Premier Tagelagi table Budget Estimates with a $2.5 million deficit

On an historic day at the Fono Ekepule today, Premier Dalton Tagelagi tabled the government’s Annual Appropriations 2022/2023 Bill in the last sitting of the Niue Legislative Assembly at the original Fale Fono.

Standing in for the Minister of Finance Crossley Tatui who is in isolation after returning from a meeting in Japan earlier this week, Premier Tagelagi tabled this last budget in his first three-year term as premier, before the general elections next.

The $2.5 million deficit budget will be the last budget before the general elections next year. In his Budget statement Premier Tagelagi said “Overall, the budget promotes our health and economic resilience response to the global pandemic and external economic shocks protecting the lives and the livelihood of the Niue people and fostering recovery responses. National security and Climate Change remain our top priorities because of our fragile population.”

In an unusual but bold move, Premier Tagelagi revealed the actual budget deficit of $12.7 million dollars which is the true reflection of the government’s recurrent budget without the New Zealand government’s annual budget support of more than $10 million.

“This budget is a realistic budget and has a deficit of $12.7million. The past 2 budgets have also been deficit budgets and this is mainly due to the major decrease in government revenue and overall economic activity on the island.

“This realistic budget is set on the foundation of genuine commitment to whole of government reforms to ensure we maintain inclusive development, sound leadership, work productivity, quality infrastructure, boost agricultural and export activities, apply environment and ocean conservation, communication enhancement and digital transformation goals are achieved.”

“The estimated budget deficit of $12.7 mil is anticipated to reduce over time but with current stringent measures in place and broad revenue generation are key to assist the deficit position.

Increased costs in this year’s budget contributes to:
• Fuel Price increase globally, this has affected government services that relies heavily on fuel.
• Freight Costs increase globally affecting all imports that comes into the island correlating directly
to increase cost of living due to rise in price of goods & commodities.
• Increased personnel costs – short of staff across government to deliver services efficiently; and
support youth employment to ensure retention of young people on island.

“Noting that government charge out rates for services that relied on fuel has not increased to compensate for costs incurred recently hence government maintaining support to the people of Niue in subsidizing the costs.”

Premier Tagelagi explained that the deficit is necessary to ensure the continuing operations of the government in delivering goods and services to the public.

Traditionally the largest portion of the government’s annual budget of around 80 percent is for the salaries and wages of the public servants. The remaining twenty percent is to cover the general operational costs of government services such as the welfare payments, funding for free education and healthcare.

The draft estimates of the Appropriation Bill is now with the Fono Ekepule’s Public Accounts Committee who will hold meetings with all government agencies over the next few weeks before it is taken back to the Fono Ekepule for the final reading.

BCN News will continue to provide coverage over the budget over the coming weeks.

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