Budget-2021-2022

The 2021/2022 National Budget will be delivered by Minister for Economy, Aiyaz Sayed-Khaiyum on Friday 16th July.

The Fijian Government confirms that the budget address will be delivered at 7.30pm.

Sayed-Khaiyum is currently conducting virtual budget consultations.

Minister for Economy Aiyaz Sayed-Khaiyum had a virtual budget consultation with members of the Fiji Commerce and Employers Federation, Fiji Chamber of Commerce and Women in Business today.

Sayed-Khaiyum highlighted to the private sector the importance of promoting and encouraging their clients, business partners and customers to get vaccinated.

The participants also shared their views on the challenges caused by the current COVID-19 pandemic and provided recommendations for the upcoming 2021-2022 National Budget.

The discussions also focused on the current challenges caused by the COVID-19 pandemic and the way forward for businesses.

The 2021/2022 National Budget will be delivered by Sayed-Khaiyum on Friday 16th July at 7.30pm.

Attorney-General and Minister for Economy Aiyaz Sayed-Khaiyum is continuing to hold virtual 2021-2022 National Budget Consultations.

He met yesterday with various Market Vendors Associations from around the country and the Fiji/New Zealand, New Zealand/Fiji, Fiji/Australia, Australia/Fiji and Fiji/USA Business Councils.

A government statement says discussions at the consultations focused on meeting the national vaccination herd immunity target, working in a COVID-safe environment and creating business-friendly policies.

The consultation also allowed participants to discuss challenges caused by the current outbreak of COVID-19.

Sayed-Khaiyum has stressed the importance of working towards increasing the number of vaccinated citizens and keeping Fijians employed so that they are able to provide for their families.

The 2021/2022 National Budget will be delivered by Minister for Economy, Aiyaz Sayed-Khaiyum on Friday 16th July at 7.30pm

The Fiji Trades Union Congress says they oppose any suggestion by the Fiji Institute of Accountants to increase VAT to 12.5 percent, particularly at a time like this, and object to their suggestion that civil servants should have a salary cut.

FTUC National Secretary Felix Anthony says they also object to the Institute of Accountants’ proposal to take away family care leave.

Anthony says they are surprised and disappointed at some of the submissions made to Government by the Fiji Institute of Accountants.

Anthony says clearly, those that represent the institute are not in touch with the reality on the ground adding that we have the news media, social media, NGO’s, individuals and unions calling for assistance for families who have nothing to eat due to unemployment, lockdowns and poverty in the country.

Anthony says if the civil servants pay is reduced it will bring great hardship to thousands of families and reduce the purchasing power of these workers which would result in a decline in VAT collections and taxes.

He adds workers have mortgages, bills and other financial commitments to pay and many support extended families who are unemployed or dependents. On the issue of family care leave, Anthony says they remind the Fiji Institute of Accountants that family care is more important than work and that there needs to be a fair balance between work and family commitments.

He also says countries around the world are attempting to lessen working hours to achieve a work life balance and here we have FIA suggesting family care is too disruptive.

Anthony adds they remind FIA that the national budget is not only about numbers and balancing the books, it must be more about people, more so, at the current time when most people are barely surviving.

He says we must preserve the good that we currently have and build on them for a fairer Fiji.

In their budget submission, the Fiji Institute of Accountants have suggested that VAT be increased to 12.5 percent.

They say they appreciate that the Government has removed certain taxes in the last Budget and they are of the view that a further simplification and streamlining of the tax regime will facilitate compliance, tax collections and monitoring of taxpayers.

The institute says in this regard they suggest that consideration be given to removing the Environment Climate Adaptation Levy on turnover and increasing VAT to 12.5% adding this will give a broader tax base coverage and increase government revenue, while simplifying the tax regime by reducing the number of different taxes (which the Government has started doing last year with the removal of the Service Turnover Tax and stamp duty).

They say this will make compliance costs more manageable and allow business to focus on carrying out their business activities.

The institute further says they support the Government’s expenditure policy which is aimed at offering efficient Government services, developing infrastructure, and support and assistance to the needy.

It adds emphasis however needs to be placed on proper management and control of expenditure and improving efficiencies within Government, thereby maximising returns for each dollar spent and importantly getting it right the first time.

They say they commend Government’s initiative in increasing its level of capital expenditure and government should also invest in the maintenance of its assets to avoid substantial capital expenditure in the future in terms of replacement of assets due to lack of proper maintenance.

The institute suggests that Government consider making reductions in its operating expenditure where possible, particularly for non-productive areas and one of the key areas that may be considered would be to follow in the steps taken by the private sector and reduce the civil service payroll (which they understand is the Government’s largest expenditure item).

They suggest that this be reduced by 15% to 20% and the savings may be diverted to areas that have been discussed in their submission to create further economic activity and employment opportunities.

The institute says while they acknowledge the COVID-19 measure of reducing family care leave and paternity leave to 2 days per annum during the COVID-19 period, they believe that a review and re-design of family care leave is needed.

It further says this leave has caused substantial work disruption since no advance notice is required and businesses are not able to monitor the same adding that in this regard, they suggest that Government consider removing family care leave entitlement, as the employers may use their discretion to provide time off to their employees for this purpose.

Attorney General Aiyaz Sayed-Khaiyum today hosted a Development Partner Forum where development partners reaffirmed their commitment to helping Fijians mitigate and recover from the pandemic and further pledged their support for the 2021-2022 National Budget cycle.

Over 60 representatives from bilateral and multilateral partners attended the meeting virtually.

The forum discussed Fiji’s COVID-19 response, the upcoming 2021-2022 National Budget and strategic development cooperation.

Addressing members of the diplomatic corps and representatives of multilateral institutions, Sayed-Khaiyum conveyed the Fijian Government’s appreciation for the continuous timely support to our health and economic response.

Sayed-Khaiyum also provided an update on the targeted unemployment support provided to the formal and informal sector, provision of household packs to those in targeted lockdown areas and spending on other social protection initiatives.

