UPDATES: 2021-2022 Revised Budget Announcement

UPDATES: 2021-2022 Revised Budget Announcement

By Vijay Narayan
Thursday 24/03/2022
Minister for Economy Aiyaz Sayed-Khaiyum.

AG has tabled budget amendment bills that include VAT, Airport Tax, Customs Duties, Employment Relations Act.

These budget amendment bills are to be debated and passed without delay, after the debate and passing of the Revised National Budget.

18 bills are to pass through parliament in one single sitting and to pass without delay.

Aiyaz Sayed-Khaiyum says economic recovery is underway.

Sayed-Khaiyum says Fiji is expected to record the largest growth this year.

Visitor arrivals are approximately 50,000.

The AG says Fiji is back.

He says this Revised Budget is about what is next for Fiji.

Sayed-Khaiyum says they expect the economy to grow by 11.3% this year.

Foreign reserves stand at $3.2 billion to cover 8.8 months of imports - AG

Govt had to borrow about $2 billion in the last two years.

Free education and social welfare payments will continue.

Total Expenditure in the Revised Budget is estimated to be $3.72 billion and Total Revenue is $2.25 billion. Total deficit will be $1.46 billion.

Debt is projected to reach 88.6 percent by the end of this fiscal year and based on the projected economic recovery and planned deficit reduction, the Debt to GDP ratio is expected to come down to below 80% in the next 3 years.

From 7th April, 2022 incoming travellers have to provide a Rapid Antigen Test within 24 hours and the 3 nights hotel stay will be removed.

Social distancing requirements will no longer apply.

$700,000 allocated for Tourism Fiji to bring back additional staff for 5 days a week.

Travel Partner Countries will be removed and anyone fully vaccinated will be allowed into Fiji.

From tomorrow, the wearing of masks will be optional.

With FijiCare, we will soon launch a dedicated website for the initiative that contains an Online Patient Information System to streamline the administration of the initiative. Through this online platform, GPs will have access to all those patients seen under the PPP scheme - AG

From tomorrow, GPs under this PPP scheme will not be restricted from procuring medicine from the Government Pharmacy - AG Bio-medical and dental services will be outsourced - AG

$200,000 has been allocated to incentivise private GPs to open up new surgeries or clinics in rural areas; such as areas like Nawaicoba, Malolo, Naidovi, Drasa, Sabeto, Seaqaqa, Dreketi and Nasarawaqa.

$1.2 million has been allocated for dialysis subsidy.

From early May, open heart surgeries will be available in Lautoka.

AG says beginning in April, Fijians who qualify for the Free GP Programme will be able to access a range of blood tests, multi-urine dipstick tests, electrocardiograms, nebulizer treatment, oxygen supply, and ultrasound scans – all at no cost. GPs will prescribe medicine and even provide that medicine to patients after-hours if needed. Fijian Vaccine Pass will be rolled out soon. This will be in digital and paper format. It will be free of charge.

Unemployment assistance for the people of Vanua Levu. This includes a $100 one off payment.

The AG says the Fiji Pharmaceutical and Biomedical Services Centre will launch an improved implementation model for the Free Medicine Programme in April of this year. Under the new model, participating private pharmacies will dispense listed medications from their own inventory and will be reimbursed by the Ministry of Health and Medical Services. He says this will improve efficiency and service.

The Free Medicine Programme is funded at $8 million.

The list of free medicines has expanded to cover 140 items, comprising 136 medicinal products and 4 consumable items, mainly wound dressing materials. To qualify for free medicine, individuals have had to apply through the Ministry of Health and Medical Services or simply show they qualify for any of our many other social welfare schemes –– such as the Poverty Benefit Scheme, Child Protection Allowance and Social Pension Scheme. As announced in the 2021-2022 National Budget, this initiative was extended to include patients served through the Public Private Partnership General Practitioners Scheme.

Ba Hospital will move from Ba Mission Hospital on 9th April. All current services delivered at the Ba Mission Hospital will be provided at the new upgraded Ba Hospital facility.

Two operating theatres will come online in the coming months, and the Hospital will offer 24-hour cardiovascular surgeries, chemotherapy, and other critical services. It will also give local doctors exposure and valuable training in these expert medical fields, where we want Fiji to excel.

