Deputy Prime Minister, Professor Biman Prasad says he is not sure where Mahendra Chaudhry and Savenaca Narube get the idea that the government cannot do anything about the cost of living. Chaudhry has said that raising VAT to 15 percent has backfired on the government.
He says the government can simply reduce VAT from 15 percent to its previous level of 9 percent, if it genuinely wants to reduce the rising cost of living and the hardship out there.
Chaudhry says instead of providing relief and reducing the hardship faced by people, as promised in his election campaign, Professor Prasad made their suffering worse.
He says revenue collection from VAT has been less than $300 million, much lower than the projected $450 million.
The FLP Leader says Fiji’s debt situation has not improved, either.
Chaudhry says the Minister claims the debt to GDP ratio has declined from 90 to 80 percent but he says this is misleading as the ratio has come down because the GDP has gone up.
The FLP Leader says Professor Prasad could have looked at a number of other alternatives such as the reintroduction of the Service Turnover Tax and Stamp Duty or higher duty on imports of non-essential luxury items or a progressive income tax with those in higher brackets paying more.
He says the Minister for Finance should seriously consider the removal of corporate tax exemption and holidays which could contribute an additional $120 million to government coffers.
However Professor Prasad says as usual, Mahendra Chaudhry and Savenaca Narube deliberately ignore the facts and distort the truth that had been clearly laid out in the public.
He says with the coalition government’s decisive macroeconomic management, they have put debt on a path of sustainability.
The Deputy Prime Minister says the economy is growing strongly at around 3.8 percent, and inflation has been slowing down.
He says investments are picking up, businesses are thriving, tourism is booming, income levels are rising and living standards are improving.
Professor Prasad says since coming into government, they have adopted a three-prong approach to addressing cost of living and ensuring that the most vulnerable people receive direct income support and get the services they deserve, vigilance on prices and reduction of duties on several products and raising income of our people to mitigate against rise in prices.
He says they promised to increase the national minimum wage to $5 an hour and they have done that, with the $5 an hour effective from 1st April 2025.
Professor Prasad says they promised to pay more than $100 a tonne for sugarcane, and they have paid over $105 for the last season, $20 more per tonne than the guaranteed price.
The Minister for Finance says they have raised civil service salaries in the last budget and injected almost $85 million in the pockets of over 40,000 civil servants. He says this was the first increase since 2017, with increases ranging from 7 to 20 percent.
Professor Prasad adds that they have written off over $650 million in TELS debt for 53,000 families and replaced it with a full scholarship scheme, they have restored pensions for FNPF pensioners who have been fighting for justice at a total cost of almost $50 million, they have paid 2 rounds of $200 back to school support to over 200,000 children with the third-round round of payment in process, and they have increased social welfare allowance by 25 percent for those over the age of 70 and 15 percent for others.
He also says they have maintained zero rated VAT on 22 items giving away almost $250 million in VAT revenue every year.
Professor Prasad says they have given more money towards health, water, drainage, agriculture, and other key priority areas.
He says on drugs, they have formed the Narcotics Bureau and with multi stakeholder collaboration, they are exposing billions of dollars in drug busts.
Professor Prasad says they are working on drug rehab centres with the Corrections Service and the Ministry of Health.
He adds they are creating more awareness and a coordinated approach to fight against drugs with the involvement of families, schools, religious bodies, NGOs, development partners and government.
The Deputy Prime Minister says government debt stood at around $10.3 billion, equivalent to 79.4 percent of GDP at the end of July 2024.
He says debt is projected to be around 77.8 percent of GDP at the end of the financial year 2024 to 2025.
Professor Prasad says this is a marked decline from the high of 90.7 percent of GDP in 2021 to 2022.
At the end of October 2024, government’s total debt stood at $10.575 billion, equivalent to 75.4 percent of GDP.
Professor Prasad stresses that the critics have not produced a single practical idea to address issues that he is talking about.
He says on the contrary, Chaudhry makes this absurd assertion that the government has not delivered on its promises.
The Deputy Prime Minister says this is contrary to what they have done in the last 2 years.
He says he can understand Chaudhry’s desperation to stay relevant and he suggests they do an honest assessment of the data, of the coalition government’s policies and refer to the citizens guide to the budget before making these wild and ridiculous statements.
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