Previous Governments Left Intergenerational Debt: A-G

“Debts are inherited from previous Governments.
11 Mar 2022 12:37
Previous Governments Left Intergenerational Debt: A-G
Attorney-General and Minister for Economy Aiyaz Sayed-Khaiyum.

Previously Governments used to borrow money to pay for operating expenditure.

However, the FijiFirst Government has focused its borrowing on capital projects.

This includes connecting people to electricity, roads, bridges, jetties, nursing stations and the focus has been on new construction, expansion, renovation, or replacement project for an existing facility or facilities.

Attorney-General and Minister for Economy Aiyaz Sayed-Khaiyum stressed this during face-to-face consultations for the revised 2021-2022 National Budget at the Nadi Civic Centre on Wednesday.

“When somebody talks to you about debt in Fiji, we need to understand what the cost of the debt is and what we’ve been doing; the PS and the team, we’ve been looking at all the debts some of the debts we’ve inherited,” he said.

“Debts are inherited from previous Governments.

“So, there was a debt by the Alliance Government, and it went to the four weeks of Doctor Bavadra-Government then from him it went to the Rabuka-Government five years of decree-led government then it went to the SVT-Government then it went to the one-year Labour-Government then it went to the SDL-Government.

“So, some debts along the way get completely paid they also accumulate debts it keeps on passing on.

“But for us what is critical, is that the debts they inherited did they borrow money to do things or did they borrow money for operational costs.

“We know the collapse of the National Bank of Fiji when Rabuka was Prime Minister, the Fijian Government has had to go out and borrow more money.

“It’s the failure of that bank that has resulted in what we call intergenerational debt,” he said.

“So, we of course, are trying to realign our debts to make sure we get cheap interest rates the cost of debt are not that significant.”

He said the COVID-19 pandemic has caused the Government to increase its borrowing in order to ensure members of the public received sufficient assistance.

“Normally there’s a difference between your revenue and expenditure that’s what you call a deficit,” he said.

“The trick is to make sure that deficit is low, not blown out of proportion and the other trick is, of course, is to ensure that when you borrow money you should borrow money to build things; you don’t borrow money and you don’t have anything to show for it.

“So, of course, with the pandemic, we did have to go out and borrow because our revenue is gone, 50 per cent is gone and we still have to pay social welfare, we still have to pay for free education, everybody still complains about potholes, everybody wants water.

“So it’s a balancing act, we still do TELS, we still do toppers, all those things need to be catered for so we went and actually borrowed money also and our deficit, of course, increased.”

He said the Government had to also maintain the $3.7 billion public expenditure.

“Our wages bill for Civil Servants including the Police, the military, corrections officers and all the civil servants you see, including doctors and nurses is $1.1 billion, that’s our wages bill so out of the $3.7 billion, one third of that is for wages and the rest of course is the other operational expenditure, including capital expenditure,” he said.




Advertise with us

Get updates from the Fiji Sun, handpicked and delivered to your inbox.

By entering your email address you're giving us permission to send you news and offers. You can opt-out at any time.