NATIONAL PARLIAMENT OF
DAILY HANSARD
THIRD MEETING – EIGHTH SESSION
The Speaker, Rt Hon Sir Peter
Kenilorea took the Chair at
Prayers
ATTENDANCE
At prayers, all were present with the exception of the
Ministers for Department of Commerce, Industries & Employment, Public
Service , Mines & Energy,
Communication, Aviation & Meteorology, Provincial Government &
Constituency Development and the members for West New Georgia /Vona Vona, West
Guadalcanal, West Honiara, Small Malaita,
East Are Are, North West Choiseul, South Vella La Vella and North Guadalcanal .
ADMINISTRATION OF OATH
PRESENTATION OF REPORT
QUESTIONS AND ANSWERS
11. Mr RIUMANA to the Minister for Education and Human Resources Development: What is the government’s policy on
scholarship training?
Hon SIKUA: Mr Speaker, I would like to thank the Member
for Hograno/Kia/Havulei for his question.
The Government’s policy on scholarship training is such that scholarship
awards are given to all Solomon Islanders eligible for such scholarships on two
categories, either at the pre-service level or at the in-service level.
Mr Speaker, at the pre-service level,
the eligible criteria is that all Solomon Islanders who reach Form 7 in our education
system are eligible to apply for pre-service scholarship for tertiary training
in universities or tertiary institutions in-country or throughout the region.
The eligible criteria for such is for the candidate to
obtain a Grade Point Average or GPA of 3.0 and above for face to face
instruction at any overseas institution.
Those who attain a GPA of 2.5 and 2.9 are given the opportunity to
undertake courses through Distance and Flexible Learning at the USP Centre here
in
At
the in-service level Mr Speaker, applicants for in-service training are
assessed by the Department of Public Service in the case of public servants,
and the Department of Commerce in the case of application from the private
sector, and the Ministry of Education in the case of serving teachers.
Mr Riumana: Mr
Speaker, I understand there are about 400 officers in the public sector that
have reached compulsory retirement age.
Does the Ministry any plans to train any profession field so that there
is adequate human resource to replace those reaching retirement age?
Hon Sikua: Mr Speaker, as of last year we had 860
Solomon Islanders in training in various institutions overseas as well as
locally. These are the people earmarked
to replace those who are leaving the Public Service or even the Private Sector.
Mr LONAMEI: Mr Speaker, there are some students who have
received acceptance letters from the
Hon Sikua: Mr Speaker, acceptance at any university does
not necessarily qualify you for a scholarship from the government. Any university Mr Speaker, as long as you
have a GPA of 2.5 and above, that is average, can accept you but it does not
necessarily qualify you for a scholarship from the government.
The
normal process is that you have to apply for sponsorship before you get a
scholarship from the government and not necessarily an admission approval from
any university or the University of the South Pacific for that matter because
they can accept you because they need the money. They will need as many people as possible to
go to the university but we have to decide on applications depending on our
affordability.
Mr Riumana: Mr Speaker, in terms of the neutrality and
independency of the National Training Unit, are there any criteria set up to
properly and fairly distribute scholarships to beneficiaries?
Hon Sikua: Mr Speaker, the National Training Unit does
not decide on scholarships. The National
Training Unit within my Ministry is only an administrative arm of the National
Training Committee. The National
Training Committee is made up of people from a wide section of the society,
which is the Public Service, the Chamber of Commerce, the Women, the Ministry
itself.
In
terms of deciding on who gets a scholarship, it is a decision by the National
Training Committee and not the National Training Unit, which is only an
administrative or secretariat of the National Training Committee.
Mr
KEMAKEZA: Mr Speaker, I might
misquote the Minister’s first answer but is it true that the present government
has reduced scholarship awards as of 2007 and onwards?
Hon Sikua: Mr Speaker, no. The present government does not reduced
scholarships in 2007. Work is still in
progress and we have not yet released the awards for 2007.
At
the moment, Mr Speaker, the number I have is 217, which is more than last year
which was 130. So the number is still to
be decided. But as of now, 217 is what I
have in the list as opposed to only 130 last year. So it is not a cut, Mr Speaker, in fact it is
an increase.
Mr
HILLY: Mr Speaker, does the
government have adequate resources to be able to provide scholarship to
everyone who is qualified and eligible for scholarship? If not, what percentage is qualified and
eligible but because of resources you are unable to send them.
My
first question is does the government adequate resources to be able to provide
scholarships to everyone who is eligible and qualified? The second part of my question is, if the
answer is no, then what percentage although are qualified but because of
inadequate resources are not given scholarships?
Hon Sikua: Mr Speaker, if you are referring to people
that qualify in terms of pre-service application, 85 Arts students who have a
GPA of 3.0 or better and 81 Science Students that have a GPA of 3.0 or better are
going to be awarded scholarships. That
is a total of 168 students that have performed very well and so I am awarding
them scholarship and that is 100%.
Mr FONO: Mr Speaker, there are allegations that
students scoring less than the aggregate 3 are also awarded scholarships. In order to be in line with transparency can
the Minister provide the list of these168 students with their aggregate scores? Why not publish it in the media too like secondary
school results so that it rules out the allegation that the National Training
Council has been accused of awarding scholarship to students they are related
to.
Mr KAUA: Point of order. The Leader of the Opposition is making
allegations. Can he substantiate and
prove these allegations?
Mr Fono:
Mr Speaker, there was a petition signed by students in USP. I have a copy of that petition. If the Deputy Prime Minister wants it I can
photocopy it and pass it in this House.
But I have written to the good Prime Minister, copied to the Minister of
Education to address this situation.
What I am simply asking is the Minister to publish the
results of students who have aggregates of 3 and up who have been awarded
scholarships in order to uphold the principle of transparency Mr Speaker.
What
I need is for the Minister to assure the House that these results will be
published and distributed to Members of Parliament?
Hon
Sikua: Mr Speaker, like I said work
is still in progress. I will have the
final lists for 2.5 to 2.9 and 3.0 and above.
Hopefully by Friday my staff will contact the University to give us the results
and when the list is finalized I can make it available and will be published in
the newspaper.
Sir Kemakeza: Mr Speaker, I think the Minister did not clarify the
point of the questioner. It is a very
valid point that usually creates problems. That point was also raised in one of the Guadalcanal
Leaders meeting that the percentage allocation of scholarship to each province
looking at population or whatever criteria the National Training Committee has
is not fair. I think that is a valid for
any government to take into account.
