Analysis

Local Industries Show Big Confidence Towards 2020-2021 National Budget

Fijian business owners, investors, garment factory operators and now the head of local business empire, a company synonymous with good business practices and charity work – the Tappoo Group – all have come out to speak in favour of the 2020-2021 National Budget.
24 Jul 2020 14:10
Local Industries Show Big Confidence Towards 2020-2021 National Budget
Many Fijians from the business sector, tourism industry, construction and other sectors have praised the Fijian Government’s 2020-2021 National Budget. Photo: Naisa Koroi

Since the 2020-2021 National Budget address, there has been a lot of commentary on how this will pave the way for Fiji’s future.

The criticism from Opposition, mainly from National Federation Party comes as no surprise. There are many others from various sectors who have come out in support of the Budget. And, when those who have invested millions in Fiji’s economy and employ hundreds of Fijians come out in support of the Budget, we must take note of their commentary.

Tappoo Group

The director of Tappoo Group of Companies, Mahendra Tappoo, yesterday released a glowing statement, praising the Budget.

Mr Tappoo said: “The current COVID-19 pandemic has imposed unprecedented challenges to this small island developing economy of Fiji. It’s a one-in-a-100-year event which has shaken the world economy so badly.

“It has negatively impacted the entire world economy. The economic challenges brought about by this pandemic is huge and unprecedented. The pandemic is not even over yet. These are extra-ordinary times with extra-ordinary challenges requiring extra-ordinary action.

“And nobody has a magic wand to solve all our problems.”

He described the 2020-2021 National Budget as a “path-breaking” Budget.

“Against this backdrop, the A-G and Minister for Economy must be highly commended for coming up with an admirable, bold, aggressive, positive, optimistic and a path-breaking Budget with sweeping economic reforms which lays a solid foundation for economic recovery and future prosperity,” he said.

“The flow-on benefits of these economic reforms will only be fully realised in the years to come. These are steps towards a liberalised and modern economy which is a proven formula for economic success in advanced economies.

“The Budget must be recognised for coming up with a blueprint that will position Fiji for the future.

“There are stimulus packages, relief for employees, investment incentives, removal of bottlenecks for trade and investment, introduction of a more simplified system of doing business, removal of bureaucracy and so much more. For example, the boost for tourism industry. Fiji is so dependent on tourism earnings.

“The tax cuts, incentives and reforms in the tourism sector will make Fiji more competitive against intense international competition post COVID-19, with huge flow-on benefits to the entire economy.

“Unprecedented duty reductions will result in lower prices across a huge range of items in supermarkets, stores, showrooms, and everywhere, across all categories. This will create a highly competitive environment across all trades and businesses resulting in significant benefits to the consumer. And the list goes on.”

Tappoo’s Founding Principles:

“As a family company with very humble beginnings 78 years ago, we have our own set of management principles based on our family values, which has despite this unprecedented crisis, motivated us to retain all our 1800 employees throughout the Tappoo Group of Companies.

“We have always treated our employees as our extended family and have gone the extra mile to protect our employees from termination of employment.

“We have not terminated or laid off a single employee despite unprecedented financial challenges due to closure of airports and hotels and the closure of tourism industry which we are an integral part of. It hasn’t been easy.

“But it gives us a lot of satisfaction to have done that.”

The Tappoo Group of Companies is easily one of the most successful local companies we have in the country today. This show of confidence by a major player shows the people who put their money back in this country are confident with the 2020-2021 National Budget.

Others who have come out in support of the 2020-2021 National Budget are:

Mark One Apparel managing director Mark Halabe, who said the Budget was correctly optimistic and aggressive and it had to be. The garment giant added: “This Government decided not to go to the austerity side of running a Budget. They recognised that doesn’t work.

“We’ve learned that in other economic downturns that you’ve got to spend to keep the economy going or get the money to be flowing. So they’ve taken that action. I think it’s the correct action.”

FMF Foods Limited managing director Ram Bajekal expressed similar sentiments saying that doing business was going to be a lot easier.