In relation to the upcoming 2021-2022 National Budget, the Minister for Economy further highlighted priority sectors for investment in order to stimulate economic activity and employment creation.

Also present in the meeting was the Permanent Secretary for Health and Medical Services, Doctor James Fong, who shared an overview of Fiji’s COVID-19 clinical and public health response.

Doctor Fong highlighted key areas such as community awareness and supply of protective equipment.

The Fiji Government says various development partners commended the Government’s balanced strategy in mitigating the COVID-19 pandemic and providing socio-economic solutions to protect vulnerable populations.

The latest Westpac Wave Fiji Economic Update states that leading to uneven conditions across sectors halting Fiji’s economic recovery, they now downgrade their real Gross Domestic Product projection for 2021 to -4.2 percent from the 2.3 percent growth projected in April.

Westpac Fiji says this is based on the major assumption that international borders will remain closed throughout 2021, resulting in significant contraction in visitor arrivals and decline in all related sector of the economy.

Overall, the bank says the economic outlook remains highly uncertain.

Any recovery is determined in large part on how soon the second wave of COVID-19 infections is contained locally and the resumption of international tourism.

It says it is assumed that Fiji will achieve widespread vaccination of its target population and effectively contain the pandemic by the end of the year, hence substantially reduce new cases. However, the outlook is subject to considerable uncertainty.

Westpac Fiji says a more persistent pandemic, financial sector stress and any natural disaster could derail the recovery next year.

However it says with nationwide vaccination rollout gaining momentum, Fiji is expected to get the majority of the targeted population vaccinated by the end of the year.

Westpac Fiji says this coupled with the outcomes of the upcoming National Budget would reshape key parts of the economic landscape over the coming year.

It says they expect a much larger rebound in 2022 at this stage.

The bank says the COVID-19 vaccination rollout program provides some hopes for getting back on a growth track next year, and they now expect international borders to open post first quarter in 2022 with at least a travel bubble with Australia, New Zealand and the Pacific.

Westpac Fiji says based on those indications, they now project the Fijian economy to rebound by 14.5 percent in 2022, following a contraction of 2.4 percent this year.

They expect recovery across most sectors of the economy with major rebounds anticipated for accommodation and food services, net taxes, transport and storage, construction and real estate activities sector.

Westpac Fiji says the second wave of COVID-19 infections has rapidly increased in Fiji.

The report says the current outbreak remains primarily centred within the Lami-Suva-Nausori Containment Zone which happens to be the centre for economic activity in Fiji.

It says the Fijian Government has put in place various measures to contain the virus and although some restrictions have been relaxed to allow businesses to resume over the past weeks, the economic activity remains highly subdued.

The report says with hopes now on the 2021/22 National Budget that will play a major role in taking the economy forward, the Fiji National Budget is scheduled for release on the 16th of this month and is particularly important at the current juncture.

It says the bottom line for the upcoming budget would have to be to contain the COVID-19 pandemic in Fiji and its readiness for travel and tourism activity, preferably by early next year.

Westpac Fiji says the focus is expected to be job creation, particularly in tourism, unemployment benefits in terms of safety nets so long as the pandemic remains and the steps to fill the void of investment and consumption with a strategic and sustainable stimulus.

Fiji’s public finances have held up much better than earlier anticipated and Westpac expects the Budget to show smaller fiscal deficit (around 12% to 15% of GDP) compared to the 20.2 percent of GDP projected last year.

For the new fiscal year, however, it says the fiscal deficit is expected to be higher than the 5.0 percent target, particularly because the economy is no longer expected to rebound this year.

Additionally, to cater for the impact of the pandemic on Fiji, expenditure is expected to be propped up and revenue is still projected to be lower than anticipated earlier.

Dialogue Fiji says government should deliver an expansionary deficit budget and retain appropriate levels of state spending and deficit budget can be financed through offshore borrowing and support from donors.

In its budget submission, the civil society organisation says economic recovery will be incumbent on the government injecting money into the economy as this will ensure that there would be sufficient spending power of people to sustain demand when non-essential businesses open up after a prolonged term of closure.

Executive Director, Nilesh Lal says government will need to continue spending at pre-2019 levels however it should cut all unproductive expenditure which includes capital projects such as building of police stations, swimming pools, offices or residences of ministers or other state officials.

Lal says a salary cap of $100,000 on all salaries paid from the state coffers should be implemented and a 5%-10% pay cut should be implemented for those earning above $50,000. He says those earning below $50,000 should not be subject to any pay reductions.

He says Public Works Department should be restablished to re-skill and absorb laid off workers into the workforce, and to reduce outward transfers from the local economy due to engagement of offshore contractors.

Lal says given the economic realities, they strongly oppose any suggestions to increase VAT or any other taxation measure that will burden ordinary Fijians.

He says government should not consider any taxation measures that will burden businesses which are already struggling in an extremely difficult environment, regardless of how pressing the need to increase government revenue may become.

Dialogue Fiji adds any increases in VAT or tariff on common goods that Fijians consume will exacerbate poverty, and eventually increase the burden on the government’s welfare schemes leading to an overall negative outcome.

Lal adds $50 million should be allocated for rebuilding of homes damaged by TC Yasa and this injection of capital will also boost the Northern economy and create jobs in the construction sector.

Lal adds government should remove the 20 cents per litre tax on fuel as this tax was imposed at a time when the global crude oil prices had reached record lows but has since increased more than two-folds.

Dialogue Fiji has also submitted that government should consider impose a vaccine certificate for any movement outside homes to increase uptake of vaccines.

It has further submitted that government should make an allocation of $150 per week for income support to every worker who has lost their jobs for an initial period of 4 months.

Lal further says government should review grants to state-owned enterprises in non-critical sectors such as media.

He says for the longer term, government should consider selling of state-owned media companies as Fiji has a well-developed media industry and does not require a significant transfer of the state’s financial resources every year to run media companies.

Dialogue Fiji is calling for the removal of the 20 cents per litre tax on fuel.

