Exchange rates caused $74m loss; Tongasat payments unlawful, says Tu‘i‘onetoa

'Oku taupotu ki lalo ha fakamatala faka-Tonga

A TP$74 million government loss in the Auditor General’s report to Parliament last week on the government’s 2017 accounts was caused by the high foreign exchange rates, Minister of Finance Pōhiva Tu’i’onetoa said.

Hon. Tu’i’onetoa, a former auditor general, said the loss could become a profit next year if the Tongan currency traded more strongly against foreign currencies.

The $74 million was the total amount of loss after the government’s assets and liabilities which were in foreign denominations had been exchanged into Tongan pa’anga.

The Minister was responding after Opposition MPs blamed the government for the loss.

The TP$74 million loss has become a weapon for anti-government elements who have claimed the ‘Akilisi Pōhiva government abused its financial responsibilities.

They have attacked the government in the wake of the Supreme Court’s ruling that the payment of TP$90 million to Princess Pilolevu’s Satellite company was illegal.

“No one in the ‘Akilisi Pōhiva government misappropriated the TP$74 million,” the Minister said.

Auditor’s report

Hon. Tu’i’onetoa said when the Auditor General made his annual report on government assets and liabilities their values must be in Tongan pa’anga.

This included local loans, international loans, cash on hand and at banks and all other investments.

Some of these liabilities and assets were in foreign denominations, including bank accounts which were kept in US dollars, the Minister said.

The exchange from foreign currencies into Tongan pa’anga could either generate losses or profits depending on the exchange rates for those currencies.

Examples

Hon. Tu’i’onetoa gave Kaniva News examples.

He said if Tonga borrowed US$10 million on 30 June 2016 at an exchange rate of TP$1.50 to the US dollar this would appear on the auditor’s report for the first time on June 30, 2016 as a liability of TP$15 million.

If by June 30, 2017 this loan had not been paid and the US exchange rates increased from US$1.5 to US$2.5 the loan would be recorded in the government’s balance sheet as TP$25 million.

This meant, the US$10 million borrowed on 30 June 2016 had become US$25 million on June 30,  2017, a difference of $10 million.

The minister said this was called Foreign Exchange Risk Exposure or loss.

If Tonga wanted to pay its US$10 million loan while the rate was US$2.5 it had to pay $25 million.

Hon. Tu’i’onetoa said this was why the TP$74 million appeared on the auditor’s report.

“It was just a loss caused by the fluctuation of foreign and Tongan exchange rates.”

Tongasat unlawful payments

The TP$74 million appeared on the Auditor General’s report on June 2017 and the TP$90 million transferred to Tongasat, which was first reported by the Auditor General in 2013, were absolutely different in nature, the Minister said.

“The TP$90 million paid by the two former Prime Ministers to Tongasat were made unlawfully and without Cabinet’s knowledge,” he said in Tongan.

He said the TP$90 million paid to Tongasat was apparently paid secretly.

If the Tongan currency had been stronger, the TP$74 million loss could have become a profit.

The Minister said the TP$74 million had yet to be paid.

It was an adjustment made so the auditor could create a balance sheet based on Tonga’s own currency.

The main points

  • A TP$74 million government loss in the Auditor General’s report to Parliament last week on the government’s 2017 accounts was caused by the high foreign exchange rates, Minister of Finance Pōhiva Tu’i’onetoa said.
  • Tu’i’onetoa, a former Auditor General, said the loss could become a profit next year if the Tongan currency traded more strongly against foreign currencies.

For more information

Petition to sue former PMs involved in Tongasat payment

1 COMMENT

  1. Ko e fakamatala tonu ‘eni ‘a e Minisita Pa’anga Pohiva Tu’i’onetoa ‘o fakama’ala’ala ‘a e mo’ua pa’anga ‘e $74 miliona ‘oku ha he lipooti 2017 ‘a e ‘atita.

    Ko e mole ia ‘oku makatu’unga he fetō’aki ‘a e fetongi pa’anga Tonga ki muli’ pea ‘e lava pe mo’ua ko ‘eni ke hoko ko ha tupu ‘o kapau ‘e a’u ia ki ha taimi he kaha’u kuo malohi e pa’anga Tonga’ he pa’anga muli.

