Fiji Labour Party Leader Mahendra Chaudhry says government debt was already a problem way before COVID and in 2019, government was forced to cut its budget by $1 billion.
Chaudhry says this is because there were clear signals from international financial institutions, notably the International Monetary Fund that government had to harness the growing debt level which was unsustainable.
He has made these comments following Acting Prime Minister and Minister for Economy Aiyaz Sayed-Khaiyum’s response to questions by Legend FM News where he had stated that if the government did not borrow the money, we would have had a devaluation of the Fijian dollar which would have caused enormous socio-economic issues.
The former Prime Minister says Sayed-Khaiyum is trying to blame everything on COVID when the problem started way before that.
Chaudhry also says there was no need to devalue the Fijian dollar but the reality is that government revenue had declined substantially by the time COVID hit us.
He says the FijiFirst Government had inflated revenue budgets substantially from 2014 to 2018 which resulted in high fiscal deficits during those years.
Chaudhry says this led to increased borrowings to fund the ballooning deficits.
The FLP Leader says another thing government does not talk about is forcing the people to tap into their FNPF savings which has seriously depleted the money these people had saved for their retirement.
Chaudhry adds these are consequences of government actions and policies.
Sayed-Khaiyum had also said that essentially a part of some of the long term loans will in fact become a grant however Chaudhry says this is something the Attorney General is trying to sell to the public.
Chaudhry says he is not aware of loan agreements which has provisions for it to be converted into a grant, and if there are examples then Sayed-Khaiyum should reveal the details.
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