Executive Director, Nilesh Lal says this tax was imposed at a time when the global crude oil prices had reached record lows but has since increased more than two-fold.

Lal says the higher fuel price is pushing up the cost of doing business and having an inflationary effect on consumer prices which affects demand negatively.

In its budget submission, the civil society organisation says government should increase the Ministry of Health’s budget allocation to 5% of GDP to ensure appropriate levels of resources are available to reduce mortality rate due to the pandemic.

Lal further says government should also negotiate another round of repayment holiday for home mortgages with banks, to save homes and negotiate a 6-month moratorium on repayments for loans to small and mid-size enterprises, with lending institutions.

He says soft loan facilities should also be established to support affected businesses.

Dialogue Fiji has further submitted that focus should be on growing existing sectors which have potential for immediate expansion and whilst agricultural sector has the greatest potential to expand, critical hurdles such as land tenure issues remain unresolved and unaddressed for years.

Lal says Fiji has failed to attract foreign investment into the sector which can bring in new skills and technology, and lead to the establishment of agricultural business which can do production at commercially viable and internationally competitive scales.

He says government needs to now exhibit willingness to engage in a national dialogue with relevant stakeholders and influencers, such as opposition political parties on the land issue and civil society organisations like them can play an important role in facilitating this.

The Reserve Bank of Fiji Governor and Head of the Macroeconomic Committee, Ariff Ali says the second wave of the coronavirus outbreak of the highly contagious Delta variant in Fiji has thwarted all chances of an economic recovery this year.

While speaking on the revised growth projections for the Fijian economy for 2020 to 2023, Ali says the localised lockdowns in Viti Levu, restrictions on certain economic activity and movement of people, and the mandatory “COVID 19-safe” operational requirements for many businesses have further curtailed economic activity and raised the cost of doing business.

Ali says the high unemployment and under-employment situation has worsened from last year, and Government finances have taken another hit, thereby further suppressing domestic demand.

He says given these developments, the economy is forecast to contract further by 4.1 percent this year, driven by the services and industrial sectors, which are expected to more than offset the positive contributions from the primary sector.

The services sectors include accommodation and food services, transport and storage, public administration and defence, financial and insurance services, real estate, health, information and communication, education and other services.

The industrial sectors include manufacturing, construction, mining and utilities.

The primary sector include agriculture, forestry and fisheries.

The latest assessment by the Macroeconomic Committee shows that the Fijian economy is estimated to have contracted by 15.7% in 2020, lower than the 19% contraction estimated earlier.

Ali says the improvement is reflective of the latest available data, which show that major sectors such as finance, wholesale and retail trade, transport and storage, accommodation and food services, construction and information and communication performed better than initially expected.

He says nonetheless, 2020 still represents the most severe economic contraction in Fiji’s modern history, as the collapse in visitor arrivals reverberated across the economy.

Economic recovery is dependent on the successful containment of the COVID outbreak and the re-opening of borders for tourism – Ali

IMF facility will further boost our foreign reserves by around $265 million in the coming months

The Reserve Bank of Fiji Governor and Head of the Macroeconomic Committee, Ariff Ali says Fiji’s economic recovery is dependent on the successful containment of the COVID outbreak and the re-opening of borders for international tourism.

Ali says Fiji’s economic growth is expected to rebound to 6.2% in 2022 and accelerate to 8% in 2023

The RBF Governor says as tourism activity stalled from last year, the negative knock-on effects were felt on overall economic activity leading to the deterioration in employment as well as business and household incomes.

Ali says this broad-based contraction in demand and economic activity also translated into lower tax revenue for Government, which also contributed to the negative GDP outcome for 2020.

He also highlights the contraction in the Fijian economy is consistent with most emerging and developing economies, especially tourism-dependent countries, where economic activity contracted significantly and will take some time to return to pre-pandemic levels.

Ali says for 2021, with no community transmission for almost a year, there were strong prospects earlier for positive growth this year as several economic indicators and business sentiments noted improvements.

He says from next year, economic recovery is expected on the assumption that the current outbreak is controlled, herd immunity is achieved through vaccination, and borders re-open towards the latter part of 2022.

Ali says while the economic recovery from next year is contingent on the resumption of tourism activity, visitor arrivals are not expected to return to pre-pandemic levels for some time.

However he says since the current outbreak has yet to peak and there remains considerable uncertainty on its future evolution and impact on Fijian lives and the economy, the economic outlook could deteriorate further.

Ali says the balance of risk to the current economic outlook is heavily tilted to the downside.

These include further delays in controlling the recent outbreak of the virus locally, inability to achieve herd immunity, the persistence of the virus globally (especially amongst our major trading partners), and further delays in the resumption of tourism activity.

Ali says the ongoing threats from natural disasters and the recent upswing in commodity prices constitute other downside risks. He says given the economy’s precarious outlook, economic recovery is critically dependent on the successful containment of the outbreak in the near term and the re-opening of borders for international tourism as local conditions allow.

Ali says a large part depends on achieving herd immunity by ramping up our current vaccination efforts.

He says it is encouraging to note that around 50% of our adult population have already received the first dose of the vaccine.

The Macroeconomic Committee says based on the current inoculation trend, Fiji will be close to herd immunity by the end of October this year.

Ali says it is therefore critical that macroeconomic policies remain geared towards adequately resourcing the health and other frontline agencies to contain the pandemic whilst at the same time ensuring adequate social protection for households impacted by the outbreak and the containment measures.

He says in addition, carefully re-opening businesses within the required health and safety parameters is also crucial for maintaining jobs and livelihoods.

Ali says in contrast to the challenges faced by the pandemic in the real sector, Fiji’s external position has improved substantially.

Foreign reserves are currently just over $3.1 billion and sufficient to cover 11.1 months of retained imports of goods and services and have been boosted by lower imports; increased personal remittances and official aid; external borrowing by the Government; and the sale of Energy Fiji Limited’s shares.

The committee says the recent announcement by the International Monetary Fund to distribute US$650 billion to its members through additional Statutory Drawing Rights allocations will further boost our foreign reserves by around $265 million in the coming months.

