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‘Token Initiatives In The 2018-2019 Budget Are Not Sustainable In The Long Run’

‘Token Initiatives In The 2018-2019 Budget Are Not Sustainable In The Long Run’
Sitiveni Rabuka.
August 11
10:00 2018
  •  Sitiveni Rabuka is leader of the Social Democratic Liberal Party. He was Prime Minister in the SVT government from 1992 to 1997. The views and opinions expressed in this article are those of Sitiveni Rabuka and not of the Fiji Sun.

This is the second of a four-part commentary on the 2018-2019 Budget by Sitiveni Rabuka, Party Leader of the Social Democratic Liberal Party

The Bainimarama Government has been in power in the last twelve years. In reviewing the Budget for the last 12 years, the Prime Minister and his A-G and Minister for Economy continue to be optimistic and mislead the people of Fiji by painting a rosy picture particularly when Budgets are announced. They are always boastful and self-praising of their achievements compared to other successive governments.

In addition, they continue to boast that the FijiFirst Government is the only and the first government to ever implement new policy initiatives, which in most cases, are not true at all.

The 2018/19 Budget is no different from other budget presentations, it continues to build a rosy picture of the future in improving the lives of Fijian families.

No effort has been made to consolidate government finances to provide “fiscal space” due to our vulnerability.

Token initiatives

While there are merits to increasing maternity leave from 84 days to 98 days and the introduction of the five days paternity leave in addition to the other incentives such as for first time home buyers.

The $1000 payment to each newborn is a handout and placing $500 of that into the bank has an opportunity cost because the money will be borrowed and idle for a very long period (at least six years). There are transparent and better options available which are sustainable in the long run. One that comes to mind is to increase the annual tax rebate of $1500 available to parents for every child under 18 years.

All these token initiatives are meaningless to civil servants. They want “job security” first before anything else. Once there is job security, then complementary incentives will be more meaningful.

New Home Owners

There are better ways to help new home owners rather than giving handouts to a selected few. The better and transparent way to help new homeowners is for the Government to work with developers (and the private sector) through subsidising the cost of developing subdivisions by paying for infrastructure and utilities to reduce the cost of housing lots. At the same time, provide employment opportunities.

The major cost component of any subdivision is the cost of infrastructure and utilities. The subsidy will reduce the cost of lots and make it substantially affordable to first time homeowners, rather than giving handouts. Targeted subsidies are the most practical and transparent approach to support our people.

Partnership between the private sector and Government will increase confidence and be much more transparent and lead to an increase in investment.

Zero rated duty on imported vegetables

The argument that we should encourage healthy living by removing duty on imported fruits and vegetables, is a short-term or band-aid solution.

We should be directing more resources to the production of local fruits and vegetables, and supporting our local farmers.

Today we import almost 45 per cent of food products. We should focus on improving our local products. Again there is inconsistency in the policies of the Bainimarama Government. On one side, they encourage “Buy Fijian Made” and on the other hand, they encourage the import of other food products. Again, another ill-thought out policy because it will further drain our foreign exchange since we are already importing 40 per cent of our food supply.

Resource Based Sectors

It is unfortunate that despite the poor performance of the resource based sector, very little resources have been allocated to these sectors. These sectors are the main driver for production and provide the employment opportunities that our people are crying for.

The low level of support to our resource based sectors in comparison to the other sectors is indicative of the low priority placed on these sectors by the Bainimarama Government which are critical for job creation, export and a major foreign exchange earner.

These sectors are the powerhouse of the economy. Agriculture’s contribution to GDP was 16 per cent in 2006, now it is only 6 per cent. Where is the agricultural revolution that the Minister boasts about when it is only receiving $96m from the budget, and 54 per cent of that allocation is still controlled by the Minister for Economy under Requisition?

If FijiFirst truly cared about Fijian families, more assistance would be directed to our productive sectors to ensure our people are able to earn a decent living, off their sweat, rather than being taxed to the nth degree, and kept dependent on handouts while the rich get richer and the poor get poorer. It is also critical for effective participation of resource owners , reduce rural-urban migration and improve the standard of living in our rural areas and maritime zones.

Conclusion

This is an irresponsible, vote-buying budget prepared without due consideration of the key constraints on our economy. There is a lot of contradictory policies, which are not well thought out. This creates uncertainty in the market and lack of confidence in the private sector to invest.

Our economy is driven by consumption. More resources should have been directed to the productive sectors to provide employment opportunities to the 4.5 per cent economically active population who are unemployed.

 

Feedback: jyotip@fijisun.com.fj

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