50,000 and Counting

The recent TOPEX conference featured more talk about the impact of the exodus of Fijian workers to Australia and New Zealand. Permanent Secretary Finance, Shiri Gounder, suggested that around 50,000 Fijians left our shores for employment over the last two years. To put that in perspective - that is close to 15% of our total work force and it isn’t slowing!!

As we take a breath over the festive season, our leaders need to spend some time contemplating the impact of this massive shock to our society. You see it is a lot more then training replacements and /or recruiting Bangladeshi, Indonesian and Filipino workers to replace them.

YB is already hearing from the retail sector that spending patterns are changing with reports of big-ticket item sales dropping and increased spending on consumables. That makes sense, combine the removal of a significant portion of higher end wage earners and a similar size group saving as they wait for their visas, and you can expect an impact on retail spending.

Ahh but as the Reserve Bank reports, remittance money is flooding into the country. Yes that’s true apparently over $100 million arrived in October alone (that’s nearly three times from previous levels) but this appears to be largely being spent on cheaper consumables, after all why invest in a home, a car etc etc when you’re not living here or waiting to leave.

Ah but you say what about those migrant workers coming into the country. Well unless they’re given some kind of pathway to residency their prime focus will be either to send money home or to save for the day when they can move on to our neighbours as well.

But surely all that remittance money is good news right???? Well, kind of. Fiji is already struggling with dependency syndrome. This is when citizens get so hooked on hand outs and other people taking responsibility for their survival that they figure there isn’t much point working for a living. YB has been chatting with some major employers lately and they all made the same observation. Whenever there is an increase in the minimum wage, which ripples upwards to all workers, there is a significant increase in absenteeism! As for any desire to earn extra via over time, forget it.

When YB first heard this comment, it didn’t make sense after why would someone choose not to earn more money but the story has been repeated by numerous employers. This strange phenomenon needs serious study because it seems for many Fijians (across all communities) there is a belief that once immediate needs are met, there is no need to earn more so why put in the extra hours. We saw it during the famous $1000.00 FNPF covid handouts (that weren’t handouts but a clever manipulation for superannuation funds). It is visible often after cyclones when ration packs are being excessively distributed. Many Fijians, (not all), choose to stay home rather than to accumulate wealth. YB wonders if this surge in remittances is having a similar effect i.e., why work when your relatives are sending money from overseas?

AND you might say what’s the problem. Money is coming…. it is being spent ….. Government is earning taxes from VAT… cava na leqa??? Well, where do we begin. Let’s start with productivity. Healthy economies and societies need to grow. To grow we need to invest time, energy and money into BUILDING things not EATING things!

But consider the typical “blue collar” urban Fijian family living on the corridor sharing rented accommodation. Once you’ve got the funds to feed, clothe and pay the mobile bills, what else is there. School is supposed to be free, health is covered (when we can get it) and as long as we can meet our hire purchase bills for the TV and furniture there isn’t much else. Yes we know we’re simplifying and making some massive generalisations but there is enough in this to be concerned and the trends are clear. Fiji is, generally speaking, a society of consumers not investors and YB can think of a very clear reason why.

The economies of most western nations have, since World War II, been driven by the dream of owning a home. Property is the goal for most western families but in recent times this is a goal that is increasingly beyond the reach of younger home buyers. This is why home construction is such a hot topic for Western Politicians. What REAL opportunity is there for a working-class urban Fijian to own their own home? Remember once you own your home you have an asset, that hopefully goes up in value, once you have an asset you can borrow money from a bank to improve your asset. Once you borrow money you have to work for a living and so the economic cycle turns.

Recent efforts by the Housing Authority are encouraging but there needs to be massive investment in this area to at least make small urban housing blocks of land available to Fijian workers at reasonable prices. This will not only create an important economic building block for Fijian families, but it also might create an incentive to stay.

However, the issues re this mass migration don’t stop there. The bulk of Fijians leaving to work in Australia are leaving dependents behind. There has already been headlines about “affairs and martial break ups” but consider the children and older people left behind. In many cases it is these older generations who have been dumped with the responsibility of raising their grandchildren relying on the “parents“ to pay the bills via remittances.

Then there is the issue of who should pay the bills. After all, if Fiji is just going to become one big baby factory producing labour and sports stars for Australia and New Zealand surely they should pay for the health and education costs Fiji carries up to the point where they are old enough to migrate. One Australian economist observed to YB the other day maybe the Pacific needs to be treated like Tasmania, which faces similar challenges re loss of young people, and the Australian Federal Government should inject funds directly into our education budget. That’s not AID by the way that is purely paying their fair share!

There are so many economic and social challenges that could result from this severe disruption to Fiji’s work force and society. We have thrown some thoughts around, but these really do just scratch the surface. This needs much wider study and debate so that for once we get ahead of these issues rather than waiting for them to explode in our face, as is our normal habit.