Govt is spending money like drunkards in a nightclub - Seruiratu

Leader of the Opposition, Inia Seruiratu says there is nothing new in the 2023-2024 National Budget and it is a repetition of what the FijiFirst has been doing in the past years with a bit of tweaking here and there and adds the government is spending money like drunkards in a nightclub.

While opposing the budget in parliament, Seuiratu says this is a big spending budget and the largest in Fiji’s history and the net deficit of $639 million is the largest ever deficit outside of pandemic years.

He says the 2023-2024 budget will increase the total debt from $9.9 billion to $10.5 billion.

Seruiratu says government debt had been on a decline prior to the onset of COVID-19 and the debt to GDP ratio had dropped to below 50 percent and only rose as Fiji tried to counter the effects of COVID-19 and to ease the impact on our people.

He says the total debt will increase to more than $10 billion despite the fact that they have been harping on about excessive debt over the past few years.

The Leader of the Opposition says a 25 percent increase in the revenue has been highlighted in the 2023-2024 budget through various means including increase in VAT from 9 percent to 15 percent for all non-zero rated items, increase in company tax with the exception to companies listed on the stock exchange, the range of excise tax increases together with the removal of various incentives that were designed to stimulate investment.

He says there are significant weaknesses in the reasoning behind revenue forecast because it does not take into account the likely changes in the spending habits that will happen when the VAT increase kicks in and also the tax increases, departure tax increases and duty increases on the current high tourism arrival forecast.

Seruiratu says the middle income earners are the ones that have money in their pocket and spend.

He says consumption goes up when they have enough take-home pay.

While acknowledging government for those that are receiving social welfare payment, Seruiratu says he believes it is not big enough to offset the increase in particularly in non-zero rated items.

He says to reduce three levels of VAT to two will be a welcome relief to businesses and also to FRCS but the notion that the enhanced expenditure support measures will adequately compensate for the losses that the most marginalized will have to pay as a result of VAT increases is something they do not fully subscribe to.

He says they note the company tax increase from 20 percent to 25 percent while companies that were of the stock exchange who were eligible for 10 percent will now increase to 15 percent.

Seruiratu says this will obviously increase the amount of revenue captured from the private sector but it could backfire because some of these ventures could close shop if they are unable to cope with the increases in taxes together with increase in duty for importing goods supplied for manufacturing.

He further says the decision to eliminate company tax from all water bottling companies does not make sense at all because it is focused on helping one company.

He asks why is the government giving up revenue that could be collected from a whole sector just to allow one company to get tax credits in the United States.

Seruiratu also asks why is the Prime Minister bending over backwards to do this and this is hypocrisy.

He says in 2010 when the Bainimarama government came in, Fiji Water was already on a 13-tax holiday and claim they were operating under a loss.

The Opposition Leader says there is less economics and more politics in this budget.

Seruiratu says right now Fiji’s recovery is being driven by tourism and we must do all in our power to ensure the growth in tourism is not impeded in any way.

He says we must be mindful of the fact that Fiji is already regarded as a high cost tourism destination and there are a number of recommendations in this budget that will further impede our attractiveness as a tourism destination, and this includes the VAT increase by 6 percent that will raise the cost of things brought in hotels.

Seruiratu says the increase of company tax by 5 percent, the increase of excise tax of alcohol and tobacco, gradual increase in departure tax, increase in duty for carbonated sweet beverages on juices, ice-cream, sweet biscuits and imported goods and snacks, increasing in 3 percent in fiscal duty, in concession applicable to hotels, restaurants and resorts and concession to new resorts is the danger that we face.

He says in our quest to raise revenue, we could be killing the goose that is driving our recovery.

Seruiratu says Professor Prasad talked about everything being connected to everything else and professed their humility to listen to others but he is challenging Professor Prasad that if he had humility he would not have told former Prime Minister Mahendra Chaudhry to shut up and stop talking garbage when Chaudhry told him to stop wasting government money on summits to meet his friends and supporters who comprise about 8 percent of the national vote.

He says these summits to discuss their policy homework should have been done when they spent 8 years in Opposition, and this is why they raise the issue about stating that they are only 6 months in government and adopting a grim state of affairs.

Seruiratu says they do not realise that they will come to the other side of the floor and that is why in his contribution he has never talked about freebies and hoodwinking and electioneering and these are the things they talked about.

He adds let's steer the economy to recovery and he has heard from some economists that revenue is not an issue, but our challenge is expenditure and how the revenue generated is utilised.

Seruiratu says we need to be reasonable in our revenue generation target and unfortunately some that are supposed to give us more in the budget are not giving what they can afford.

He says we need to tightly control our expenditure.

He adds the Prime Minister in his statement had said that we need to share the pain together but unfortunately, he does not see that in this budget and decided to please some at the expense of others.

He further says by not allowing the full Opposition to participate in parliament and debate and vote, the coalition government has completely undermined democracy.

While acknowledging the Minister for Finance delivering the budget on time, Seruiratu says it is disappointing the government is taking well over 4 months to fill the two FijiFirst parliamentary seats vacated in February this year.

He says if these two members are not sworn-in in this session, they will have to wait till the September sitting and that will be over 6 months.

The Electoral Commission does not have a quorum to hold a meeting with only an Interim Chair, and two other members.

It needs 4 of the 6 members to hold a meeting and deliberate on who will take up the two vacant FijiFirst seats.

Meanwhile, the 2023-2024 national budget debate continues in parliament.