It says as a result, foreign reserves are projected to remain at comfortable levels over the medium term.

The Macroeconomic Committee is made up of Heads and senior representatives from the Ministry of Economy; Fiji Bureau of Statistics; Ministry of Commerce, Trade, Tourism and Transport; Office of the Prime Minister; Investment Fiji; Fiji Revenue and Customs Service and the Reserve Bank of Fiji.

The Fiji Institute of Accountants says their suggestion of reducing the pay of civil servants does not mean they will lose their jobs.

While responding to questions by Legend FM News, the Institute says all sectors of businesses have in one way or another resorted to pay cuts or reduced hours to survive during this time and employers, where possible, will ensure that their employees are at least earning a wage, even if reduced, to be able to provide the basic needs for their families.

They further say while the tourism and hospitality sectors may have completely laid off employees, others are on a reduced salary or reduced work-week. The Institute adds to this end, we need to change the narrative and also consider those in our communities who have actually lost their jobs and who also have commitments but now have nothing to fall back on and are really struggling.

It says in this way, funds can be diverted to provide assistance to those groups of people, while civil servants still have their jobs, albeit at a reduced rate.

On the issue of increasing VAT to 12.5 percent, the FIA says VAT is a broad-based tax, most VAT revenue is derived from the higher income earners due to spending patterns, and there are avenues that may be considered by Government to assist the disadvantaged, while increasing VAT to 12.5%.

It further says this will ensure that Government revenue is increased while still catering for the interests of the disadvantaged in the community adding that VAT is Government’s major source of revenue and is likely to reduce further due to the reduction in economic activity in Fiji.

They also say other revenue sources such as Income Tax are expected to reduce significantly, as the majority of businesses are experiencing reductions in revenue or huge losses from the impact of COVID-19 on our economy and the impact on revenue from income taxes is expected to carry forward into future years, as companies can claim and offset tax losses against its future taxable income.

It adds that government revenue from Customs Duty is also expected to reduce significantly following the unexpected reduction in duties for a wide range of items in last year’s Budget.

They say their submission included a suggestion to review certain import duties to provide assistance to local manufacturers, while increasing customs duty revenue for the Government.

The FIA adds Government revenue from ECAL has been affected due to the downturn in tourism and the hospitality sector and the question now is, where else can Government derive revenue to meet its expenditure and the needs of our people, especially those who have been badly affected by COVID-19.

The FIA says it should be noted that their submissions take a holistic approach and covers Fiji’s broader economic situation, while considering any immediate changes required.

They add it takes time, sometimes years, to bring about reform and for example, their submissions over the years had advocated for the simplification in the number of taxes, and they had called for the removal of Service Turnover Tax and Stamp Duty, and the reduction in Departure Tax.

They say after a few years of advocating for this, the Government made the decision to remove / reduce these taxes last year.

Minister for Economy, Aiyaz Sayed-Khaiyum will deliver the 2021/2022 National Budget address at 7.30pm on the 16th of July.

With the 2021/2022 National Budget set to be announced on the 16th of this month, Minister for Economy Aiyaz Sayed-Khaiyum has made it clear that government will not reduce any of the designated allowances in the poverty benefit schemes in the upcoming financial year.

Sayed-Khaiyum has also stated that of the $59.2 million budgetary support given by Australia, $31.1 million was specifically for Social Welfare support.

The Attorney General also hosted a Development Partner Forum last week where development partners reaffirmed their commitment to helping Fijians mitigate and recover from the pandemic and further pledged their support for the Budget cycle.

Over 60 representatives from bilateral and multilateral partners attended the meeting virtually.

Addressing members of the diplomatic corps and representatives of multilateral institutions, Sayed-Khaiyum conveyed the Fijian Government’s appreciation for the continuous timely support to our health and economic response.

Sayed-Khaiyum also provided an update on the targeted unemployment support provided to the formal and informal sector, provision of household packs to those in targeted lockdown areas and spending on other social protection initiatives.

More than 80,000 Fijians are currently benefiting from the government’s Social Welfare Programs.

This includes around 43,909 people being assisted through the Social Pension Scheme, 22,450 families being assisted through the Poverty Benefit Scheme, 7,815 people being assisted under the Care and Protection Scheme and 8,716 people who are receiving Disability Allowance.

Minister for Women, Children and Poverty Alleviation Mereseini Vuniwaqa says these are ongoing programs which have not been affected by COVID-19.

The Ministry was allocated $159.0 million in the 2020/2021 National Budget.

They will also continue works to promote gender equality and women’s empowerment by mainstreaming their participation in Fiji’s socioeconomic development which is driven by the implementation of the National Gender Policy and the Women’s Plan of Action to better promote gender equality.

Removal of VAT from basic food items is one of the main submissions made by the Fiji Council of Social Services for the upcoming National Budget.

Executive Director, Vani Catanasiga says they can see from the last few months that access to food is a challenge particularly for vulnerable communities.

Catanasiga says government will have to look at other areas to source revenue as people are finding major difficulties to provide basic food for their families.

Catanasiga says they have also submitted that government should seriously look at agriculture for food security and should facilitate agricultural land packages, diversification for agricultural support, educational programme for best agricultural practices with scholarships for studies and market access facilitation for agricultural produce.

Catanasiga says government should also provide alternative crops and their markets that can yield even a higher income than what people receive from marijuana.

She says finding a solution to this issue will ensure safety and security in the 223 communities in Nadroga and will also potentially create jobs.

Meanwhile, the Fiji Council of Social Services has also called for the activation of the Disaster Management Committee (DISMAC) to bring the full surge support currently missing from the Incident Management approach that Ministry of Health has been utilising since the beginning of the COVID-19 crisis.

Catanasiga says this will mean that all agencies and stakeholders including civil society will be able to collectively bring their resources, expertise and experiences from previous humanitarian events and build a whole of society response.

