Budget Paper 1 reviews the economic development and medium term economic forecast for the Tongan economy. During financial year 2009/10, the Tongan economy experienced the full extent of the Global Economic Crisis (GEC), which started around September 2008. The Ministry of Finance and National Planning projected a positive growth of 0.4% for 2008/09 but the actual result was a contraction of 0.4%. Remittances declined further than expected which reduced incomes and hindered growth.

Lolotonga ‘a e ta’u fakapa’anga 2008/2009, na’e hokohoko atu ‘a hono tukuatu ‘e he Pule’anga ha patiseti ‘oku fakataumu’a ke kei tupulaki ‘a e tupu faka‘ekonomika ‘a e fonua. ‘i hono ngaue’aki e ngaahi tu’utu’uni ngaue fakapa’anga ‘oku fakapotopoto pea mo fakamalohi’i hono tauhi ‘o e ngaahi tu’utu’uni fakapa’angá. Na’e to e malava lelei ai pe ke to e tupu

During the 2008/09 financial year, the Government continued to deliver a Budget that focused on further developing the Kingdom’s economic growth using prudent fiscal and appropriate monetary policies. The Kingdom was therefore successfully steered to another year of positive economic growth. However, we’re facing a situation of globally economic downturn which has indirectly impacted our economy. Remittances have declined, thus putting further pressure on growth, and ultimately impacted on Tongan families due to limited income available to cover daily necessities.

The person delivering the Budget this year has changed, but I would like to reassure Honourable Members that, while there are changes in emphasis and priorities, the broad policies underlying the budget are not greatly changed. The government remains committed to the development policies set out in the Eighth Strategic Development Plan. The present budget covers the final year of the period of

‘I he māhina ‘e tahaua kuohili´, na’e tukuatu ‘e he Pule’anga´ ha patiseti na’e fakataumu’a ke hakeaki’i e tu’unga faka’ekonōmika ‘a e fonua´ ‘aki hano ngāue’aki ha ngaahi tu’utu’uni ngāue ki he pa’anga hūmai´ mo e fakamole ‘a e Pule’anga´ (fiscal policies) ‘oku taau´. Na’e ‘i ai e tāketi ‘e laka-lakai-monū ‘a e fonua´ ‘i he 2007/08´, koe’uhi´ na’e ‘osi fokotu’u ‘e he Pule’anga´ ‘a e ngaahi founga totonu ke fakahoko ‘aki e ngaahi tu’utu’uni ngāue ke tupulaki ‘a e ‘ekonōmika´.

Twelve months ago, the Government delivered a budget that focused on the Kingdom’s economic survival using appropriate fiscal policies. The Kingdom was on target for a prosperous 2007/08 because the Government had put in place the right policy instruments to drive economic growth. However, twelve months later, we are again facing the same situation due to the events of 16 November 2006

‘I he ngaahi patiseti kuo hili´, ‘i ha ‘ātakai ‘oku feliuliuaki, kuo u ‘osi fakamamafa’i ai ‘a e tukupā ta’eliliu ‘a e pule’anga´ ki he’ene vīsone ki he fakalakalaka fakasōsiale mo e faka’ekonōmika, ‘o hange ko ia ‘oku hā ‘i he’etau Palani Fakalakalaka´.

In a number of Budgets, in changing circumstances, I have emphasized the government’s unchanging commitment to the vision of social and economic development contained in our country’s Strategic Development Plans. This is still the vision: “To create a society in which all Tongans enjoy higher living standards and a better quality of life through good governance, equitable and environmentally sustainable private sector-led economic growth, improved education and health standards, and cultural development.”

‘I he fakamatala Patiseti ‘o e ta’u ni, ‘oku ou fakaha ai ‘a e ngaahi founga ‘oku hoko atu ki ai e fakalelei ngaue ‘oku lolotonga fakahoko ‘e he pule’anga, pea fakaha ai foki mo e ngaahi taketi fo’ou ki he ta’u. ‘Oku fiema’u ke potupotutatau pea mo hu’ufataha ‘a e tokanga ke ngaue’aki ke matu’uaki ‘a e ngaahi palopalema fakatu’apule’anga pea pehe ki he ngaahi faingata’a fakalotofonua, kae malava ke a’usia ‘etau visone ki he kaha’u – ‘a e ngaahi taumu’a fakasosiale pea mo faka’ekonomika.

In this year’s Budget statement, I outline the next steps in our continuing reforms, and announce new targeted measures. Both consistency and focus must be applied to overcome global uncertainty and local difficulties, and to achieve our vision – our long-term social and economic goals. The setting for this year’s budget is that our challenges have multiplied, but our people’s needs have also continued to increase: the needs of our young people, our elders, families on very low incomes – and especially our people on the outer islands. We cannot, and will not, ignore those needs.