17 June 2024

The Government of Tonga announces its draft budget and plan for the upcoming year 2024/25 equivalent to $899.2 million. The theme for the 2024/25 budget is, “Building the foundations for sector-driven economic growth and sustainability”: solidifying the government’s commitment towards improving economic stability, social welfare, and achieving sustainable growth.

The budget for 2024/25 is a balanced budget, of which the last balanced budget proposed by government to Parliament was in 2019/20. This portrays the current government’s strong commitment towards maintaining macroeconomic stability. The 2024/25 budget sources $452.3m from government recurrent funds, while $446.9m is from development partners. There will be no new domestic tax proposed for FY2024/25.

Apart from the government’s general fund under the Ministry of Finance’s vote, the highest share of the recurrent budget continues to be allocated to the Ministry of Health and the Ministry of Education, as the two priority sectors; of which their allocations further increase in the 2024/25 budget. Some of the initiatives/programs planned to implement in the FY2025 in these two sectors include the expansion of inclusive education to outer islands, the new Hospital for Vava’u, and the new Queen Salote Nursing School building and National Museum for Tonga National University (TNU), among others.

In line with its budget priority of putting people first, the government proposes amongst other initiatives, to increase grants by 10% to non-government schools, at secondary, technical and vocational levels.

Furthermore, the government also proposes to increase by 10% the monthly stipend to the elderly and disability groups, including an increase in the number of beneficiaries to include those from age 67 (vs. the current 70 years old) and will further expand in FY 2026 to include those from age 65 and age 63 in FY 2027.

The government also plans to address inflationary pressures on the income of the civil service by adding a 5% COLA (cost of living allowance) effective in July 2024 (in addition to 5% effective in January 2024), and other remuneration packages particularly towards retaining and recognizing skills of teachers, nurses and doctors in 2024/25.

Apart from provisions in relevant ministries to combat illicit drugs, government also provide an allocation of $5m specifically for combatting illicit drugs.

The Budget for FY 2024/25 also focuses on allocating resources to support new public-private partnership (PPP) investments beginning with $9.1m for prioritized ongoing development activities, enhance national security, and improve the social wellbeing of all citizens.

-ENDS-