Mr Speaker: I suppose that is just a comment.
Hon Sikua: Mr Speaker, clearly a crucial policy of this
government is to strike provincial equity on the award of scholarships. That is the exercise going on at the
moment.
I
have with me the list of those who are currently on scholarships, and of course
once the list is finalized for the new ones, then I can make this list available
to Members of Parliament. There are many
more Isabel people included in the list than those of us from
Mr Zama: Mr Speaker, all parents in this country would
want their child/children to be trained or given the opportunity to be awarded
a scholarship.
Mr
Speaker, it is evident that
The
costs involved in this kind of arrangement is quite beyond and we know that
whilst we would want scholarship training for every children throughout the
country, the majority are always unable to access that privilege.
What
is the Department doing about this apparent slackness on the part of students
who have not may be abused that privilege in not seriously taking up their courses?
Hon Sikua: Mr Speaker, the University is providing
courses through extension at the University through the request of the Government
of Fiji. At the last
Sir Kemakeza: Mr Speaker, looking at the required manpower
and in relation to the answer given by the Minister in the planning of our human
resources, could the government look into this very important point where there
are more qualified people in one sector than the other sectors. Is the government looking into this very
important point especially when the country is running out of qualified people
in other areas that are urgently required by the country?
Hon Sikua: Mr Speaker, with the assistance of the World Bank,
the Ministry has just completed a national skills survey that tells us what
areas we already have enough people in it and what areas we do not enough yet. The selection of awards, as of this year and
onwards will be based on this national skill survey. Our national training policy will be influenced
by the findings of this national skill survey that we have just completed.
Yes,
Mr Speaker, the government has got on to that problem.
Mr Sitai: Could it be possible for the government or
the Ministry to adjust its policy of looking into our manpower requirements on
a province basis?
Yes,
pre-service training is accepted on aggregate scores that require entry into
the universities. In terms of in-service
training, in preparation for the responsibilities that will come in the proposed
state government system we surely will require manpower.
I am
raising this question, could it be possible for the Ministry to adjust its current
policy for purposes of future rather than concentrate too much on academic standards
and achievements in regards to in-service training. Why can’t we distribute scholarships fairly according
to provinces so that they prepare to take on responsibilities in the education
sector in the future?
Hon Sikua: Mr Speaker, that request is noted.
Mr TORA: Mr Speaker, I understand that there is a
quite a long list of our students who have been offered scholarships this year,
and a list is still pending. I just want
to ask my good Minister the latest position of this pending list.
Hon Sikua: Mr Speaker, I met with my staff yesterday,
and I asked them to come back tomorrow. And
then on the basis of what happens in tomorrow’s meeting, we will come back
again on Friday to finalizing the lists.
Hopefully, I am going to release the awards early next week.
Mr Fono: Mr Speaker, is the Minister aware that this delay
by the NTC in awarding scholarships based on aggregate of 3 and above could
cause us not having space in institutions like the USP and the UPNG?
Hon Sikua: Mr Speaker, I am fully aware of that. In fact I want to inform Parliament that for
Papua New Guinea Institutions we are very late.
But I am working with my Permanent Secretary and our colleagues in PNG
to be lenient with us so that our students can go to PNG. But we are really very late.
For
USP, the USP is our university, and I am sure they can give us special
consideration despite the fact that we are very late as well. So I am hopeful that we can at the end be in
a position to send all our students despite the very late arrangements.
Mr Tozaka: Mr Speaker, I gathered from the response of
the Honorable Minister that we have a manpower resource plan in place. In regards to students who are not successful
in completing their remaining courses, both in-service and pre-service, what is
the role of the Ministry to make sure these students or officers come back,
work and meet the manpower requirement of the government.
Hon Sikua: Mr Speaker, the role of my Ministry is for education
and training. The employment portfolio is
with the Ministry of Commerce, I think, and therefore probably the Minister of
Commerce can tell us what happens to those students when they come back. But we are also working closely with them and
the schools to inform interested parties that these are people coming out of
institutions and we are also giving out to students who are still overseas and
are graduating the opportunities that are available in the country. So we can only facilitate but the portfolio
of employment is with Commerce.
Sir Kemakeza: Mr Speaker, with
the courtesy of
Hon Sikua: Mr Speaker, yes, that arrangement is still ongoing
and that is why you will see in the development budget the amount of
$12.5million from the Government of Papua New Guinea to help our students study
in various institutions within
Mr Riumana: Mr Speaker, I wish to thank the hardworking
Minister of Education for the answers.
14. Mr
RIUMANA to the Minister for National
Planning and Aid Coordination: Can the
Minister inform Parliament if development partners are supportive of the rural
development plan of the Government?
Hon ABANA: Mr Speaker, I would like to take this time to
assure the House that yes, we have the support of development partners in the
rural development plan of the Government.
Sir Kemakeza: Mr Speaker, in relation to the answer given
by the Minister prior to drawing up of the 2007 development estimates, are there
any aid donors consultative meeting by the Department or the Minister before the
2007 development estimates is drawn?
That is if the answer is yes.
Hon Abana: Mr Speaker, there is a SIG donor consultative
meeting one week before this Parliament Meeting. We did not have any meetings last year but I
could carry you through some of the development partners’ recent support.
We have just signed a number
of projects with a number of donors this week.
There is support for peal farming by the EU, support for
Mr Speaker, a number of multi donor funded programs are
currently in the pipeline and will be concluded shortly. For example, the Provincial Government Support
Program jointly funded by the EU, the UNDP and AusAID or RAMSI and others
more.
Mr
Speaker, the total development funding for this year by donors is around $2.1million. This was an increase from last year which is
about $224million. This represents a 22% increase in donor funding.
Also
Mr Speaker, by sector funding, agriculture spending for 2006 was $26.4million
and 2007 funding was $52.6million, an increase of 99%. Forestry was $20.8million in 2006 and $28.2million
for 2007. All these are featured in the
development estimates. That is 36%
increase for 2007. For Infrastructure
last year was $155.8million and for this year 2007 was $210.8million, an
increase of 35%.
This
is a good indication of support from our donors to the development plans of the
Government.
Mr HUNIEHU: Mr Speaker, can the Minister explain to Parliament
as to why there was a big reduction in development aid in the recurrent budget
from the level of $300million in 2005 and appropriation bill 2006?