“I think it was a very, very bold Budget… At the end of day I think the private sector and all of the sectors need to work with the Government to help us get through this terrible time that we’re going through,” Mr Bajekal said.

These are people who have put money where their mouth is. People like Mr Halabe have invested their time and resources in the country. When they are confident about our National Budget, it gives a clear signal of how our investors feel.

Tourism industry

The tourism sector also gave this Budget the nod. Tourism stalwarts like Tony Whitton, who have also invested quite heavily in Fiji, gave an extremely positive reaction to the Budget.

He had said: “On behalf of the tourism industry we commend Government for the wisdom in recognising that tourism will be a critical industry in ensuring our economy recovers from the impacts of COVID-19. The reduction in direct taxes, airport departure taxes, alcohol tariffs and marketing incentives for Fiji Airways and hotel packages will ensure that Fiji is priced competitively to attract international visitors when our airports open.

“We will do our bit to ensure these incentives are passed on to our international visitors to provide good value packaging and inspire them to visit Fiji. I note we are targeting 150,000 visitors in the first three months when airports open.  We can do this with the right incentives that was announced. This will get our people back to work, government tax revenue flowing again and ensure the tourism dollar circulates to everyone in the community.”

Fiji Hotel and Tourism Association (FHTA) chief executive officer Fantasha Lockington said the Government had directly responded to the industry’s needs towards recovery.

“We are confident that our members will support the initiatives to ensure that the savings are passed on to the customers, and know they are keen to provide value for money packages to rekindle the tourism industry. Government has taken a critical enabling step towards this goal,” she said.

Now people from other sectorshave also reacted positively to this Budget:

Jenn’s Construction Ltd managing director Kuberan Chetty labelled the Budget as “an interesting, impressive, intelligent, growth friendly and employment booster Budget”.

“Growth in the infrastructure sector will generate employment and employment will indirectly support the other service sectors like the hotel industry, restaurants etc. during this COVID-19 pandemic period,” he said.

“In terms of construction it has given us a big relief, especially for custom duty in terms of getting construction items from abroad…”

“It will help us to bring the construction cost down and will help Government as well to bring more Government jobs done in the same allocated Budget. At the same time there is a provision on debt which will provide breathing space to give us time to pay if the cash flows are down.

“In the construction business we can’t expect good cash flow all time and some time we don’t have any other alternative but to delay a little to pay our tax liabilities to run the business.

“So the provision of interest rather than huge penalties will be like oxygen for construction business and it will be win-win situation for both- construction company and Fiji Revenue and Customs Service (FRCS).”

Mr Chetty’s views matter more than the usual criticism by NFP’s Biman Prasad or Fiji Labour Party’s Mahendra Chaudhry. Why? Because Mr Chetty, like other people in the business sector, are working to keep this economy going. He and others like him are employing Fijians, are paying taxes and optimistic that this Budget is a step in the right direction.

Real estate sector

Propmate Realty director/principal agent Anil Prasad said the real estate sector welcomes this Budget.

“I personally believe this is the best Budget the Government could come up with in the situation we currently are in. The highlight of the Budget is the removal of stamp duty across the board. This will trigger buyers to go make that purchase since they will be saving a lot on that. Settlement time will also be reduced and overall the cost of doing business has come down,” Mr Prasad said.

“The Government grant for building new homes or buying your first home will also enable those falling in the brackets to buy their first home or buy land and build their first home.

“The incentive scheme for residential and commercial subdivision development will significantly reduce the price of the end product hence push up sales for the plots.

“Overall the real estate industry is expecting a boost in the business but to fully realise the potential of this Budget other stakeholders such as iTaukei Land Trust Board (ITLTB), Lands Department and the banks will need to work hand in hand.”

These are comments from a few people; there are many like them who have seen the opportunities this Budget provides and have embraced it.

Edited by Naisa Koroi

Feedback:  jyotip@fijisun.com.fj

Fijisun E-edition
Total Excellium
Subscribe-to-Newspaper
Fiji Sun Instagram
Subscribe-to-Newspaper