The Association of Banks and the Governor of the Reserve Bank of Fiji, Ariff Ali met with Attorney General Aiyaz Sayed-Khaiyum for their second meeting today to discuss initiatives for the upcoming 2021-2022 National Budget.

The heads of ANZ Bank, Westpac Bank, HFC Bank, Bank of Baroda, Bank of the South Pacific and Bred Bank participated in the meeting.

They will be having further discussions in a third meeting tomorrow.

The 2021-2022 National Budget address will be delivered by Minister for Economy, Aiyaz Sayed-Khaiyum at 7.30pm next Friday.

In the 2020/2021 National Budget, Sayed-Khaiyum had highlighted that as at that date they had worked with the financial sector to restructure over $3.4 billion in loans, freeing businesses and families from mandatory monthly loan repayments.

He had also announced that the Association of Banks had agreed to, on a case-by-case basis, extend loan deferments until 31st December 2020.

Loans have been further deferred this year on a case-by-case basis.

The Fiji Chamber of Commerce and Industry is calling for policies for longer term financing for businesses at reduced interest rates.

President, Doctor Nur Bano Ali says that’s what businesses need now.

She says finance is very restrictive to businesses and while they have so much liquidity in the market, businesses are finding difficulties to get finance at a reduced rate.

Ali says businesses are suffering at multiple levels where the cost of most of the businesses are the same and while they want to keep their staff employed, they are finding major difficulties as they do not have finance.

Ali says they have also submitted to the Ministry of Economy that there should be no change to all tax concessions and concessionary structures that were put in place for businesses last year.

Ali adds VAT should not go up as it is already difficult for people to access food. She says they know Government revenue is reduced however they will be able to sustain for another financial year through downsizing and cutting spending, similar to what businesses have done.

The Fiji Chamber of Commerce and Industry is also supporting Government's no jab no job policy.

Minister for Economy, Aiyaz Sayed-Khaiyum will deliver the 2021/2022 National Budget at 7.30pm this Friday.

The Fiji Taxi Association says they are hoping that the 20 cents per litre duty on fuel is reduced in the 2021-2022 National Budget as fuel prices have gone up by about 50 cents a litre in the past 6 months.

Association General Secretary, Ashwin Lal says the taxi industry is in a very bad state right now as people are scared of the COVID-19 virus and are not travelling in taxis.

He says taxi operators could get some relief if the duty on fuel is reduced.

Lal is also hoping that the review of fuel prices is done on a quarterly basis and not on a monthly basis as is currently being done.

He has also highlighted that the Association has had discussions with the Minister for Economy and have made suggestions to remove import duty on vehicles, vehicle parts and accessories and tyres.

The Government in the 2020-2021 National Budget had reduced the import duty by 75% on hybrid cars and non-hybrid cars and reduced fiscal duty from 15% to 5% on new cars. Excise duty was also removed on all non-hybrid cars.

The Association Secretary says another issue being faced by the taxi industry is that many people are using their private vehiclesand are operating illegal taxi businesses.

He says they have made suggestions to the Government to deregister vehicles and implement heavy fines on vehicles that are operating illegally as a taxi.

Lal is also urging people to get vaccinated and says they should not believe in rumours about the vaccine causing magnetism.

The 2021-2022 National Budget will be announced on 16th July at 7.30pm.

The Fiji Labour Party has rejected any moves to increase VAT in the upcoming 2021/2022 National Budget.

In its submission on the budget, the Fiji Institute of Accountants has proposed that VAT be raised to 12.5 percent and that the 5 percent Environment and Climate Adaptation Levy be scrapped.

However Labour Leader Mahendra Chaudhry says this is not the time to increase a tax which will penalize the poor considering the widespread hardship and suffering inflicted by the COVID-19 crisis.

He says a better option would be to remove the 9% VAT, imposed in 2016 on basic food items as this would provide appreciable relief in these difficult times.

Chaudhry says scrapping the ECAL in return for a 2.5% increase in VAT, is not a fair exchange, as the levy applies to tourism related businesses, coffee shops, restaurants etc with an annual turnover of $3 million or more.

He questions how many of our poor people and those disadvantaged by COVID, some 75 percent of the population, are likely to benefit from the removal of ECAL.

Chaudhry says the focus right now should be on the suffering people, making their lives bearable and on containing the exponential increase in the spread of the COVID virus.

He says Government’s figures released in February 2021 show 115,000 workers have either been made redundant or were working on reduced hours, comprising one-third of the workforce.

The FLP Leader says some 40,000 workers were reportedly laid off from the tourism industry alone.

Chaudhry says this situation worsened in March when the accelerated rate of the virus led to the imposition of border containment zones and lockdowns, particularly in the Central Division.

He says businesses and factories had to close down, and thousands more were deprived of their jobs and weekly pay checks.

Chaudhry says the prevailing highly depressed socio-economic conditions caution against any fiscal measures which will fuel inflation and add to the problems of the ordinary people, as well as businesses.

He says raising VAT will mean paying more for food and other basics, water, electricity, communication, medicines and transport.

Chaudhry questions how can one justify raising a tax that will cut across all sectors of the economy, increasing the cost of goods and services and pushing the already high cost of living to new heights.

He says as it is, the unemployed have received very little assistance from the Government in terms of COVID-19 relief.

Chaudhry believes the majority of the workers have been pushed to fend for themselves by withdrawing their pension savings from the FNPF.

Attorney General and Minister for Economy Aiyaz Sayed-Khaiyum has reassured people that despite the situation the country is facing with the current COVID-19 outbreak, programmes that are important to youths, such as the Tertiary Education Loan Scheme and Toppers initiatives, would continue.

16,661 students are currently studying under the TELS program while 2,525 students are studying under the National Toppers Scheme.

In the 2020-2021 National Budget, the Government allocated $35.5 million for the Toppers Scheme while $161.1 million was set aside for the TELS program.

In this financial year, a major change was made to the TELS program where the Government increased the threshold for qualifying for TELS from 200 to 250 marks.