    Ko e $74 miliona ko ‘eni koe mole ia ‘i hono tanaki fakakatoa’o e mo’ua mo e koloa ‘a e pule’anga ne tauhi ‘i he pa’anga muli. Pea ‘i hono liliu mai ‘e he ‘atita ki he pa’anga Tonga’ ne iku ange ko e mole TOP$74m.

    ‘Oku ‘ikai ko ha me’a fo’ou ‘eni ‘oku pehē pe ia mei he ta’u ki he ta’u ‘e ‘i ai ‘a e lipooti ‘o ha fetō’aki peheni.

    ‘Oku kehe ‘aupito ‘eni ia mei he pa’anga ‘e $90 miliona na’e ‘ave ta’e fakalao kia Pilinisesi Pilolevu mo e Tongasat.

    Ko e pa’anga kesi ia pea na’e ‘ikai ‘ilo ‘a e kapineti’ ia ki hono moulu’i ‘o ‘ave.

    Ko e $74 miliona ia kuo lave ki ai ‘a e ‘atita ko e ola pe ia ‘o ha fakatonutonu fakapepa kae lava fa’u e fakamatala ‘atita’. Na’e ‘ikai kaiha’asi pe kai ‘e ha taha ia he pule’anga’ ha pa’anga ai.

    Ko e me’a ‘eni ‘a e Minisitaa:

    Ko hono fakanounou ko e Fakamatala Koloa mo e Mo’ua a e Pule’anga (Statement of Assets and Liabilities or Balance Sheet as often called by this name at Private Sector Businesses). ‘Oku ha ai a e ngaahi mo’ua (lahitaha pe ko e no, fakalotofonua mo e no mei Tu’apule’anga), pea mo e ngaahi Koloa, hange ko e Pa’anga (Cash on hand or Cash at Bank), mo e Investments etc. Pea ‘oku iai a e ngaahi Koloa mo e Mo’ua ‘oku denominate he Pa’anga Muli (Foreign Currenies) hange ko e ngaahi no mei muli kuopau ke totongi ia he Pa’anga Muli. Pehe ki he ngaahi Bank Accounts ‘oku tauhi pe ia he US Dollars.

    ‘I he ‘aho 30 ‘o Sune ‘o e ta’u kotoa, ko e ‘aho ia ‘oku ngata kiai a e ta’u fakapa’anga a e Pule’anga Tonga, pea kuopau ke teuteu a e Fakamatalapa’anga ‘o ngata he ‘aho 30 ‘o Sune he ta’u kotoa, pea hoko a e ta’u fakapa’anga fo’ou he ‘aho 1 ‘o Siulai ‘o fai atu ai ki he ta’u ‘e taha.

    Kuo pau ke liliu kotoa a e ngaahi Mo’ua mo e Koloa na’e fakahoko he ngaahi pa’anga muli (were denominated in foreign currencies) ki he pa’anga Tonga ‘i he ‘aho 30 Sune he ta’u kotoa pe, koe’uhi ke fai a e fakamatala he pa’anga Tonga pe. E fai he ta’u ni, ‘e toe fai he ta’u fo’ou, pea pehepehe ai pe kae’oua kuo ‘ikai ha sino ko e Pule’anga Tonga. Pea ko e ola ‘o e fo’i liliu ki he pa’anga Tonga a e ngaahi koloa mo e mo’ua na’e denominated he paanga muli, ‘e lava ke hoko ‘a e me’a ‘e ua: ha tupu (appreciate pe profit in foreign exchange) pe mole (depreciate or loss in foreign exchange)