The AG says special thanks to the Australian Infrastructure Investment Financing Facility for the Pacific (AIIFP), which is willing to provide financing for this Public Private Partnership and is also exploring the possibility of directly financing the Project.

Government is allocating $13 million to operationalise the Public Private Partnership arrangement.

$338.2 million allocated for FRA. $325.1 million is for capital projects.

$60 million allocated to FRA to repair severely affected roads.

Revised Budget to WAF $195.2 million.

Free Water initiative will continue.

$9.7 million has been allocated for the house wiring and EFL grid extension program.

$6.3 million is provided to address the water disruption issues in the Suva-Nausori corridor, Nadi, Lautoka and Labasa - AG

The Government will ensure that the households in the Central Division that do not have access to electricity in areas such as Korovou, Tailevu, Namosi, Naitasiri, and Serua will be connected to the grid - AG

The AG says the Government will be stepping in with a $500,000 allocation to support cane growers seeking to convert their sugarcane leases to agricultural leases to plant other crops or even for a 99-year residential lease.

$500,000 has been allocated to fund the survey of agricultural land. $500,000 has also been allocated for survey of residential land.

The AG says they have consulted closely with the Director Town and Country Planning, the Municipal Councils, and relevant stakeholders and identified areas to be blocked-rezoned to Commercial in several locations, including Suva, Nasinu, Lautoka, Ba, Sigatoka, Nadi, Savusavu, Nausori, Rakiraki, and Tavua.

By way of amendment to the Town Planning Act, the Permanent Secretary responsible for town planning will immediately approve block rezoning of those areas. TELS mark entry reduced to 250 except for Commerce studies.

The quota for TELS for degree programmes will now be increased from 2,000 to 2,942, with increased attention to areas such as Medicine and Health, Engineering, Science and Technology.

The quota for nursing was set for 100 students for the 2022 new intake, but this may not be sufficient given the fact that many nurses are resigning – either leaving the profession or relocating.

To fill the gaps created by resignations and migration of nurses, the TELS quota for Bachelor of Nursing will be increased to 350.

To accommodate private MBBS students of 2021, the National Toppers Scheme will change to include those who did Year 13 in 2020, had marks of 340 and above, a GPA of 3.0 and above in 2021, and combined parental income of less than $100,000.

In the 2021-2022 National Budget, Government allocated funds for MBBS Students who had privately enrolled and met the criteria for a one-off $10,000 Government Grant. In February this year, 42 students were selected and can use the grant to clear off the fees for 2021.

Government will now provide full-time scholarships under the National Toppers Scheme effective from Semester 1 2022. This will amend the existing scholarship regulation to include these students who did year 13 in 2020.

The Government will provide 20 MBBS and 5 Bachelor of Dental Surgery awards to new students who have completed Year 13 with a mark of 340 in 2021 through the National Toppers Scheme.

Those students who are registered on the TSLS Online Portal for 2022 intake can apply or change their programme to qualify.

The bus fare subsidy for the elderly and disabled will be increased from the current $10 per month to $25 per month at a total cost of $6 million dollars benefitting close to 40,000 Fijians.

Electric shuttle services will start from Valelevu and then Nakasi and other areas.

Fiji will start the open taxi ranking system.

Paid base stand fees will be removed. It will be replaced by a PSV levy.

The AG says currently, a person only needs to be lawfully present in Fiji for 10 out of the 15 years prior to lodging an application for naturalisation. He says the government will be increasing the requisite aggregate period to 15 out of the 20 years to protect and enhance the value of the Fijian citizenship.

$250,000 has been allocated towards a civil service recognition programme whereby those development partners, private sector partners and civil servants who served the nation during the COVID-19 pandemic will be recognised with a medal award for their Outstanding Courage, Compassion and Commitment.

Civil service salary review underway for positions that require scarce skills.

$2.7 million has been allocated to appropriately remunerate 312 teachers who have upskilled their qualifications.

Effective from 1st April 2022, overtime will be reinstated for all civil servants on band E and below. Overtime will also be reinstated for registered nurses on Band F. Other officers on Band F and above will be entitled to Time Off in Lieu of overtime pay. This excludes teachers.