Education Minister Rosy Akbar stated last year this was done to encourage students to work harder and increase the quality of education.

Akbar has also previously stated that the National Toppers Scheme has always addressed areas of need and this will continue however these will be subjected to revision depending on the COVID-19 situation and how it develops both locally and internationally.

The Fijian Competition and Consumer Commission expects that consumer protection will be a key area of the 2021/2022 National Budget.

FCCC CEO, Joel Abraham says given the COVID-19 pandemic, the issues relating to consumer protection has increased.

Abraham says they will also like to see the continuation of the policies relating to price control as this gives consumers certainty that businesses will not overcharge them.

He further says they have noted that duty reductions announced for some items in this year’s budget have not been passed down to consumers.

The Minister for Economy Aiyaz Sayed-Khaiyum had announced last year that they were cutting customs duties on over 1,600 items.

He adds this is expected to be a very difficult budget given that the overall budget revenue has declined.

Abraham also says one of the challenges for them is at looking at online business activities given that a lot of it is now happening on social media which are largely unregulated.

He says there are businesses that are saying that goods once sold cannot be returned or no refund policy which is a deprivation of consumer rights which is entrenched in the FCCC Act.

Abraham adds the number of complaints have increased in relation to this.

Minister for Economy, Aiyaz Sayed-Khaiyum will deliver the 2021/2022 National Budget at 7.30pm this Friday.

The immediate focus of new Tourism Fiji CEO Brent Hill will be to work with Fiji’s health authorities to restore tourism activity which has been most affected since we recorded our first case of COVID-19 in the country last year.

Hill most recently was the Executive Director of Marketing for the South Australian Tourism Commission and brings over 16 years of experience in tourism and digital marketing.

He replaces former CEO Matt Stoeckel whose tenure ended in December 2020.

Minister for Tourism Faiyaz Koya says restoring tourism activity will not only restore jobs for hundreds of thousands of Fijians but it will also significantly contribute to the revival of the economy through the industry’s multiplier effect.

Koya says we are turning the corner now with the rollout of our national vaccination program in anticipation of market re-entry beyond our traditional markets.

He says this sets the scene for Hill and Tourism Fiji to position Fiji as the ideal destination for those that are ready to travel.

Koya says with Hill at the helm of Tourism Fiji, we are a step closer to strategically positioning Fiji in the global market again.

Thousands of Fijians in the tourism sector have been unemployed for over a year with majority of the hotels and resorts closed. According to the 2020 ANZ Research Pacific Economic Outlook Fiji Report, tourism revenue fell from $1.9 billion in 2019 to $308 million in 2020 which is a decline of about 84%.

Tourism Fiji was allocated $25 million in the 2020/2021 National Budget.

Government had also removed the 6% Service Turnover Tax and reduced the Environment and Climate Adaptation Levy from 10% to 5% to make hotels and resorts in Fiji more affordable.

Minister for Economy Aiyaz Sayed-Khaiyum had said that a market survey has shown that Fijian resorts and hotels can be overpriced and as an immediate effect of these tax cuts, they expect the price structures for rooms, food, alcohol to drop.

Sayed-Khaiyum will deliver the 2021/2022 National Budget at 7.30pm this Friday.

The Fiji National University Students Association is calling on the Government to invest more in the digital platforms, especially to assist tertiary students who are now studying online from their homes.

President, Ketan Lal says the Government should also increase their coverage of digitalFIJI Wifi to villages and remote areas where network and data services are limited.

Lal says students also need assistance like recharge cards.

He says while the FNU has put a free platform for online classes, students also need to go to other websites to do their research.

Lal says the student body would be grateful if the Government could to talk to telecommunications providers as there are a lot of internet issues.

Minister for Economy, Aiyaz Sayed-Khaiyum will deliver the 2021/2022 National Budget at 7.30pm this Friday.

Programs like free education and the bus fare subsidy are expected to continue to receive appropriate funding in the 2021-2022 National Budget despite the current circumstances.

However, this will be all be linked to how and when schools will be safe for re-opening and how much funding will be needed to ensure both students and teachers are able to effectively learn and teach from home with the necessary resources if the current situation continues.

There is also expected to be targeted assistance for schools still recovering from Tropical Cyclone Yasa although Australia has already stepped in to provide relief in that area in this financial year.

This was in the form of a grant of $19.7 million grant for the reconstruction of 9 schools damaged by TC Yasa in the Northern Division.

These schools are Lekutu Secondary School, Lekutu District School, Nukubulu Primary School, Maramarua District School, Dreketi District School, Bua District School, Dama District School, Wailevu West District School and Ratu Luke Memorial School.

In this financial year, there was a reduction in the free education grant and 13,000 plus teachers were not subjected to any pay cuts.

It was also announced that salary increments for teachers who obtain new qualifications will now be approved and paid in the next financial year.

As announced last year, those pay raises will be backdated.

The Ministry of Education was allocated $450.6 million for this financial year and despite the reduction, Education Minister Rosy Akbar made it clear that the focus will be making sure the quality of education is not compromised.

The Fiji Trades Union Congress is again pushing for the minimum wage rate to be increased to $4 an hour and the National Secretary, Felix Anthony also says they do not want salary cuts for civil servants, no increase in VAT and removal of VAT from essential food items.

While making their 2021/2022 National Budget submission to the Minister for Economy, Anthony says they firmly believe that the current minimum wage condemns workers to extreme poverty and in no way meets the test of decent work.

He says they also do not believe the justification to keep minimum wage well below the poverty line to save jobs.

Anthony says the FTUC has campaigned for a $4 minimum wage for some years now. He says while this may still be below the poverty line, they believe this may be a good place to start and that a review be undertaken annually with a view to ensuring a living wage where no one should earn below the poverty line and enjoy a decent standard of living.

Anthony says they also propose that VAT be removed from essential food items which can be listed and can be offset from luxury items.

He says this is to ensure that ordinary people have access to basic food items which are affordable, more so, at a time when a good number of people around the country are either unemployed or under employed.

