outcomes (of other Budgets).”

Talking about the type of Budget Tuliepa will deliver to Parliament, he believes that the new Finance Minister will predict estimates that are beyond what is expected of the revenue.

“And then you will have to look at how are we going to collect those (funds),” he said. “Because when you have a budget that is beyond what is expected, it will offset the development of the nation."

“And then we will end up owing so much and then the debt will be piling up so you have to be very careful about that too."

“Unless the Government is going to be able to secure more grants, because that would only be a life saver, it is not looking good."

“Sooner or later, the generosity of our friends will probably run out if we cannot put the money to good use."

“We have to be realist with the way we look at things.”

Despite this, Afualo said while he cannot foresee any tax increases to be contained within the Budget, there could very well be given Samoa’s high debt distress.

“We are probably one of the most heavily taxed in the region and it is really sad,” he said.

“To see that we have a very small economy a very small private sector. We also have to make sure that they grow and give them that space to grow."

“We really need to make sure that we really look and revisit the taxation system that we have. How can we expect the private sector to function to its maximum capacity if they are being constrained by what we have?”

He said if the private sector is not allowed to breath, then Samoa as a nation cannot create wealth or employment.

“We would like to see more and more jobs, but at the moment there are very few jobs being created,” said Afualo. “And then we ask why, why and then we have to look at the policies."

“I strongly believe that the way the Government is handling and implementing its policies this is not the way forward for us.”

“But if they are going to increase the revenue or the direct tax, through G.S.T. that is the only avenue that I could see the Government increasing if they ever wanted to."

“Because even now the private sector is hurting a lot.”

He said instead the Government should look to the State Owned Enterprises to fill the gaps in the revenue collection.

“My concern there is too much emphasis on the Ministry of Revenue and I feel for that because they are doing the best that they can,” he said.

“But what we need to make sure is that whatever is left that is a gap that has to be filled by the contributions from S.O.E.s."

“But they are not living up to that. For years and years the S.O.E.s have not lived up to the commitment where seven per cent of their income has to come into the Budget, that has not been the case."

“So if those S.O.E.s were managed according to financial situation that we are now facing and managed well, then the Budget will be in a good shape too.”

In regards to where he thinks the money will be spent, he said it would most likely be diverted to the sectors that are supporting the hosting of the upcoming Small Island Developing States Conference (S.I.D.S.).

“If there are any significant changes then those would be from the sectors that are contributing to the hosting of the S.I.D.S.,” he said.

“All the sectors that provide the services for the S.I.D.S."

“It is only three months away but this is a major event it is probably the most significant event that has ever taken place here."

“So we need to make sure that all the resources are available to us are going to making sure this is a success because this is not just for the Government it is for all of us.”

He said if it were his budget the areas of Health and Education would take priority.

“I would like to see more “I would like to see more money going into education and health,” he said.

“For education I would like to see more because we are not doing enough."

“There is so much potential in these two sectors that we have not experienced that yet."

“So we need to put more in that then we look around to the infrastructure and services."

“Those would be other that would give the priority to because they create jobs the services and the infrastructure."

“(So I would) ensure that education and health will get the priority but at the same time we also need to divert whatever resources are available to make sure S.I.D.S. is successful.”

But Afualo retains some optimism going into the House today.

“Let’s hope that the budget will be something flashy for us,” he said.

“What I mean by flashy, something that sparks the creation of wealth. But what I actually want to see is a functional budget.”