The Ministry of Civil Service will be issuing a circular in the coming week. Meal allowances will also be increased from $10 to $15.

The National Minimum Wage will be increased to $4 an hour from $2.68 an hour.

The AG says the revised minimum wage rate will be implemented in four tranches, starting at $3.01 from 1 April 2022, $3.34 from 1 July 2022, $3.67 from 1 October 2022 and $4.00 from 1 January 2023.

For all the other 10 sectors, the minimum wage rate will also rise in tandem with new rate and topped up by the relative difference between the current national minimum wage rate and the sectoral wages.

Family Care and Paternity Leave have been put on hold.

The AG says the government will review the 10 sectoral job classifications.

The current classification for the 10 sectors is decades-old and does not reflect the modern economy. He says take for example, the printing industry. The sector has changed dramatically in this century through automation and digitisation –– but the job classification hasn’t changed at all.

He says we have to recognise these shifts and align sectoral wages with market realities to ensure that people are paid just wages for the jobs they perform. From 31 August 2022 fiscal duty on imported liquid milk, full-cream powdered milk, yoghurt, cheese and butter will be reduced to 5% from the current 32%.

Fiscal duty rate on lunch boxes with a thickness of 1.88mm or more and which are not manufactured locally, water bottles, wheelie bins, meat patties and chicken nuggets, both raw and cooked, will be reduced from 32% to 5%. Import Excise of 15% will also be removed from lunch boxes, water bottles and wheelie bins.

The AG says they will raise VAT on 21 non-essential items to 15%. The increase in VAT to 15% will cover goods and services that previously attracted ECAL, such as prescribed services, white goods and motor vehicles, and will apply to all turnover in excess of $100,000.

ECAL will be removed and replaced by the adjusted VAT rate of 15% for these items. So tax on an item that carried 9% VAT and 5% ECAL would increase by only one percent. The additional list of goods and services to be taxed at 15% VAT includes alcohol, tobacco, textiles, clothing & footwear, perfumes, jewellery, watches, stereos and sound systems and other electrical equipment, and professional services such as legal and accounting, management and consultancy, architectural and engineering, scientific research and development, advertising and market research, veterinary activities and other professional, scientific and technical activities.

From 1 April 2022, sugar, flour, rice, canned fish, cooking oil, potatoes, onion, garlic, baby milk, powdered milk, liquid milk, dhal, tea, salt, kerosene and cooking gas are all going to become VAT zero-rated –– as will household essentials including soap powder, toilet paper, sanitary pads, and toothpaste.

The AG says in total, this reduction will send $163 million in tax revenues back to the Fijian people and alleviate the cruellest burden that the pandemic and the Russian war have placed on our people’s backs.

The government will continue to review the price of food and other essentials as time goes on, a flexible policy posture will be maintained to adapt to the current circumstances.

The AG says to alleviate the sharp rise in fuel price due to the conflict in Ukraine, the Government will remove the current 20 cents fuel tax. He says this will cost the Government approximately $56 million.

Prices remain volatile, and we will continue to monitor global crude oil prices and the events that are affecting them, such as the war in Ukraine.

In the same way, should crude oil prices stabilise, we may be able to reconsider this reduction.

The Government will provide, for the next 3 years, a 200% tax deduction to those employers who will be paying maternity leave for their staff, for the sake of the mothers of Fiji.

To support the Fiji Rugby Union and the Fijian Drua in meeting the New Zealand Rugby Union’s (NZRU) financing requirements for Super Rugby Pacific, the Fijian Government will invest $6 million for 51% shareholding in Counter Ruck Pte Limited, or CRL, which was established by the Fiji Rugby Union to own and operate the Fijian Drua.

The FRU had requested a grant, but Government is unable legally to give a grant to a private company. The AG says they can, however, take a share in the company and divest it at a later date.

Through this revised budget, the Fijian Government will allocate the first tranche investment of $3 million for 25.5 percent shareholding. The second tranche investment of an additional $3 million will be undertaken by December 2022 to secure the total 51%. By December 2022, the Fiji Rugby Union will own 49 percent shareholding while the Fijian Government will own 51 percent.

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