    Tau fakatātā: Kapau ko e no mei muli US $10m, na’e fai ia he ‘aho 30 Sune 2016, ko e exchange rate ‘o e ‘aho koia na’e US$I=TOP$1.50. Ko e ‘uluaki kau a e mo’ua ko eni he Fakamata Pa’anga ‘o e Koloa moe Mo’ua ko e Fakamatala Koloa mo e Mo’ua ‘o e ‘aho 30 Sune 2016, pea ‘e ha koe taha ‘o e ngaahi mo’ua (liabilities) ko e No TOP$15m. Sai kapau ‘e a’u mai ki he ‘aho 30 Sune 2017, ‘oku te’ekiai totongi ‘a e mo’ua ka kuo hiki hake mahu’inga ia ‘o e US Dollar ‘o US$1= TOP$2.50 ‘o hange koia ‘oku hoko he ngaahi ‘aho ni, ‘e fokotu’u a e Mo’ua koeni he Fakamatala Koloa mo e Mo’ua ‘o e ‘aho 30 Sune 2017 ko e TOP $25m. Ko e faikehekehe ko e TOP$10m. Ko e me’a eni oku ui ko e Foreign Exchange Risk Exposure pe loss, pe te u fakatonga pe ko e “mole he fetongi pa’anga” kapau te tau totongi a e mo’ua US$ 10m he ‘aho ni, te tau totongi’aki a e TOP$25m fakataha mo e totongi tupu (intereest), hili koia ko e no US$10m he taimi na’e ma’u mai ai a e no 2016, na’e fe’unga pe a e koloa na’e lava ke fakatau’aki mo e TOP$15m. Mole ‘a e TOP$10m ko e feto’aki pe he liliu pa’anga.

    Aia na’e ikai ‘aupito ke kai ‘e ha taha ha pa’anga TOP$74m, ‘i he Pule’anga ‘o Akilisi Pohiva, ko e Loss pe mole ia he feto’aki a e mahu’inga ‘o e pa’anga. Me’a ia ‘oku totonu ke mahino, ko e mole pe ia he feto’aki ‘a e anga ‘o e feliliu’aki ‘o e Pa’anga Muli mo e Pa’anga Tonga (Foreign Currencies mo e Tongan Currencies). Ko e TOP$74m, ko e tanaki fakataha ia liliu ki he pa’anga Tonga ‘a e ngaahi koloa mo e mo’ua na’e tauhi ‘i he ngaahi pa’anga muli, pea iku ange ko e mole TOP$74m. E lava pe ia ko e Tupu (profit in exchange rates) ‘o kapau na’e malohi ‘etau pa’anga Tonga he ngahi pa’anga muli. Ka ko e tu’u ‘i he taimi ni, oku vaivai a e pa’anga Tonga he fakahoa ki he pa’anga Australia, NZ, mo USA etc.

    Kehekehe ‘aupito ia mo e mole a e $90m ‘i he lipooti ‘a e Atita ‘i he 2013. Ko e $90m na’e ‘ave ‘e he ongo Palemia Malolo, ‘o ‘ave ma’a e Tongasat, ko e ave ‘aupito ia ta’efakalao ‘o e pa’anga ‘a e kakai, ta’e ‘ilo kiai a e Kapineti ‘i he ‘aho koia. Pea ‘e ‘ikai hala ke tau pehe na’e ‘ave fakafufu. Oku puli ‘aupito a e pa’anga ia e $90m ‘ikai toe ma’u. Ko e $74m mole ‘o e 2017, kapau ‘e a’u ki he ta’u 2018 kuo ma’olunga ‘a e pa’anga Tonga ia he ngaahi pa’anga muli, ‘e lava pe ia ‘o liliu a e mole $74m ko e Tupu $74m.

    Ko e mole ia ‘o e $90m, ko e pulia ia e pa’anga (cash), ‘oku ‘ikai ko e me’a fakapepa ‘o hange ko e $74m, he ‘oku te’ekiai ke totongi ‘a e $74m ki tu’a ‘aki ha cash ki ha mo’ua. Ko e fakatonutonu fakapepa pe (Balance Day Adjustments) ka e lava ‘o fa’u a e lipooti ‘i he pa’anga pe taha (one currency), pa’anga Tonga, i he ‘aho ‘oku ngata ai a e ta’u fakapa’anga,( Balance Day). Ko e puli pe mole a e $90m ko ‘ene pulia ‘aupito ia ‘a e cash: tukukehe ka hopo’i pea toe ma’u mai mei he Tongasat mo e ongo Palemia Malolo.

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