Editorial: ‘A Kick in the Gut When We are Already Down’

In my opinion, the public outcry against the Fiji Parliament awarding itself a huge pay increase is not over by a long shot.

These arrogant issues tend to have long tails.

I likened how the public feel about this issue to a government kicking us when we are already down.

The pain may not last long, But the feelings of betrayal, indignity, and unfairness cuts deep and takes a long time to fade away.

The leader of the pack, the Prime Minister, has started the fightback against the public outcry.

He said that the Parliament has made the decision, and his Government will implement it.

What the PM was really saying was that he and his Government will not listen to the people.

The PM was also quoted in the media as saying that he did not care if the voters abandon him and his party in the 2026 elections.

By the next elections, the PM will be sitting pretty having amassed his higher salary, perks, and travel allowances.

It will be time for him to step down anyway.

In summary, perhaps the PM does not care because he is on his way out whistling all the way to the bank.

But what about his troops?

Does the PM care for their re-elections?

Obviously not.

It is a very brash thing for a leader of a government to throw his party and other parties in the coalition under the bus.

Conclusion 1:

The PM will step down after this term having accumulated a lot of dough for his retirement.

Logic of the salary increase.

Let us look closely at the logic of the recommendations of the Emoluments Committee.

That is easy to do, because, in my view, there was no logic.

It appears that the main argument of the Committee is that the current salaries of Parliamentarians do not adequately reflect the importance of the decisions that they make.

Now, how did the Committee assess this?

Easy, they did not.

It was an unsubstantiated and bias view of the members of the Committee who also stood to benefit from their decision.

Normally, when reviewing the importance of a position, the reviewer should consider two things—a) comparators, and b) whether the job size has increased.

We all know that the Committee did not do such a comparison.

In addition, the job sizes of the Parliamentarians have not changed.

One can argue that with each Minister having the luxury of an Assistant Minister, their job sizes have reduced.

Conclusion 2:

The Committee is wrong in basing the pay rise on the importance and the size of the jobs of Parliamentarians.

The job sizes of the Ministers have decreased because of the appointment of Assistant Ministers.

National context and ability to pay

The Committee did not assess the wider national context and the ability to pay.

In any credible salary review, this countervailing background is essential information.

Clause 10 of the Parliament Remuneration Act requires the Committee to consider this countervailing information.

I believe that nobody does not know, let alone our politicians, the difficulties that the people are facing.

We have not fully recovered from the worst global disaster in history of COVID.

The families are struggling.

Many workers have had no increase in wages.

Employers are still recovering from the impact of COVID.

The cost of living continues to rise.

In our calculation, over 35 per cent of the population are living in poverty.

If the Committee had taken this information into consideration, they would have no choice but to recommend that this is not the right time to be increasing the salaries of parliamentarians.

Very importantly, the Committee did not assess the ability to pay.

They assumed that since it is Government, it can afford to pay.

This is naive. Government is like any other employer.

Its income is not enough to pay for all its expenditures.

It therefore must borrow.

We know that the national debt is 80% of GDP and we must reduce the ratio by half.

This is a mammoth undertaking that will take years.

The Committee completely failed to analyse these important issues.

On the cost of the salary increase, the PM said it was only $8.1 million implying that this was a drop in the ocean in a national budget of $4 billion.

This statement reflects the lack of understanding of economics and finance by the PM and the members of the Committee.

They failed to grasp the concept called “opportunity cost” which are the benefits foregone from spending more taxpayer’s money on parliament salaries.

So, what are these benefits foregone?

Someone calculated that the $8.1 million could have been used to recruit 506 additional police officers to fight the drug war, or 311 teachers to improve the quality of education, or 180 doctors to improve health care, or to build 36 health centers to cater for the rural areas.

From this perspective, and taking the multipliers into account, I calculate the opportunity cost of the increase in salaries as at least three times more than $8.1 million.

Conclusion 3:

In my calculation, Government cannot afford to pay the $8.1 million of the pay increase to Parliamentarians and the Committee may have breached the Parliament Remuneration Act of 2014.

Impact of the pay rise

The impact of this pay increase to the economy, employment, national debt, and fiscal stability is significant.

I recall my high school physics lesson of Isaac Newton’s third physical law which states that for every action, there is an equal and opposite reaction. In my opinion, the reactions to the pay increase will be:

a) Parliament has put in action a series of chain reactions that will seriously hurt the potential of the economy to grow and reduce poverty.

They have made it very difficult to reduce debt as a percentage of GDP.

b) Raise demand for pay increases by workers including the civil servants of similar percentages that the Parliamentarians have paid themselves.

This may lead to industrial unrest. In its mediation role, the Government will not be able to call for a wage restraint.

c) This Government has not done anything to moderate the rise in the cost-of-living. Instead, they worsened it by raising VAT to 15 per cent.

They have now institutionalised the higher cost of living.

Higher wages will lead to higher prices which will further raise the cost of living pushing more and more people below the poverty line.

d) The higher parliamentary wage bill will reduce public resources that would have been available for health, education, law and order, drug prevention, and social welfare.

e) The ultimate outcome is an upward structural shift in the cost of production across the economy which will reduce the competitiveness of our products including exports and reduce our potential to earn foreign reserves.

Conclusion 4:

The decision by the Parliament to pay themselves higher salaries will raise the cost of production, make our products more expensive, reduce our potential to create jobs, add to the difficulty of addressing priority areas like health, and make it difficult to lower our debt to GDP ratio.

These costs will be borne by the poor.

Lack of independence

In my view, the most shocking issue of all is that the Emolument Committee was made up of parliamentarians themselves.

This is like workers in an organisation determining their own pay.

To neutralise the lack of independence of the Committee, the Parliament should have referred the recommendations to a Sub Committee to undertake wide consultations.

By not doing this, the Cabinet had deliberately manoeuvred the processes for Parliament to pass the recommendations.

Conclusion 5:

We must strengthen the relevant laws to ensure that this does not happen again.

Voting list

The examination of the voting list in parliament is amusing.

All the PAP and the SODELPA members voted for the pay rise.

This was not surprising.

Many of them needed liquidity so they threw their election promises to the wind.

All but one NFP member voted against.

They were smart.

They look like angels to the public but still get the increase in pay.

If the NFP members are serious on their principle, they should not accept the pay increase.

What surprised many people was the split vote of the members of Fiji First.

I predicted that they would vote for the pay rise given that they had raised their salaries when they were in Government.

Obviously, the new FFP management wanted to change its image by ordering its members to vote against the pay rise.

However, the majority of 16 members thumped their noses at its management and voted for more money for themselves.

Five members abstained and three did not vote.

These parliamentarians might as well vote yes because the people can see through their flimsy camouflage.

Conclusion 6:

PAP and SODELPA think that they can take the hit now and use the next 2 years to recover before the elections.

Expect PAP and SODELPA to change their tune in 2 years’ time.

Time for a change

This is a sad day for the people.

There is no shame.

There is no logic.

This coalition Government promised us changes.

The faces in government have changed but it’s the same old, same old self-serving tactic.

I fully understand if the people feel betrayed by politicians.

Clearly, these parties have put their interest above the people.

It has happened too many times.

Where will this end?

Only we, the voters, can put a stop to these self-serving leaders.

We must stop Parliamentarians deciding their own pay.

We must change the law so that an independent committee be given this responsibility.

To allow all this to happen, we must legally remove the imposed 2013 Constitution in a court of law.

Final Conclusion: Voters must not make the same mistake again and consider very carefully whom they vote for in the next elections.

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