Anthony says they do not agree to the proposal made by the Fiji Institute of Accountants to increase VAT on all items.

He says they also do not agree with FIA’s proposal to cut salaries of civil servants.

Anthony says they note that the normal merit increments for the civil service as per the Government’s own Remuneration Guidelines implemented in 2017 have not been paid.

He says they note that rural allowance and acting allowances for teachers have not been paid for about 2 years now.

The FTUC National Secretary says they believe that there can be meaningful savings if Government acted seriously on the wastages exposed in the Auditor General’s Report.

Anthony says they also note that Government Ministers and Permanent Secretaries have had a massive salary hike of upto 300 percent some years ago.

He says they never believed that was necessary nor justified.

Anthony says they would like to suggest that substantial savings could be made if contracts that are entered into with private contractors are scrutinized more thoroughly and, managed efficiently and transparently to ensure quality deliveries.

Meanwhile Anthony says there have been widespread job losses due to the pandemic across many industries. He says this is particularly very serious in the hotel and tourism industry.

He says while the Government has stated that millions of dollars have been given, they do not believe it has been sufficient.

Anthony says they have exhausted their FNPF funds with nothing or little left for a decent retirement. He says they have also decried the Government’s policy of reverting to members’ FNPF savings in times of crisis.

He proposes propose a special Fund be set up where Government budgets a meaningful amount to be set aside for such eventualities.

Anthony says the $50 assistance is really no assistance at all and to make it worse, people have had to queue for long periods to collect their money.

He says there needs to be some dignity in these processes.

The FTUC says we do not need to make our people look like beggars for a $50 grant.

Anthony also says the current wave of coronavirus that we are experiencing is not an act of God but rather the negligence of some of our own people and what he calls the Government’s inadequate response from when this wave started in Nadi in early April.

He says they have witnessed that employers are taking advantage of the current crisis to reduce terms and conditions of employment, many of which had been negotiated and agreed to decades back and had served well.

Anthony says they note that Government has given much assistance to Fiji Airways to survive but ignored its workers completely.

He says when times were good, these very workers were the backbone of the company.

Anthony says in the budget submission to the Minister for Economy that they also propose that Government respects the workers’ contribution to Air Terminal Services and the fact that 49 percent of the company is owned by the workers Trust. He calls on the Government to reinstate the workers’ representatives, whoever they choose, to be on the Board so as to make the collective decision in the best interest of the company.

He says workers terminated by Water Authority of Fiji in May 2019 remain out of work and are awaiting their day before the Employment Relations Tribunal more than 2 years later.

Anthony says they propose that these workers be compensated either through redundancies negotiated with their unions or through Government grants.

Minister for Economy, Aiyaz Sayed-Khaiyum will deliver the 2021/2022 National Budget address at 7.30pm tomorrow.

Minister for Economy, Aiyaz Sayed-Khaiyum has stressed the importance of moving the economy and the country as a whole forward if Fiji reaches the 80% target to get the eligible population fully vaccinated.

While presenting the 2021/2022 National Budget, the Attorney General says they expect 80% of the eligible population fully vaccinated by 31st October this year.

Sayed-Khaiyum says Fiji’s vaccination target population over the age of 18 years is estimated at 586,651, and to reach the 80% vaccination rate, 469,321 individuals have to be fully vaccinated.

The Ministry of Health is provided with an increased budget of $403.3 million, which includes the hiring of additional 238 intern nurses, 140 medical interns, 114 doctors, 10 nurse practitioners and 43 midwives and a specific $25 million COVID-19 contingency fund.

The Minister for Economy says apart from this, there is an additional funding provision of $12 million for the supply of food and other essential items to those in quarantine and isolation and $5 million allocated for the engagement of private general practitioners to relieve pressure from the public health system.

He also says this means no jabs no tourism, no jabs no opportunities, no jabs no school and no jabs no future.

Sayed-Khaiyum says they are acting to protect everyone not please everyone.

He says with the Government revenue down, there is a freeze in hiring in the civil service however this does not apply to the Health Ministry and Police as they try to contain the virus.

Sayed-Khaiyum says if we achieve our vaccine target by 31st October, we will not only welcome back visitors from abroad but also spend Christmas with our loved ones.

He says progress is not always achieved in the public arena, and discussions continue on how to move forward.

The Minister for Economy says for the financial year 2021-2022, tax revenue collections are projected at $1.597 billion, 43.3% lower than pre-COVID levels.

He says compared to the 2020-2021 financial year, tax collections are higher due to lower estimated VAT refunds as large backlog of outstanding refunds were cleared in this financial year.

This higher collection is also based on the assumption that there will be some form of reopening of the borders in the first half of 2022, but arrivals are conservatively estimated at around 20% of preCOVID levels for revenue projection purposes.

Sayed-Khaiyum says it is important to note that the Government will also carry over around $150 million in cash balances to the new financial year. He says this provides an additional buffer in the event if tax revenues do not perform as projected.

Apart from this, non-tax revenue is estimated at $487.5 million.

The Minister for Economy says the Government will continue reforms with further divestments planned for Amalgamated Telecom Holdings Limited, Fiji Airports Limited and some other small entities.

He says this is expected to generate around $150 million in non-tax revenue.

Government is also in discussion with a number of development partners for more budget support grants which is conservatively budgeted at around $116.3 million.

Based on the assumptions, the total revenue for 2021/2022 National Budget is projected to be around $2.1 billion. This includes tax revenue of around $1.6 billion and $488 million in non-tax revenue including grants and divestment of shares.

On the expenditure front, Sayed-Khaiyum says reductions have been made in operational expenditure across Government, including a freeze in civil service recruitments and reductions in other current expenditures.

However, new expenditure demands have been catered for to provide targeted assistance to those unemployed and vulnerable, and fiscal support provided to businesses and the tourism industry to sustain themselves before the borders open up.

The total expenditure for the next budget is around $3.69 billion.

Government debt is projected to be around $9.1 billion or 91.6% of GDP by end of July 2022.

