13 Jun 2011

Tonga debt fuels state asset sale debate

5:27 am on 13 June 2011

The possible sale of state-owned businesses is being debated in the Tongan parliament to cut the country's debt as the budget also shows a substantial deficit.

Our correspondent, Mateni Tapueluelu, says there're indications the government is planning to sell some businesses, such as the Development Bank of Tonga.

He says some MPs oppose the sale of profitable enterprises, but the argument in favour of selling is stark.

"The strong argument for privatisation is that Tonga has a 314 point 8 million pa'anga debt, so 45 cents of every pa'anga goes towards paying the national debt, so privatisation is not a bad way to go about having that reduced."

Mateni Tapueluelu says some MPs are calling for more spending to be directed to the health and education sectors and cuts to the military budget.