“Fiji’s Budget ‘looks good’ but..”- Fiji Economist

RNZ, Auckland, June 30, 2018

The Fiji budget contains ‘look good’ policies which will not address people’s concerns about the cost of living, an economist in Fiji says.

Grants for new-borns and first time house buyers as well as increases in parental leave are among some of the new initiatives in the national revenue raising and spending plan announced on Thursday (June 28) night.

There is also insurance for Fiji’s 100,000 civil servants, free bus fares for the elderly, subsidised treatment for diabetics and removal of the five percent tax on imported fruit and vegetables.

The F$ 1000 parenthood assistance grant and up to F$ 15,000 for house-buying assistance were only one-offs for certain sectors, according to Neelesh Gounder an Economist at the University of the South Pacific in Suva.

Not the bigger picture

“They are “look good” policies but they will certainly not be able to address the bigger challenges related to cost of living,” he said.

The government also announced relief for sugar cane growers with a stabilisation fund of $85 a tonne.

The industry supports about a fifth of Fiji’s population and has been hard hit in recent years by cyclones and rising costs.

“While it is in a good direction, my estimate is it will need somewhere around $95 to $105 to provide an incentive for farmers to keep farming,” Dr Gounder said.

Just over a fifth of the $F 4.6 billion budget is towards education.

Quality assurance needed

Dr Gounder said that was well-deserved but the government would have to ensure the spending was also high quality.

“There is some allocation for curriculum review and I hope the focus on curriculum review is improving teaching standards and so on.”

He suggested unattained asset sales were to blame for a constrained election year budget.

“I guess they are realising that, so that’s why probably the growth in expenditure relative to revenue has slowed down compared to the 2014 financial year,” he said.

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Photo Caption:

  1. The Government House, Fiji
  2. Operating and Capital Tax Expenditure

(Picture and Table from Fiji Budget Kit 2018-2019)

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