Tonga’s $899.2 million budget for 2024-25

A draft budget of TOP$899.2 million (US$381 million) for the year 2024/25 was announced by the Government of Tonga, stating that it is the first balanced budget proposed by government to parliament since 2019/2020.

The theme for the 2024/25 budget is, “Building the foundations for sector-driven economic growth and sustainability”.

The Prime Minister’s Office stated today that the budget aims to solidify the government’s commitment towards improving economic stability, social welfare, and achieving sustainable growth,

“This portrays the current government’s strong commitment towards maintaining macroeconomic stability,” PMO stated.

The 2024/25 budget sources $452.3m (US$192 million) from government recurrent funds, while $446.9m (US$189 million) is from development partners.

There will be no new domestic tax proposed for FY 2024/25.

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 a 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 percent to non-government schools, at secondary, technical and vocational levels,” the PMO stated.

“Furthermore, the government also proposes to increase by 10 percent the monthly stipend to the elderly and disability groups, including an increase in the number of beneficiaries to include those from age 67, versus 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 percent COLA (cost of living allowance) effective in July 2024 (in addition to 5 percent effective in January 2024), and other remuneration packages particularly towards retaining and recognising skills of teachers, nurses and doctors in 2024/25.

Apart from provisions in relevant ministries to combat illicit drugs, government provided an allocation of $5m (US$2.12 million) 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 (US$3.86 million) for prioritised ongoing development activities, to enhance national security, and to improve the social wellbeing of all citizens.