Mr Zama: Point of Order. I think we are going out of the question. This is questions and answers time.
The
Minister of National Planning, in my view, under Standing Orders should make his
own statement, not under question time and I think there shouldn’t be any
questions relating to that matter on the floor of Parliament because it is not
on the Order Paper today.
If
the Minister wants to make a statement on the Department then that must be
clearly stated on the Order Paper.
Sir Kemakeza: Point of Order. Mr Speaker, I think the MP for
Rendova/Tetepare must properly study his Standing Orders. This House deserves good answers from
Ministers. When Ministers give good
answers you will see me nodding my head indicating support. These things all complement each other and so
whether this is question time or the budget when the time comes questions will
also be raised.
I
think the question comes about because that is the focus and vision of this
government. And the Minister of
Education did very well. When it is in
the budget he said it.
I
think we should allow the Minister to give us good and clear information that
both sides, the backbenchers, and even the Member himself also asks
supplementary questions and so the House needs answers as well as the
public. The Parliament belongs to the
people of
Mr Speaker: As far as the Chair is concerned, my only
concern is that questions should not become a pretext for debate. Short supplementary questions can be raised
so that the Minister can respond.
Mr Huniehu: In view of the Minister’s response to the
question, I am simply posing the supplementary question that if development
partners are very helpful to our budget, can the Minister explain to this
honorable House as to why there was a reduction in development aid funds from
the level of 2004 and 2005 where the development aid budget was $300million to
now $188million.
Hon Abana: Mr Speaker, the honorable colleague must read
the budget estimates because I register an increase and not a decrease.
Mr Huniehu: Sorry, I did not hear the response from the
Minister. Can he speak a bit louder?
Hon Abana: Mr Speaker, I will repeat myself
clearly. I did not register a decrease
but an increase in the development budget.
Mr Huniehu: Mr Speaker, I just want an honest answer from
the Minister for this question. This question
is very precise. It is talking about
whether development partners are supportive of the rural development plan of
the government, and I am posing the question if they are, as the Minister has
answered the question, then why is that there is a drastic decrease in the
development budget from $300million from the levels of 2004- 2005 to just
$188million in this Appropriation Bill.
Mr Zama: Mr Speaker, I have noticed you to make a
matter of privilege. What I wish to
raise is that I think we have circumvented parliamentary processes on matters we
are not supposed to be raising now.
Mr Speaker: Standing Orders are quite clear. It is not a matter before the Parliament but
it is a matter that has been debated and questions asked and answered during
the current meeting that cannot be raised.
So it is not so much a matter before Parliament.
Hon Darcy: Mr Speaker, I am not really sure about the
question asked by the MP for East Are Are. But if you look at the budget from 2004
onwards, there has been a very strong donor support because of the slow pick up
in internal revenue. Now that the
internal revenue or government revenue has increased there has to be a
reduction in donor support. That is
probably why he has noted the concern he stated. But I can assure this House, and you will
note in the Speech that I will deliver very shortly, that there has been very
strong and overwhelming strength in our internal revenue. Thank you Mr Speaker.
Mr Fono: Can the Minister confirm whether some of the
projects he had read are ongoing projects?
They were projects negotiated by the last government. Projects like the peal farming and the Auki
market are ongoing projects. I initiated
those projects when I was Minister.
Can
he inform the Chamber of any new projects and not the projects of the previous
government which are ongoing ones? As
the saying goes, Mr Speaker, somebody kills a bird but another man eats
it. Somebody is just decorated with the
feathers of the bird. Can the Minister
inform the House of that?
Hon Abana: Mr Speaker, the question here is the support
of donors to the government. If these
projects have been through the previous government and donors of the day are
not supporting it, they could have withdrawn these projects. But the fact that we have signed shows their
overwhelming support to the government of the day.
Mr Riumana: Mr Speaker, thank you and I thank the
Minister of Planning for the answers.
Mr Speaker: I received a note this morning that the
Chairman of the Public Accounts Committee would like to make a point of
privilege, and as such we have to first suspend Standing Order 25(1) in order
for this to be possible.
Standing Order 25(1) under Standing
Order 81 to enable the Chairman of the PAC makes his point of privilege
Mr
Mr
Speaker, 2007 has been a historical year for the Public Accounts Committee. It is a year that must go down in the records
of Parliament because it is the first time the Committee was able to sit and
deliberate on the budget before the Parliament actually debates the
budget. Also it is the first time too
the Committee has produced its report for Members, this has just been
distributed to each of the Members yesterday afternoon.
I
wish to raise as the Chairman that this is also the first time that the Committee’s
deliberations and proceedings were televised as part of the process of
strengthening parliamentary standing committees, which made the deliberations
public.
Mr Speaker, on that note I have also cautioned
members of the Committee under Standing Orders 69 and 74 that whilst the
proceedings or deliberations of the Committee are made public, it is in my view
not proper under Standing Orders 74 make publications prematurely.
Yesterday,
Mr Speaker, on the front page of the Solomon Star appeared a report that was
presented to the Committee. In my view,
that is a gross and serious breach of Standing Order 74 which I would like to
seek your ruling on.
Mr
Speaker, on that note I wish to categorically state on the floor of Parliament
that what appeared on the front page of the Solomon Star yesterday does not
come from the Chairman of the Committee as official and may be not also from
the secretariat of the Committee.
I
therefore, Mr Speaker, wish to draw the attention of Members of Parliament to
Standing Order 74 which states that “the evidence taken before any Select or Special
Committee and documents presented to or a report prepared by such committee
shall not be published by member thereof or by any other person before such
time as the committee shall have presented its report to Parliament or the
Minister has tabled the report as the case may be”.
Mr
Speaker, I therefore wish to raise here that I believe we have circumvented a
lot of parliamentary processes, and especially when Standing Order 74 is very
clear on this matter.
Mr Speaker, if what appeared on the Solomon Star
yesterday comes from the Committee or may be other members of the Committee, then
may be the honorable Leader of Opposition could make explanation that he may
have done that not as a member of the Committee but may be in his position as
the Official Leader of the Opposition.
In my view, Mr Speaker, he stands accused of a very
serious violation of one of the cardinal principles of our parliamentary bible. Such conduct is indefensible under his
ascended right to the freedom of expression guaranteed by section 12(1) of the Constitution.
