Tuvalu News

PM Ielemia not worried about one-seat majority
Island Business

This month’s budgetary session in parliament is going to be stormy and the new man at the helm, Prime Minister Apisai Ielemia, is ready for the fight.

Since he came into office after the August general election, Ielemia has introduced austere financial measures such as freezing MPs’ entertainment and motorcycle allowances.

Apisai Ielemia... freezing entertainment and motorcycle allowances for members of parliament.
The man who began his career in government in the treasury department cannot wait to take on the opposition. He knows where his fingers will be pointing.

“Those who are affected especially in the opposition are complaining,” Ielemia told magazine.

“Already they’ve written a letter to the Speaker complaining about the freezing of their entitlements. I’m sure that is going to be one of the hot issues raised in our budget session.

“We will tell them and we will tell the nation why we are doing it and I’m sure the nation will side with us.

“We will just point a finger at them and say it’s your doing, you did this and we are now trying to correct what you had done.”

Tuvalu’s PM stressed that parliamentary entitlements have not been stopped, simply frozen until the government’s financial position improves.

After exhausting its overdraft facility with the island’s state bank, Ielemia said parliamentarians including cabinet ministers had to feel the pinch like all other employees of the state.

“Under entertainment, members of parliament are allowed to provide entertainment to whoever they want to invite in restaurants or at their homes.

“Now all those entitlements have been frozen. Also we are tightening up on civil servants’ leave days and attendance at work.

“Already we are putting in place attendance registers that will carry a cut-off time in the morning and late comers will have their salaries deducted accordingly.

“At the same time, we have been asking for extra money from overseas.”

Allies like Taiwan have been first off the mark, said PM Ielemia. Taipei immediately dispatched A$2 million to alleviate the island’s cash flow problems and is promising increased aid for the 2007 financial year.

Similar pledges have also come from Japan, and Australia and New Zealand.

The problem, according to Tuvalu’s new leader, has been a combination of falling revenue and overspending by the previous government of Maatia Toafa.

“We are not collecting revenue that we should be collecting and the collection points are not doing their jobs properly.

“On the other hand, the ministers of the previous governments have been spending too much money, travelling overseas, encouraging civil servants to do likewise.”

Ban on overseas travel unless fully paid by a donor is still in place and is applied across the board for all government workers and cabinet ministers included.

By late October, tax owed to the state reached A$600,000 and the new government had formed an Inland Revenue Unit within treasury to crackdown on defaulters.

“Duties used to be collected by Customs while personal taxes were collected by Treasury in the past, so all these were scattered.

“Now they will be coordinated under this new unit which has been tasked to collect what people and companies owe.

“They have a long list in collecting arrears, setting guidelines, and they have been authorised by cabinet to take defaulters to court.

“On the other side, we are controlling our spending and collecting arrears plus our endeavours to seek extra funds from overseas like Taiwan, Australia, New Zealand and Japan.

“I will be talking to the Japanese ambassador shortly and it’s all part of our endeavour to ask for more money to directly assist our budget as a budgetary grant.”
Foreign aid for Tuvalu, according to the Asian Development Bank 2006 Outlook, was estimated at A$8 million this year.

“While fiscal prudence is of paramount importance to financial stability, a TTF (Tuvalu Trust Fund) automatic distribution of A$11.4 million for 2006 provides a comfortable cushion to finance the deficit,” the Asian Development Bank said.

It estimated fiscal deficit at A$2.9 million, equivalent to 9.3% of the island’s GDP.

For driving such tough and merciless austerity measures, isn’t the prime minister wary of a political backlash that could see the evaporation of his one-seat majority in parliament?

“I always try my best to keep us together by having caucus meetings, and we’ve been having almost daily cabinet meetings to sort out things we think should be corrected and new policies put in place.

“From those cabinet meetings and regular caucus, we will be able to strengthen our team. Even though we have only one majority, I feel we are solid.”

Currently, PM Ielemia is studying a proposal by Fiji’s international carrier Air Pacific through its subsidiary Pacific Sun to fly to Tuvalu. Promising cheaper fares and reliable services, the application has put the Tuvalu Government in a bind since it holds majority shares with the current air services provider, Air Fiji.

“Of course, the decision lies with the government of Tuvalu, and we have the right to state what we want.

“But we have to consult, it’s always good to consult with the airline that we hold shares in, Air Fiji.

“It’s always good to consult with them and see what they think. May be Pacific Sun can fly to Tuvalu once a week or twice a week, and Air Fiji can do the same, and in that way we will satisfy everybody.”


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