Minister for Economy, Aiyaz Sayed-Khaiyum says they are taking a very conservative revenue estimation strategy for the Government in the 2021/2022 National Budget due to the current uncertainties, and the downside of the strategy is that the projected deficit and Government debt levels look higher.
While speaking during his right of reply in parliament, Sayed-Khaiyum says the 2021/2022 budget deficit is projected at 16.2 percent of the Gross Domestic Product and Fiji’s debt is expected to rise to $9 billion or 91.6 percent of GDP.
Sayed-Khaiyum says although Opposition Leader, Ratu Naiqama Lalabalavu and SODELPA MP, Ro Filipe Tuisawau are claiming that the revenue projection is optimistic for the budget, he says the conservative revenue estimation strategy has to be taken during these times.
Sayed-Khaiyum says with a lower projected net deficit of around 11.5 percent in the 2020/2021 financial year, Government debt is estimated to be around $7.6 billion or 79.2 percent of GDP as at July 2021. He says this is almost $700 million lower than the earlier projected debt of $8.3 billion.
For 2021/2022 National Budget, tax revenue collections are projected at $1.597 billion. This higher collection is also based on the assumption that there will be some form of reopening of the borders in the first half of 2022, but arrivals are conservatively estimated at around 20 percent of preCOVID levels for revenue projection purposes.
Government will also carry over around $150 million in cash balances to the new financial year.
Apart from this, non-tax revenue is estimated at $487.5 million.
Government plans further divestment of shares for Amalgamated Telecom Holdings Limited, Fiji Airports Limited and some other small entities. This is expected to generate around $150 million in non-tax revenue.
Government is also in discussion with a number of development partners for more budget support grants which is conservatively budgeted at around $116.3 million.
Based on these assumptions, the total revenue for 2021/2022 is projected to be around $2.1 billion.