Standing
Order 74 is a law which qualifies the right under section 12(2)(b) by expressly
preventing the prior disclosure of such information and therefore make the
prerequisite ruling to uphold the sanctity of Standing Order 74 and take a
proper remedial and disciplinary action against the Leader of the Opposition. Thank you, Mr Speaker.
(applause)
Mr Speaker: Do you want to proceed through Standing Order
25 because I accept the points raised as truly matters of privilege of the
House has been breached, and if the House wants to participate in contributing
to the concern, a motion can be moved so that the House can participate. But if we heard from the honorable Member the
concern expressed and we leave it at that, then it is not a real concern. Except only to say that with the current
situation of transparency that has been exercised by the various Standing
Committees, it is their responsibility to actually tell the media what is not
to be released from their meetings when the media is around them because we are
not responsible for the media outside of Parliament.
Unless
the House wishes to simply accept the concern so that we take note of it for
future purposes, I suppose we do not need to go to part 4 of Standing Order
25. We do not need to raise a general
motion so that everyone else can participate on this issue.
Mr Haomae: In line with Standing Order 25, I would like
to move a motion.
Mr Speaker: What would your motion be honorable Member for
Small Malaita?
Mr Haomae: My motion is that the proceedings of the
Standing Committees be open to the public and broadcast on the SIBC.
Mr Speaker: It has to be in relation to the concern of
the Chairman because his concern is that Standing Orders 74 has been breached
because a report to the Committee has been publicized prematurely. So a motion to stop that process might be
much more relevant to the concern raised by the Chairman. O if not, if the House wishes to say let it be
opened to the media then that is for the House to decide on.
Hon Darcy: Mr Speaker, I would like to thank the
Chairman of the Public Accounts Committee for raising this very valid point. As you have rightly pointed out it is part of
the fact that Parliamentary Standing Committees have their own privileges in
the way they handle information that is supplied to them.
I
quite agree with you and I am sure the government backbench fully agree with
the view you hold that those information has to be handled carefully,
sensitively and in a responsible way.
On behalf of the Government, as it is a matter that
relates to the Public Accounts Committee, the Government takes note of the
concern raised by the Chairman of the
Mr Speaker: Mr Chairman, the Government has taken note of
your concern raised and we shall leave it at that.
Mr Kemakeza: Can I take the responsibility under Standing
Order 25(4) to move a motion to be debated.
Mr Speaker: The motion would certainly be that no
premature report of Standing Committee deliberations should be publicized. That would be much more along the concern of
the honorable Member.
Hon Oti: Point of Order! I thought you have made the ruling, unless
you rescind your previous ruling and then we redirect the motion.
Mr Speaker: I thought that the government did not feel
that we need to discuss it further because it is being brought to the notice
for our concern and I think the Minister’s advice is true.
All
Standing Committees, please be responsible for information coming out from your
committees whether or not you would like to withhold certain information to be
publicized. I think the onus is on you
to advise the media rather than here.
I
rule that we dispose off this issue. We
have received the concern of the Chairman and the government accepts the
concern and we leave it at that.
Mr Kemakeza: Point of Order Mr Speaker, I am subjected to your
ruling. I respect the position of the
government. The fact that the mover
especially mentioned the Leader of Opposition is unfair on the Leader of
Opposition not to defend his position.
If
he did not mention the Leader of Opposition then I concur with the government
side. But the fact is that the Leader of
Opposition has been mentioned, and therefore I think we should give an opportunity
to the Leader of Opposition to clarify his side so that the Chairman is
satisfied with his doubt. But this is
subject to your ruling.
Mr Speaker: That is a real concern but I have made my
ruling that we dispose off the issue as has been decided and we will move
on. Thank you very much indeed.
BILLS
Bills – Second Reading
The 2007 Appropriation Bill 2007
Hon DARCY: Mr Speaker, I rise to beg that the 2007
Appropriation Bill 2007 be now put to the second reading.
Mr Speaker, I am honored and privileged to present this
House with the 2007 Appropriation Bill 2007 on behalf of the Grand Coalition
for Change Government in accordance with Section 102 of the National
Constitution of Solomon Islands.
Sir, this is the first full year Budget presented by this
Government and the first I have presented.
It represents our first step towards implementing our policies and
mandate on behalf of the people of
Mr Speaker, this Government is aiming to create a society
that is equitable, trustworthy and forward-looking. We are committed to strengthening the
country’s democratic, constitutional, and community institutions and structures
as well as its economy.
The Budget is a fundamental instrument of Government
policy in action and its development is a task this Government has taken very
seriously.
Sir, this House will recall that this Government
requested additional time in 2006 to develop a budget which provides effective
approaches to the nation’s challenges. I
am pleased to report that the extra breathing space granted has been put to
good use. After extensive consultation
and deliberation we have identified several fundamental targets and principles
to guide our decision-making.
Mr Speaker, our primary objective is to achieve
development through a bottom-up, regionally-focused approach. The focus is on the provinces and on rural
development. This Budget is an important
first step in this direction, both in the way it is presented and in the
decisions and priorities it reflects.
The Government has identified three components to its rural development
strategy.
The first component, sir, is community consultation and
grass root policy development. The main
responsibility for this lies foremost with us as Members of this House and with
Members of the Provincial Assemblies.
Specifically in this Budget we have made provision for Constituency
Community Development Officers in each constituency as well as provision for $1
million in rural development funding for each electorate. Furthermore, we have made provisions to
clearly identify provinces that will benefit from projects in the Development
Budget.
The second component, sir, is effective sectoral
strategies to improve access to economic opportunities for rural people. Notable development programs and activities
in this Budget include:
·
Expanding
infrastructure in the provinces such as land registration, court
infrastructure, water supplies, housing, micro-projects and community
facilities;
·
Restructuring
road and wharf maintenance expenditure to expedite rebuilding and improving
maintenance, including for two provincial airstrips, namely Temotu and
·
Fostering private
sector development in the provinces through training, a credit guarantee
scheme, and support to rural banking;
·
Resourcing and
promoting employment generating projects in the strategic areas of agriculture,
forestry, fisheries and tourism; and
·
Increasing
funding to education so as to enable a better skilled workforce throughout the
country in the immediate future.
The
third component, sir, is building the capacity of the provincial governments to
deliver services to rural communities and promote business development. For this Budget we have made provisions for:
·
$3 million for
provincial governments’ debt;
·
Beefing up
Ministries with sectoral responsibilities to undertake a wide range of capacity
building tasks across the country, including visits, research and training; and
·
Commencing
negotiations with provincial governments on measures to enhance their private
sector, including reducing business licence fees.