However, the Minister for Economy says as seen in this financial year, it is likely that actual debt could be lower than projected if border reopening and pick up in tourism and other sectors are much stronger than anticipated.

The government has announced that it will provide a monthly data top-up of $20 per month to domestic university students and Year 13 students to assist them in their online studies.

It will partner with Amalgamated Telecom Holdings for this initiative.

Minister for Economy Aiyaz Sayed-Khaiyum says due to the pandemic, the 25,983 domestic students across three universities in Fiji are currently attending classes and having examinations on online platforms.

He says there are also over 8,000 Year 13 students that need access to data to undertake research for their studies.

Sayed-Khaiyum says the data provided to students will only be available during the semester and school-term periods but the data can be used however students like.

He says they prefer that students don’t waste it all watching dance videos on TikTok.

The Government will contribute $100,000 with the rest provided by ATH.

The Executive Director of Dialogue Fiji Nilesh Lal is calling on all Fijians to play their part and get vaccinated to ensure the Government actually has the capacity to execute the 2021/2022 National Budget.

He says the budget is a brave and bold budget delivered during an extremely difficult period for the national economy, which is aimed at creating incentives and providing targeted relief and assistance to individuals and businesses affected by the ongoing pandemic.

Lal says the budget is commendable because it was developed in extremely challenging and uncertain times.

He says when evaluating the stimulus policies, it is important to see whether it will be able to boost spending quickly, achieve a large increase in spending in the short-term with minimal impact on the people.

He adds the $200 million unemployment benefit and the additional $200 million soft loan facility for businesses will boost spending immediately and this is needed in the short term.

However, he further says its impact may quickly evaporate once the Government withdraws its support.

The Executive Director says the announcement of other initiatives, and the continuing of those from the last budget, are also expected to contribute to economic recovery now, but may not be sustainable in the long term.

He says they have noted that the Government's ability to implement a $3.69 billion budget depends on its capacity to raise revenue at appropriate levels.

Lal says there is considerable doubts amongst commentators on whether the Government would be able to generate the projected revenue of $2.085 billion in the new budget given the prevailing economic circumstances.

He says this, however, provides optimism in the fact that the Government was actually able to collect more revenue in the last fiscal year than was projected despite the subdued economic activity in the last quarter due to the second COVID-19 outbreak.

Lal adds that they also noted that the Ministry of Economy is basing its projections on the assumption that herd immunity will be achieved once 80% vaccination coverage is achieved.

He says this is a flawed assumption that is not informed by the prevailing scientific opinion and any estimates which are based on this assumption will likely not hold true whether these may be allocations for health care delivery or projections of revenue from international travel and tourism.

He further says this requires the concerted effort of every Fijian, like never before as economic recovery is incumbent on our ability to contain the current outbreak in the shortest possible time.

Lal says an extra day of the outbreak does additional damage to the economy and compromises the future of our children.

He adds this is why everyone needs to get vaccinated at the earliest and practice COVID-safe measures to contain the spread of the virus.

He says vaccination is the only way to contain the outbreak, given its widespread prevalence in the community.

Lal says the next few months will require every Fijian to do their part in ending this outbreak so that economic activity can return to its former levels or otherwise, painful budget cuts and other strict measures will become unavoidable.

The Executive Director of Dialogue Fiji says the state does not have limitless capacity to drive the economy and overall, the budget has endeavoured to cater for the needs of various sectors of the economy.

He also stated that it is pleasing that the submissions of different stakeholders have been reflected in the budget allocations.

SODELPA Leader Viliame Gavoka says the article by FBC News titled “SODELPA Leader backs budget” published on Saturday was misleading and selective while FBC is standing by the story.

He says he would like to clarify and reiterate that he as party leader as well as SODELPA have not given their support for the 2021-2022 National Budget.

Gavoka says it is unfortunate that various media outlets fail to carry out due diligence in publishing stories particularly on issues of critical importance that impact the nation.

Gavoka says what he told FBC was that the Opposition had been advocating for demand to be created for the economy to pick up.

He says this is to put money in the hands of the people, not by handouts, but by putting money into economic programs that can help people engage in economic activities.

Gavoka says to say that he is supporting the budget is taking it a bit too far.

He says SODELPA will be scrutinizing next week in detail what the 2021–2022 budget means to the people of Fiji.

Gavoka says they will be firing many questions that need to be asked and answered during the upcoming budget debate.

In response to the statement by the SODELPA Leader, the Fijian Broadcasting Corporation says they stand by the story and they only reported what was said by Viliame Gavoka.

Fiji Development Bank Chief Executive Officer, Saud Minam has welcomed the 2021-2022 National Budget, saying it is courageous, echoes compassion, and is fit-for-purpose.

Minam says it is a much-needed boost to support FDB’s own efforts, in fitting in the existing support framework for its customers affected by the pandemic, by providing a platform for businesses to sustain themselves during these trying times.

He says the $200 million cash injection to Micro, Small and Medium Enterprises sector (MSMEs), which could be accessed through FDB, fully subsidized for two years, is an enormous commitment by Government for the resilient recovery of Fijian businesses.

Minam says under this initiative when businesses take a loan from FDB, ranging between $10,000 and $100,000, they will not be repaying anything to the Bank for two years and it will be an interest-only loan for that period that the Government will pay on behalf of the business.

He says from the third year, after two full years of cushioned recovery, the businesses can start repaying their loan.

Minam says this budget provides the needful stimulus for a resilient economic recovery by addressing the most wideranging socio-economic aspects of Fijian’s livelihood and safety, as well as the financial burdens of businesses that continue to grapple with the impacts of the pandemic.

He says it is a shot in the arm for our MSMEs, an important sector that supports close to 60 percent of Fijians in job, and their agriculture customers.

FDB Chairman Andre Viljoen says another good news is for their largest customer-base, agriculture. He says with the Government increasing its interest-rate subsidy for agriculture loans by FDB from 6 percent to 8 percent and increasing the loan limit for the subsidy from $50,000 to $100,000, their customers will pay less.