The budgetary assistance given to Fiji by the Australia and New Zealand Governments is not extra cash lying around, says Attorney-General and Minister for Economy Aiyaz-Sayed Khaiyum.

He made the clarification in Parliament while responding to National Federation Party Member of Parliament, Lenora Qereqeretabua, yesterday.

Ms Qereqeretabua asked Mr Sayed-Khaiyum on how the $115 million budgetary support by Australia and New Zealand will be spent by the Government on direct cash assistance to families affected by the COVID-19 pandemic.

Mr Sayed-Khaiyum said close to $31.1 million of Australia’s $59.2 million assistance was directed towards the financing of the following schemes: Social Protection Scheme, Poverty Benefit Scheme, Care and Protection Allowance, and Disability Allowance through the Ministry of Women, Children and Poverty Alleviation.

He added that Government was still in the process of facilitating the transfer of funds from the New Zealand Government.

“Every year in the formulation of the Budget, there would be a deficit which has to be funded by borrowing,” he said.

“When a development partner provides budget support, they are helping us to fund existing programmes, announced in the Budget.  So that’s what we fundamentally do when we get budget support.

“This essentially means the projected debt level at the end of the Financial Year 2021 will be lower than expected.

“These grant funds will displace the loan funds that Government would have had to borrow in order to fund the current programmes.

“So debt levels go lower, because we are not going out and borrowing as much as we said we would, because this funding actually has come into the system.  That means we don’t actually have to borrow.”

Mr Sayed-Khaiyum had also mentioned that Government had directly spent more than $200 million amid the pandemic with close to $160 million so far has been paid out in unemployment benefits, $30 million in the concessional loans and $10 million in the M-PAiSA grant for households.

He said the question demonstrated a fundamental lack of understanding of how government finances work, and how budget support works.

He added that after a dedicated practice of good governance and good financial management, the Fijian Government provides regular reports to development partners indicating how funds have been used, and to give assurance that funds are being utilised.

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