Utility, loan and interest relief features of Solomons stimulus package

8:14 am on 8 April 2020

The Solomon Islands Finance minister has provided a glimpse into the contents of the government's proposed Covid-19 economic stimulus package.

Honiara port, ships, boats, containers - Solomon Islands

Photo: RNZ Pacific/ Koroi Hawkins

Speaking on the floor of parliament Harry Kuma said the aim was to present the package to cabinet for approval this week.

Mr Kuma said the package had four parts to it including soft medium-term relief for businesses and the public, financial injection into the productive and resource sectors, equity investment into specific public and public/private companies and finally medium to long-term support for economic growth.

"The road ahead to stimulate the economy will not be easy. It is tangled with uncertainty, fear and travel restrictions that have been established to contain the virus but on the other-hand are restrictive in the implementation of the stimulus package with the business sector," said Mr Kuma.

The minister said, alongside the government's contribution, funding for the economic stimulus package would be supported by the country's donor partners.

The Breakdown

According to the finance minister the first part of the economic stimulus package, soft medium-term relief, would include a utility relief component from the likes of Solomon Power and the Ports Authority; loan and interest relief from banks and financial institutions; tax relief for specific sectors; and ongoing payroll support for public servants in non-essential roles, all of whom have been ordered to take emergency leave.

The second part of the package, financial injection into the productive and resource sector, would involve investments to add value to agricultural products and the fisheries, forestry and tourism sectors. It would also include a new Covid-19 finance product in the country's development back to support agricultural ventures.

People at a bus stop in Honiara, Solomon Islands

Photo: RNZ Pacific/ Koroi Hawkins

Thirdly, for equity investment in public and public/private companies, Harry Kuma singled out Solomon Airlines, Soltuna, Kolombangara Forests Plantation Limited and the Development Bank of Solomon Islands as the entities which would benefit from this part of the package.

And finally for the government's medium to long-term support for growth, Mr Kuma said the plan was to bring forward un-funded infrastructure projects under the national transport plan such as the construction of wharves, roads and bridges particularly in rural areas.

"Stimulating the economy, like protecting our citizens from Covid-19, is important and is everybody's business. We all need to see a goal together, plan together and work together to reinvigorate the economy."