Related
to this issue, Mr Speaker, is the constitutional reform, particularly the
federal constitution. The Government is
committed to progressing the federal constitution that has begun by the successive
governments. We acknowledge and are full
supportive of initiatives by some provinces to advance the federal constitution
in their respective provinces. This is
reflective of their utmost desire and aspiration to move governance and
decision making closer to the people.
The Government’s commitment to the federal constitution has been
demonstrated by the transfer of this particular task to the Prime Minister’s
Office.
Mr
Speaker, we have not neglected national priorities. We are also very much determined to
strengthen
·
We have
established a separate head for the National Judiciary in recognition of its
independence;
·
We have
established a National Truth and Reconciliation Commission;
·
There is
additional funding support for the Parliament; and
·
We have expanded
the role of the Auditor-General.
Mr
Speaker, strengthening institutions is, however, as much a matter of process as
of money. An example of our serious
commitment to proper process is that, for the very first time in many years, I
am pleased that the Public Accounts Committee has been able to review and
scrutinize the Budget before the commencement of the Parliament sitting.
Mr Speaker, we are also most determined to
place
Mr
Speaker, we have toiled and grown the revenue base. This has allowed the Budget to produce a
small surplus and has avoided the need for further borrowing. Revenue collection has been helped by better
tax administration to ensure compliance and fairer management of tax exemptions
by the application of tax exemption guidelines.
Compilation of better statistical information will also help guide
economic decision-making into the future.
However,
sir, the improved budget position has not been at the expense of business. Action is being taken to create new
opportunities for business, particularly business in the provinces. The establishment of an effectively
autonomous Transport Fund will help to manage and develop our nation’s
transport infrastructure in a way that will attract further contributions from
development partners.
Mr
Speaker, let me now outline the fundamentals of the Recurrent and Development
budgets. Before taking into account new
revenue initiatives, government domestic revenue in 2007 is forecast to
increase by 13.5 per cent from that achieved in 2006. This is 18 percent above that originally
budgeted for 2006. After new revenue
measures we have implemented are taken into account, revenue will increase to
$887 million. This is an overall
increase of 28.8 percent.
Total
recurrent expenditure in 2007 is expected to rise by 12.7 percent. Recurrent expenditure to be appropriated in
the 2007 Appropriation Act (excluding Statutory Expenditure and Budget support
from donors) has increased by 18.3 percent to $ 792 million.
Mr
Speaker, the Government’s preliminary estimate for the national economy in 2007
is for real economic growth of almost 5 percent. Furthermore, we expect inflation to be
contained at around 8 percent. This
positive economic outlook stands us in good stead to implement the reforms
necessary to ensure the prosperity of
Mr Speaker, I would now like to give an overview of the
2007 Budget.
Mr Speaker, this Government’s long term vision for the
·
Provincial and
rural development;
·
Access for all
Solomon Islanders to essential services including schools, health care and
transport;
·
Stabilising law
and order and enhancing national institutions and services; and
·
Encouraging a
vibrant private sector economy.
Sir,
the Government’s activities are carefully directed to progress this
vision. These focus on taking leadership
in respect to governance, security and the legal system, supporting (not
stifling) private enterprise in the productive sectors, ensuring equitable
services and overcoming entrenched obstacles to development - obstacles such as inadequate capacity in
the provinces, limited lending facilities and difficulties in obtaining access
to land for major projects.
Sir,
in August 2006, we launched our Policy Translation and Implementation
Document. This has guided ministries in
developing new policies for the Government.
This is the basic framework by which our work and efforts should be
assessed.
Budget Speech
Mr
Speaker, the Government hopes that this policy framework will lead to vibrant
private sector throughout this nation, where new economic developments are
encouraged for the benefit of all Solomon Islanders. This can be achieved by a responsible
government creating a regulatory environment that supports the development of
new opportunities.
Of
course, Mr Speaker, these objectives are best achieved in a stable economic and
political environment, with a healthy democratic process and respect for the
rule of law. A combination of all these
factors is necessary if we are to overcome the significant challenges that
still face the national economy.
Challenges facing the national economy
Mr
Speaker, while the outlook for the national economy in 2007 is broadly
positive, there are a number of risks and potential shocks to our economy that
threatens to impact on economic growth.
Mr
Speaker, although the global oil price has fallen slightly in recent times, it
is expected to remain high by historical standards over the course of 2007, and
could potentially rise further. Higher
oil prices throughout 2006 have contributed to upward price pressures in the
national economy both for our domestically produced goods and for our imports.
Sir,
annual inflation continued to increase throughout 2006, rising to almost 10 per
cent before being contained later in the year.
This is largely due to the flow-on effect of fluctuating global oil
prices feeding into costs of transport and utilities. The strong economic growth of the national
economy, together with capacity constraints, has also contributed to price
pressures in the economy. Neither the
domestic nor the international pressures are expected to diminish in the near
future. Accordingly, inflation is
expected to remain steady at around 8 per cent through 2007, although increases
in global oil prices pose a real risk to this outlook.
Mr
Speaker, although inflation and high oil prices represent real risks to
economic growth in
For
many years, a big contributor to our economy has been the forestry sector. This sector currently provides around two
thirds of our export income and accounts for around 15 per cent of our market
economy.
However,
the un-logged forestry resource is limited, and there will be a significant
delay until replanted areas are ready for harvesting. Mr Speaker, we cannot afford to be too
heavily dependent on this one commodity for growth of our economy. Without strengthening other sectors and
industries, the expected medium term decline in incomes from forest industries
will adversely affect the economy and weaken government finances. This situation, Sir, could occur within the
life of the current Parliament. This
Government realizes the adverse impacts of this possibility and is committed to
take the necessary actions to avert this.
Mr
Speaker, the alternative path this Government is taking is to pursue vigorous
economic reforms. When combined with
prudent fiscal and monetary management, this can potentially sustain real
economic growth in the medium term – giving hope of rising living standards of
all Solomon Islanders, particularly those in rural areas.
3. Driving
Economic Growth
The barriers to growth
Mr
Speaker, although the outlook for the national economy is generally positive in
the short term, in the medium to long term there are a number of barriers to
economic growth. Continuing economic
reform to address these barriers is needed to ensure the current recovery
process continues and economic growth is shared by all Solomon Islanders.
