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.
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