Issue No. 11/2020 – Friday, 18 December 2020 (Kitiona Tausi)
On Major Policy and Expenditure Measures and under Key Infrastructure, Government commits to investing
in the introduction of domestic Air Services as part of Government’s vision to improve accessibility between islands and involves compensation for land lease for the development of all airstrips in the outer islands as part of Te Kete’s priorities to provide effective transport services between islands.
Work will also commence to eventually offer international air services as well. This will cushion the very high fares currently experienced by Tuvaluans with present Air services providers while at the same time boost economic development in outer islands.
The current projects funded by ADB and the World Bank on improving outer island maritime infrastructure remains an impportant part of Government’s committment to better transportation systems including the arrival of our new LCT Barge.
Government has provided $2.2 million through Kacific Broadband Satellite Group or ka-band to strengthen internet connectivity on Funafuti and all outer islands. The service is for e-learning services for schools, Kaupule and health.
On Funancial Management, an additional injection of funds of $1 million each into the Tubvalu Survival Fund and the Tuvau Trust Fund. This is to continue our resilience to schocks and crises such as Climate Chaneg and disasters.
Government has also committed $400,000 towards the establishment of a National Insurance service provider, giving both the Government and private citizens the opportunity to transfer and minimize their personal risks of loss from disasters and other causes. Government realizes that when disaster hit, both government and individulas suffer great loss and the only means of redress is through Government assistance.
Government is completing the signing of new lease agreements for all governmmebt leased land in the country. This bring certainity to the Government and anyone wanting to invest in Tuvalu. The new rates are categorized according to the zoning system for urban commercial and non-commercial areas which is $7,500 and $6,000 per acre per year, respectively. For Rural commercial and non-commercial areas, it is $5,000 and $4,500 per acre per year, respectively.
As for Revenues, the total domestic revenue for 2021 is estimated to be $54.1 million and domestic non-recurrent revenue is xpected to be $19.4 million which will bring a grand total of $73.5 million in domestc revenue. These domestic sources of revenue include the various Government taxes like income tax, Tuvalu Consumption Tax (TCT), Customs duty on imports and other taxes and levies.
The largest source of revenue continues to be Fisheries through fishing licenses, the sale of the FV Taumoana amountig to $10.4 million and the shift in modality from Joint Ventures to an aternative arrangements involving magement fees for flagged vessels will contribute an estimated $52 million to the 2021 budget. Of this amount ($52 milliion), $33 million is projected to be recurrent with $19 million non-recurrent. An expected revenue of $8.2 million is from our internet domai dot.tv.
The level of government financial reserves total $74.7 million, that consists of the Consolidated Investment Fund (CIF) with $36.7 million, Tuvalu Survival Fund at $9.3 millon, Special Infrastruture Fund at $11.3 million and the Tuvalu Development Fund at $17.5 million. It is worth noting that the current CIF balance still exceeds the target minimum balance of $29.7 million, equivalent to 16% of the Tuvalu Trust Fund maitained value. The total financial Assets not include in the Reserves total $218.2 milliom, made up of the Tuvalu Trust Fund at $185.6 million and $32.5 million for the Falekaupule Trust Fund.
$34.6 millon will continue to be received for the general budget support by development partners linked to Policy Reform Matrix (PRM). Hon Paeniu also acknowledged the continuig budget support from the Repubic of China on Taiwan totaling to $9.2 million, as well as other partners incuding the World Bank, Asian Development Bank, European Union and of course our Bilateral partners Australia and New Zealand.
The Government will continue to support the Policy Reforms under this program with greater emphasis on Public Financial Management (PFM) and other key policy reforms. It is important that the Government implement reform measures of one-off Special Development Expendituresnt implement reform measures to ensure fiscal prudence and sustainability. General budget support enables the implementation to ensure fiscal prudence and sustainability. General budget support enables the implementation of one-off Special Development Expenditures (SDEs) and Special Infrastructure (SI).
On Development Fund Estimates, Hon Paeniu revealed that all othe projects and program initiatives which are funded by our development partners, including proposed projects to be funded by donors, are contained in the Development Fund Estimates for which there is a separate motion seeking Parliament’s approval for it.
Continuing with the theme of resilience, the Government has started consultation with outer islands on the construction of concrete pulaka pits to avoid propblem of saline infiltration into the pulaka crops during king tides and storm surges. This should also ensure continued food security for our people during dissficult times.
Assistance received in the wake of TC Tino earlier this year has also been used to procure a 300,000 litres per day desalination plant for Funafuti. This will ensure water security in times of droughts or other disasters. Similarly, portable desalination plants are also being procured for the outer islands.
The government is in the process of procuring dredging machinery to help protect our coastal areas in response to the impacts on our foreshores witnessed during TC Tino and previous cyclones.
The Government also acknowledges the continuing disaster financing support from the ADB and the World Bank through their Disaster Financing mechanisms with US$4 million from the ADB’s Disaster Risk Facility and US$7.5 million through the World Bank’s Catastrophic Deferred Drawdown option (CAT DDC).
Tuvalu continues to benefit from our major international financial institutions’ projects including Water and Sanitation and on Renewable Energy, (US$13 million and US$9 million respectively) amongst others.
Further, Government has started laying the foundations for a comprehensive project to be pitched to the Green Climate Fund and other Climate Financing facilities for the development of a Climate proof housing project for all of Tuvalu. We have seen that during storm surges and cyclones that the types of housing now being constructed through the Nukulaelae project provides far greater security and protection for the people.