Sir,
the first major barrier to broad based economic growth is that of
distance. Our rural areas are situated
some distance away from markets, and often lack access to essential
infrastructure such as telecommunications services, safe and reliable
transport, electricity and clean water.
The
second barrier to broad based economic growth, Sir, is the inefficient
regulatory and tax environment. High tax
rates and an overly burdensome regulatory framework mean that businesses are
unable to develop to their full potential.
The
third major barrier, Sir, is inadequate capacity for Solomon Islanders to start
up a business. This includes inadequate
business skills and entrepreneurship as well as limited access to capital.
Government Reform Agenda
Mr
Speaker, this Government plans to combat these barriers to economic growth by
continuing with its ambitious economic reform agenda. We will build on the advances we made in
2006. At the heart of the Government’s
reform agenda is the Strategic Framework for Rural Development and the
Bottom-up Approach. This can be seen in
the types of reforms the Government is implementing.
Transport and communications
Mr
Speaker, this Government has at the centre of its development strategy
initiatives to ease the critical impact of distance on the rural
economies. To this end, the National
Transport Plan aims to provide effective transport infrastructure to support
sustained economic growth and social development. This will include regular, reliable and
privately operated shipping services to all areas, as well as enhanced road and
air services. Furthermore, the
Government is working to improve affordable access to telecommunications
services by introducing competition.
Financial services
Mr
Speaker, improving access to secure and well-managed financial services for
rural people, particularly savings and micro-credit services, is a key
objective of this Government. This Budget includes two new initiatives that
will help to ensure this objective is achieved in the life time of this
Government.
First,
the Government will launch a Credit Guarantee Scheme. Mr Speaker, this scheme will help
entrepreneurs to secure loans with commercial banks to start their own
business. Such loan proposals are often
turned down by the commercial banks because they lack adequate security.
A
similar scheme was successfully operated by the Central Bank of
Mr
Speaker, the Government intends to encourage the expansion of high quality
financial services into rural areas, particularly savings and micro-credit
facilities. We are already seeing an
expansion of financial services across the country. Most notably, the value of loans has tripled
since 2003, more people hold bank accounts, some Post Offices are offering
banking services and other agencies will soon open up around the country in
partnership with the commercial banks.
As a
second initiative, Sir, we will further encourage this expansion by inviting
registered financial institutions in
State Owned Enterprises
Mr
Speaker, many of our State Owned Enterprises (SOEs) continue to under-perform
because of inadequate proper governance.
We have seen poor and unreliable services, and a lack of current audited
financial statements by SOEs.
To
address this, Mr Speaker, the Government is introducing a new SOE Act later
this year. It will introduce an
effective and consistent framework for good governance across all SOEs,
including clarifying roles and responsibilities of Ministers and the
Board. The new Act will not replace
other related specific pieces of legislation but will work alongside and
complement them.
In
addition, Sir, the Government is updating all SOE accounts with donor
assistance as well as encouraging all enterprises to develop and publicize
their services. Moreover, the Government
is reviewing consumer protection laws and regulations. On this note, Mr Speaker, I am obliged to
announce that the Government is withdrawing its annual subventions to
SOEs.
Needless
to say, the Government may consider providing subventions to SOEs that adopt
good governance and prudential principles and have established and justified
that such assistance is absolutely required for their sustenance to deliver on
their mandated responsibilities. Related
also to this matter, Mr Speaker was the statement on the Development Bank of
the
Business taxation and regulation
Mr
Speaker, the Government is implementing a number of reforms aimed at reducing
the heavy regulatory and taxation burden faced by all Solomon Islanders and
ensuring a level playing field for all businesses – large and small. These reforms include import duty reform, tax
exemption guidelines and the cessation of round log export duty exemptions.
These
reforms complement changes such as the new Foreign Investment Act, improved
statistical collections, streamlined work permits and a planned comprehensive
modernization of our business laws that will make it easier for businesses to
commence and operate.
Mr
Speaker, the Government is particularly keen to support Solomon Islanders
establishing and running their own businesses.
Hence, I am pleased to announce to this House today the allocation of
$3million for business skills training.
This training will help ordinary Solomon Islanders to start and operate
their own business so they can support themselves, their families and their
communities.
Further,
Mr Speaker, the Government is prepared to provide financial incentives to
Provincial Governments that abolish business license fees. We will soon be commencing discussions with
all Provincial Governments including the Honiara City Council with the view to
implement this initiative as soon as possible.
These fees are a major hurdle to those people wishing to start their own
business and should, therefore, be removed.
Mr
Speaker, I have recently announced reforms to import duties being designed to
benefit local businesses and communities.
Many small, local businesses have, in the past, struggled under the
burden of high import duties whilst other businesses obtain an unfair advantage
by gaining duty exemptions. The reforms
that I announced reduced by half, the top rate of import duty from 20 percent
to 10 percent. Many unnecessary and
costly exemptions have also been removed.
Sir,
under this reform, lower duty rates will also benefit rural communities by
reducing the pressure on the price of many basic goods. Before these reforms, the top import duty
rate of 20 per cent applied to most goods, including many basic items such as
soap, noodles, clothes, boots, exercise books, water tanks and mattresses. This has been reduced to a maximum of 10 per cent. This is a significant reduction that will
benefit all Solomon Islanders.
4. The 2007
Budget
Budget framework
A
particular innovation in the 2007 Budget, Mr Speaker, is reporting of
expenditures from a provincially focused perspective. This allows Solomon Islanders to see the
extent to which this Government is delivering on its bottom-up policy and
providing direct regional benefits.
In
relation to the Development Budget, Mr Speaker, I am pleased to be able to
report to the House that for the first time projects are categorized on a
provincial basis as well as by sector.
This confirms that, in line with this Government’s commitment to
fairness and equity, it is the most populous provinces – Malaita, Western and
Guadalcanal, that secure the major share of funds while the most remote and
least populous – Renbell, Temotu, Isabel, Choiseul and Makira attract the most
support per head of population.
Mr
Speaker, permit me now to outline the broad Recurrent Budget framework – the
‘big picture’. Revenue will rise from
$688million budgeted in 2006 to $887million in 2007, an increase of 29 per
cent. Total income, including
development partners’ Budget support, will rise to $949million, an increase of
26 per cent. Total Recurrent Budget
expenditure, including statutory expenditure and donor contributions, will rise
to $944million, an increase of $106million o4 12.7 percent.
