Minister for Economy, Aiyaz Sayed-Khaiyum says what makes the current crisis painful is it’s uncertain nature, and he has told parliament that considering the damage done and the uncertainty ahead, Fiji’s Gross Domestic Product is unlikely to return to pre-COVID-19 levels at least for the next 3 years.
While speaking on the first half of the 2020/2021 financial year for the government, Sayed-Khaiyum says the length of border closures is extending into some of the government’s more extreme forecast.
He says the impacts of cyclones Yasa and Ana are all contributing to the crisis.
Sayed-Khaiyum says business activity is down across most sectors, the tourism sector remains the hardest hit and visitor arrivals in 2020 declined by 84%.
He further says without the economic ripple effects of tourism, they have recorded reduced demand and lowered activity economy-wide.
Sayed-Khaiyum says apart from tourism, overall investment activity is greatly subdued and apart from the slowdown of government capital projects, some major construction projects have also slowed down.
The Minister for Economy says the government has marked double-digit contractions in net VAT collections, weaker consumer demand is also reflective of the near-zero activity in the tourism sector and supply chain disruptions to some extent.
Sayed-Khaiyum says some good news is that effective COVID-19 vaccines have been developed at an astonishing pace and immunizing our citizens alongside the developed world and ensuring our place in the world’s recovery are top priorities in the near term.
He says that is the clearest economic policy we can pursue at the moment.
Sayed-Khaiyum says the registration for vaccinations is the single greatest contribution every Fijian can make to revive our economy.
He also says more than 100,000 workers are affected after the pandemic started and many people are still affected.
He says so far a total of $206.7 million has been paid out to affected FNPF members. Of this, the government has directly paid out $94.5 million.
$100 million is budgeted for the current financial year which includes $5 million set aside for retraining of affected employees at FNU.
He says government share payouts to affected employees has been increasing since the initiative started.
13% was paid by the government when phase 1 of the assistance started while under the recent round 4 phase 2 assistance, the government made 80% of the payments.
Minister for Economy Aiyaz Sayed-Khaiyum. [image: Parliament of Fiji]
Government’s total revenue collection stood at $964.8 million for the first half of the 2020/2021 financial year while total government expenditure for the same period is $1.5 billion.
Minister for Economy, Aiyaz Sayed-Khaiyum says the total revenue for the first 6 months was above the forecast by $107.3 million.
He says this is attributed to the higher than expected collections from tax and non-tax revenue.
Tax was above forecast by $26.7 million while non-tax revenue exceeded by $80.6 million.
The higher than budgeted non-tax revenue collection is largely attributed to the grants received related to COVID-19 and cyclones. A $78.4 million came in from the EU, Indonesia, Australia and the ADB.
Sayed-Khaiyum says the total revenue forecast for the 2020/2021 financial year is $1.6 billion and the government remains on track to realize the projected revenue collections and most likely surpass the forecast.
He says apart from the hemorrhaging of tax revenue, the Fiji Revenue and Customs Service is playing catch up on VAT refunds while film tax rebates to be paid to production companies are in arrears.
Sayed-Khaiyum has revealed that the government has now reached an agreement with the Survivor series to pay the film rebate over 5 years and we can still get film productions which will generate jobs in the rural areas subject to health protocol measures that need to be put in place. Total government expenditure was $1.5 billion which was $470.4 million lower than forecast for the first 6 months of the year.
He also says fiscal risks remain for the second half associated with natural disasters, rehabilitation of schools and infrastructure, vaccine acquisitions and risks associated with contingent liabilities.
By: Vijay Narayan, Shanil Singh
National Federation Party Leader, Professor Biman Prasad says the focus on education for all, best health services and income support for the middle and low income earners will result in demand for goods and services in the economy.
While responding to the Minister for Economy’s statement on the first half of the governmnt’s financial year, Professor Prasad also raised concerns on the previous GDP figures.
He says his analysis is that Fiji’s economy was already contracting before COVID-19 and the country urgently needs an economic recovery plan for the 5 years.
Professor Prasad says when you continue to provide education opportunities, and have health services, people will then use the money that they have in their pockets.
He then said that maybe most government expenditure can be cut by taking away the Assistant Ministers.
The NFP Leader also claimed that some health facilities do not have Panadol and diabetes medicines.
When we questioned him on the claims made by Professor Prasad, Minister for Health Dr Ifereimi Waqainabete says it is baseless to make a general comment on no Panadol and diabetes medicines.
Dr Waqainabete says Panadol is available and if it is not, then it is the responsibility of the administration of that particular health centre and hospital to get it.
When asked to give the specific hospitals and health centres that have no Panadol or diabetes medicines, Prasad says he will give us those details on Friday.
By: Vijay Narayan
SODELPA MP, Niko Nawaikula. [image: Parliament of Fiji]
SODELPA MP, Niko Nawaikula is calling on the government side to change the Minister for Economy if they want to improve the economic performance of the country.
While responding to the Minister for Economy’s statement on the first half of the government’s financial year, Nawaikula says a Minister for Economy needs to listen to advice from experts and not make ad hoc decisions.
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