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Levies imposed to build Pacific Games will be stopped PM Pohiva says
00:01 am GMT+12, 17/05/2017, Tonga

Tongan Prime Minister ‘Akilisi Pohiva said all levies the government has collected to host the Pacific Games 2019 would be diverted to help prepare the Tongan athletes.
His comment follows this week’s announcement that Tonga will not host 2019 Pacific Games.
Pohiva said he decided to pull out of hosting the Games after he saw a World Bank report last week.
The report said many countries, including in the Pacific, were left with under-utilised sporting facilities after hosting sporting events which rapidly deteriorated with under-use and lack of funding for maintenance.
In its budget for 2015/16 the government increased the international passengers’ departure tax by TP$100 (US$43) to TP$165 (US$71) while a new charge on foreign currency transfers was expected to collect an additional TP$2 million (US$872,000) each year to help fund the Games.
Pohiva said the government would soon stop collecting the levies and all the money that had already been collected would be diverted and invested on sport training.
When asked how he expected the Pacific Games Council to react, he said they had read the agreement that bound Tonga to host the Games and could not see anything that would backfire on Tonga.
“I told the cabinet not to worry about it as at the end of the day the participating countries and their athletes would leave Tonga and return to their countries, leaving us here with the burden of trying to maintain the quality of these sporting facilities,” the Prime Minister said.
“Maybe the council will penalise Tonga by not giving us any further chance to host the Games in the future,” he said.
The Prime Minister told Kaniva News he believed New Zealand and Australia did not support Tonga hosting the Games.
He said New Zealand’s former Foreign Affairs Minister Murray McCully warned him about hosting the Games.
He said New Zealand only donated NZ$1.8 million (US$1.2 million) for the Games while Australia had not made a donation.
“This showed to me they are not supporting Tonga’s hosting the Games”, Pohiva said.
He said there was no problems with this because the two countries had invested millions of dollars on other projects in Tonga.
“It is not fair for Tonga to host the Games while at the same time we are relying pretty much on these countries to support us financially through the budget support funding,” Pohiva said.
Meanwhile, Pohiva said he would have cancelled hosting the Pacific Games in 2019 if he had been aware of the World Bank report earlier.
He said it appeared no feasibility studies were carried out before the previous government agreed to host the Pacific Games in 2019.
Speaking to Kaniva News, the Prime Minister said he was “astonished” by the contents of the report.
Pohiva said he did not know when the report arrived in Tonga. It was sent to the Ministry of Finance and stayed there until last week when he saw it.
Pohiva said he had no doubt why former Finance Minister Lisiate ʻAkolo criticised the former government for bringing the Games to Tonga because it would ruin the country economically.
Pohiva said he believed ‘Akolo got a copy of the report.
Akolo was finally sacked because of his stance on the Games.
According to the World Bank report, which  Pohiva provided to Kaniva News, the Games would cost US$70 million (TP$ 159,873,183/NZ$101,807,152).
The Bank said this would use up 60 percent of annual government revenue and represent 12% of gross domestic product.
In contrast, the London Olympics were estimated to have cost about 0.6 percent of the UK’s GDP and 1.5 percent of annual Government revenue.
“Additional public expenditure of USD$70 million is very difficult to finance or justify given Tonga’s current challenging fiscal and economic position,” the report said.
Government expenditure would have to be cut by up to a third to balance the budget.
Sporting events could lead to increased visitor numbers, which could contribute to economic growth, but the extent of economic growth was heavily dependent on the existing state of the economy. Most international studies have found that impact on employment and incomes is small and the gains in government revenue much less that the original expenditure, leaving fiscal conditions worse. “
The report said that visitors for the event might simply displace existing tourists, especially if capacity was limited.
Disruptions caused by sporting events could lead to economic losses.
Visitors might allocate a large proportion of their spending to imported goods, reducing any benefit to local suppliers.
This was likely to occur in Tonga, where many products were imported.
Foreign-owned tourism and hospitality businesses might repatriate profits, rather than re-injecting them into the local economy.
International evidence shows that specialized investments, such as stadia and aquatic centres, were poor investments, the report said.
They did not generate sufficient return to justify their existence during the short period of events.
“Many countries, including in the Pacific, have underutilised sporting facilities left over from previous events which rapidly deteriorate with under-use and  lack of funding for  maintenance,”  the report said.


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