The
Recurrent Budget is only part of the picture.
Nevertheless, particular focus is on this area because it is funded
almost entirely from government domestic revenue and is directly appropriated
by this House.
Indeed,
Sir, we also rely on our development partners for substantial assistance with
projects jointly agreed between the Government and the donors. Donor support in the development estimates is
$2,020million, an increase of 22 percent over last year. Most notably, we have doubled the Solomon
Islands Government contribution to the Development Budget to $88million. Details of these jointly agreed projects are
sent out in the 2007 Development Estimates.
In
terms of the Recurrent budget initiatives or new spending, Mr Speaker, I am
pleased to be able to report that $17million extra will be of direct regional
benefit. In subsequently years I hope to
be able to also provide provincial breakdowns of the full Recurrent Budget.
Mr
Speaker, I would like to highlight and stress that this is a fully funded
Recurrent Budget which will provide both a small surplus of about $5million and
a reduction in debt. While the
Government’s total level of debt at the end of 2006 was still in the order of
$2billion, it is now largely regularized and the focus is on debt reduction,
going forward. No new debt or government
guarantees were issued in 2006 or are proposed for 2007.
Main Priorities for 2007 Budget
Mr
Speaker, the priorities for the 2007 Budget are to encourage rural development,
to enhance the productive sector, especially in the provinces, and to maintain
and stabilize the national economy.
Mr
Speaker, the provinces and rural areas, where 85 per cent of the country’s
population reside, is paramount and close to the heart of the Government. In this vein, our prime focus will be to
allocate adequate resources to the provincial governments and to build t heir
capacity. Provincial governments, therefore,
can now expect additional visits and training across the range of government
functions. This will be complemented by
additional staff recruitment by provincial governments and national government
support of the Constituency Community Developments Officers for each
constituency.
Mr
Speaker, this Government recognizes the resources endowments and potentials of
the different provinces and regions. On
this basis the Government would strive to assist the provinces to develop these
resources and realize their full potential.
In the tourism sector, focus will be on Temotu and
Mr
Speaker, I indicated earlier that forestry, for many years, has been a big
contributor to our economy which currently provides around two thirds of our
export income and accounts for around 15 per cent of our market economy. This Government fully acknowledges the
contribution of the forest resources owners to our economy. To this end, the Government is determined to
devise and implement programs that would assist forest resource owners to
reinvest in the forestry sector, better manage the utilization of forest
resources and engage in alternate sustainable rural economic development
activities.
Sir,
this Government also recognizes the major contribution of fishers to our
economy and the huge potential of the industry to drive the economy. Our local fishermen in the rural areas, however,
need to participate and integrate more fully with foreign investors in the
harvesting and processing of the fish resources in our waters. The Government, in this respect, will seek to
undertake feasibility studies into the construction of small and medium pole
and line fishing vessels for local fishermen, establishment of tuna canneries
and fish processing facilities for smoked fish in the provinces.
The
Government, Sir, will be making active efforts to support these productive
sectors in the provinces. The
centerpiece of this will be credit guarantee scheme to encourage the major
commercial lenders to take on more provincial commercial debt. Private enterprise is the engine of growth
throughout the world. However, without
access to capital even the best of plans will fail. We will also be increasing support for
various palm oil projects, injecting funds into cattle, livestock and exotic
and indigenous crop production (nor neglecting farming and the essential
slaughter house facilities).
Mr
Speaker, the House needs no reminding that the land tenure system has been as
one of the main barriers of economic development and economic growth of our
economy. The complexity of the land
tenure systems in the country does not lend itself readily for land owners and
land owning groups to access credit from financial institutions.
The
Government is committed to pursuing a land reform process that provides due
recognition to customary lands being tribally owned – not individually owned or
held in trust by a group of trustees.
This process will entail the registration of tribally owned customary
lands and entrusting groups the right to deliberate on the optimal use of the
lands, including the utilization of t he lands for economic development.
To
this effect, a Tribal Customary Land Recognition Bill will be introduced to
this House at its next sitting in July this year. Related also to this initiative is the
Secured Transaction Reform Project being pursued by the Government. The objective of this project is to expand
access to credit through legal reform and mechanism that will promote the
effective use collateral such as land as security for loans.
These
initiatives, Sir, demonstrate this Government’s serious commitment and support
for sustainable rural development aimed at improving the livelihoods and the
daily lives of rural people. These are
in line with the Government’s economic development strategy which include
providing an enabling environment that our economy can grow and thrive upon and
ensuring diversified growth across the economy through the bottom-up approach.
Mr
Speaker, we will be working to ensure that transport links in the provinces are
improved through a new National Transport Special Fund. The Fund is expected to attract at least
$12million in Government funds – including $4.8million in additional funds in
this Budget – and substantial donor support.
Fundamentally, however, it will provide a more efficient and effective
means of providing transport infrastructure, roads, bridges and jetties, than
the current fragmented approach. The
Aviation Special Fund will also provide for the upgrading of two provincial
airstrips.
Sir,
provincial courts will also be upgrade and the backlog of cases reduced by a
new program of sittings and increased assistance to local courts and chiefs
courts.
Mr
Speaker, the role of our development partners in assisting
Sir,
my colleague, the Minister for National Planning and Aid Coordination will be
making further statements on these developments.
Sir, in 2006 the government rectified long term wage
imbalances with salary and allowance increases for constitutional office
holders, public servants, teachers and police.
In 2007 we will provide for the legitimate claims for back-pay for law
enforcement personnel during the tension period. We are also currently addressing, in a
consultative way, the national minimum wage policy – for the first time in 10
years.
Mr Speaker, this Government also seeks to strengthen our
overall economic position with a responsible approach to taxation and
investment returns. Revenue is expected
to rice by 13.5 per cent as a result of improved collections, reduced
exemptions and stronger enforcement.
Increases in determined round log prices last December and adjustments
to excise will net a further estimated $45 million per annum.
Dept repayments have been increased significantly in line
with the growth in revenue to $135.7 million, including $3 million to address
the provincial government debt that hampers the provinces’ capacity to
develop. This is an overall increase of
over 38 per cent in debt repayments.
Mr Speaker, the government has continue to make progress
in regularising its debts and has restructured and repaid a number of its
debts. The 2007 budget increases its
allocation to debt servicing by approximately $34 million, an increase of
one-third on 2006 levels. In 2006 the
government gave priority to domestic creditors and cleared the majority of its
trade creditor arrears. The government
will continue this focus in 2007 and assist Provincial Governments in clearing
their arrears. On this note I am proud
to announce that, compared to 2002 when all of the government loans were in
default, presently 75 per cent of all government official debts have been
regularized and are fully serviced.
Sir, in addition to the payments made to trade creditor
arrears holders, the government is honouring guarantees it proved to other
entities for loans in default.
Guarantees for the defaulted loans of Soltai and Western and
Budget Process Reform
Mr
Speaker, this government’s appetite for reform and for the most efficient and
effective use of scarce government funds has not been satisfied.
In 2006, expenditure performance by many ministries was
still disappointing, with too many projects which had been funded by the
government and development partners failing to make adequate progress. Steps are being taken to ensure an improved
outcome in 2007. We will be developing
structural changes to the budget that will give Permanent Secretaries more
flexibility in the use of funds. These
include less complex administrative procedures to move funds to where they are
needed, longer-term time horizons and, most importantly, greater accountability
for bringing projects to completion.
Mr Speaker, the usual excuse that budget procedures are
too complex as an explanation for inadequate project progress can no longer be
tolerated. In this vein, the government
will establish a Development Planning and Monitoring Committee to be chaired by
the Hon Prime Minister to oversee and ensure a rigorous implementation and
progression of the budget. Moreover, I propose
to integrate the Development and Recurrent Estimates and to introduce longer
horizons for estimates.
I
will also reduce the number of individual appropriations that slow effective
spending and provide no additional accountability. As an example, I do not believe it improves
accountability to know that a Ministry spent nothing on IT cables, nothing on
IT Software purchase, nothing on IT Software Development and nothing on IT
Software licenses and yet all these are reported in the current 514 page
document.
Sir, I shall also be pressing for an extension of the
innovation in the 2007 budget to show expenditure by project and sector in
numerical and graphical format.
Provinces and individual citizens deserve to be informed where their
money has been spent.
Mr
Speaker, this government firmly believes in joint and combined partnership to
progress our nation to prosperity and to succeed in our plans and
programs. Hence, we need to enlist the
assistance and support of all stakeholders throughout the country including the
private sector, SOEs, NGOs and churches in the implementation of our policies
and programs and in service delivery.
Most importantly, our efforts and endeavours must be blessed and in
unison with the will of God – our Creator.
Almost all in this House are Christians and we all love to profess that
Sir, the Holy Bible teaches about tithing. Deuteronomy
Indeed, Mr Speaker, this government is committed to
follow the path of the Holy Scriptures.
As a matter of fact, the government and the churches in
As a
start, in 2007, the government pledges to assist churches in every way possible
with the various programs that they conduct and promote for good causes
including education, health, peace building, national unity and youth
development.
Mr Speaker, while the government is committed to make
greater use of the NGOs and churches we will need to review budget records to
see if they can be modified to allow recording of expenditure in these entities
for reporting in future years. Initial
estimates suggest that between $140 million and $160 million of government
revenue is currently channeled through NGOs and private agencies.
Sir, of course, increased use of NGOs to deliver services
on behalf of government should not reduce overall government accountability for
ensuring provision of essential services to the community and the spending of
public funds. The community expects a
high level of service performance and full transparency in the use of public
funds.
5. Economic
Outlook
Overview
Mr Speaker, the prospects for the economy in 2007 are
positive. Economic activity has been
resilient and foreign aid flows are robust.
Lending from commercial banks and the Credit Corporation has been
rising, indicating that there has been an increase in business activities. The maintenance of law and order has further
strengthened business activity through greater investor confidence. As a result, we have experience growth in
employment.
Mr Speaker, these positive trends are broadly expected to
continue in 2007, with recent achievements creating a base for a stronger
economy. The government’s preliminary
estimate is that real GDP will grow by almost 5 per cent in 2007. Sir, I should also note here that another
government initiative in 2007 is to strengthen the National Statistics Office
to allow more robust predictions and analysis of progress.
However, there remain a number of risks to the national
economy, especially those relating to the price of oil. Oil price volatility over the course of 2007
could significantly disrupt the national economy, fuelling higher inflation and
limiting economic growth prospects. In
addition, despite recent improvements, business confidence remains somewhat
fragile. Any deterioration in the rule
of law may substantially damage the economic outlook.
Inflation
Mr Speaker, inflation has been held to under 10 per cent
in 2006, and he government estimates that will remain under control at around 8
per cent in 2007. However, as I have
indicated, risks remain around oil prices in the international market. Any significant increase would affect a lot
of domestic goods and service, especially in the transport, construction and
services sector.
As I have already stated, Mr Speaker, investor confidence
has grown in recent months. Investment
confidence has soared amongst the local business community and potential
investors both from abroad and locally.
Whilst there may have been some political disagreements between
Balance of Payments
Mr Speaker, while exports have risen over the last year
this has been often outweighed by greater rice in imports. This has led to continued trade deficits.
However, strong foreign exchange inflows have outweighed
the trade deficits, leading to rising external reserves levels. Accordingly, net foreign assets rose from
$711 million at the end of 2005 to $783 million n December 2006.
Mr Speaker, the government expects a similar trend in the
balance of payments in 2007. Although
there are some risks surrounding rising imports and fluctuations in the oil
price, the continuing inflow of foreign aid should impact positively on our
balance of payments.
5.
Conclusions
Mr Speaker, I have presented
to day a budget that lays a firm foundation for our nation and its economy
after a difficult year for us all. This
is a financially responsible budget that aims to build our nation’s prosperity
from the bottom up. It is one of the
first steps in implementing this government’s vision of a vibrant, prosperous
economy with better living standards for all
Mr Speaker, the budget outlines measures that are
important to the future of our beloved nation.
These and associated further economic reform build will the foundation
for our future prosperity. With the
significant challenges still to be faced we must not rest and be complacent
with our recent achievements. We must
look forward and work towards developing economic opportunities for all, especially
for the 85 per cent of Solomon Islanders who live in rural areas. This budget takes us one step I believe a
long step, closer to this goal.
Mr Speaker, this government has faith and
places trust in the people of
Mr Speaker, our nation has abundant
resource and great potential. It is for
all of us who hold
Mr Speaker, I commend this Bill to the
House and beg to move.
Hon Sogavare: Mr Speaker, I
beg to move this House do now adjourn.
The House
adjourned at