*And the long wait, while he used to stop for a P**S and PRAYER on his way to deliver his BUDGET to PARLIAMENT.
*The narcissist megalomaniac was able to rule with iron-fist because Fijians of all races simply refused to rise up and overthrow him, even if it required the spilling of blood.
*Never again must he be allowed to control levers of Power.
*A thoroughly despicable creature who 'lost his marbles'.
*Who in their right mind, on the eve of a general election, would demand that if grandmas want to vote, they must change their marriage names? A Bloody TWAT!
After promising to exercise "fiscal prudence", "fiscal conservatism" or "fiscal consolidation", supposedly because of mismanagement by FijiFirst, the Rabuka sanctioned budget delivered by Biman has handed down the largest spending budget in Fijian history, outside of the pandemic years.
That means debt, which was supposedly a very bad thing for the country, is now going to be above $10bn. It never reached that level when FijiFirst was in government notwithstanding COVID.
This budget does not provide any concrete or real plans to grow the economy on a sustained basis. Therefore, with already such a large deficit weighted fundamentally on operational expenditure, we can see that such deficits will be there for the long-term. Meaning more and more debt.
The Rabuka government through Biman is misleading ordinary Fijians about paying debt. In paragraph 27 of his budget speech Biman rather disingenuously claims that this budget pays off approximately 500 million in principal payments. This is simply not true. The budget is refinancing debt. Refinancing debt is not paying of debt or the principle. Conversely, if maturing debt was paid, the stock of debt won’t grow as fast as it is under this budget.
The type of fiscal policy we are seeing now is what an economist has said is like a pandemic fiscal policy on steroids.
This is the wrong thing to do when the private sector and economy were doing so well prior to 24 December 2022 and the new found energy and confidence post pandemic should have been capitalised on. In other words, simply carry on with what was being done. Provide continuity. Provide stability. Provide a vision. Difficult as it maybe with the current talent in the Rabuka led government.
There is nothing about fiscal prudence in this budget. Polar opposite to what was promised prior to the budget announcement. The ANZ report which talks about the government fulfilling its election promises, which essentially were about operating expenditure, is a nice way of saying that Biman wagged the tail when it came to political imperatives, economically irresponsible as they were.
Vat hike and meddling with departure tax will make tourism industry less competitive. Tourists will go elsewhere because Fiji will become unaffordable to the budget traveller. A win for our competitors in that segment of the market.
How is the budget fair and just or balanced as they like to call it? - especially when you ask the low income and middle class to pay or do all of the heavy lifting of government’s extravagance? High income earners get off scot-free.
High income earners will pay less tax now, because of the meddling with the social responsibility levy. So those lawyers and accountants and other wealthy people who served apparently at no charge on the so-called fiscal review committee will now pay less personal income tax. The wealthy will continue to benefit from the 21 non-VAT items and another new one now, which is prescribed medicine. This new addition won't make any difference to low-income families because they were already getting most prescribed medicine for free under the free medicine scheme. Again, the wealthy benefit.
Another blow to low-income earners, amongst others, is that under this budget, the free GP scheme which the FijiFirst government initiated will now be means tested. Under this budget a family that earns more than 30,000 a year won't be eligible to get free doctor services under the GP scheme. Say a working husband and wife earn $16,000 each totalling a combined annual household income of $32,000, will no longer including their children be eligible for this service. However, a single person earning $29,000 a year will be eligible for the free GP scheme. Where is the equity? Where is the fairness? A family with 5 children won't be able to access the free GP scheme because their combined household income has just sneaked above $30,000 a year. Of course now on top of that they have to pay school levies. Less disposal income. Don't forget, everything, apart from the 22 items they buy, will have a 15% VAT on it. School uniform, blankets, pens, clothes, you name it.
Operating expenditure is way up in this budget. Operating expenditure does not build assets. Capital expenditure is down as a proportion of total spend and whatever has been allocated as capital expenditure is essentially allocated to pay for the ongoing capital projects that the FijiFirst Government initiated and are currently being completed. So, all the major road, bridge and building works that you currently see being constructed were initiated by the FijiFirst government and allocations for the completion is allocated in this budget. There is no new major project funding in this budget. No new capital expenditure.
Every company that is currently paying the corporate tax rate of 20% will now have to pay 25%, except all water extraction and bottling companies. Biman did not mention this major policy change in his budget address. He is either very forgetful or was overwhelmed by the moment or deliberately left it out, hoping that no one will pay heed.
So, here we have Fijian owned businesses, small and medium enterprises, struggling in this already dampened market because of:
- the uncertainty of economic policies over the past few months,
- the massive skills and brain drain,
- lack of general consumer confidence,
- impending increased FNPF contributions,
- increased negative impact on cash flow because of VAT increase and general cost of doing business, and,
- pressure from employees to raise wages because of increased day to day costs for them,
now having to pay 5% more corporate taxes (an increase of 25%) when Fiji Water and other water extraction and bottling companies will now not pay any corporate tax for the next 7 years.
The rationale that was given to us by FRCS was that it will help Fiji Water with its tax obligations in USA and that in any case the water resource tax has been increased.
This justification does not hold water. We simply cannot exempt an entire sector from paying corporate tax just because one very wealthy company, that by the way has trademarked the name Fiji and therefore owns it, wants favourable tax arrangements. Where is the interest of Fiji and Fijians? Why exempt them from corporate tax when all this time they have been paying corporate tax and water resource tax?
The justification that by increasing water resource tax we will overall be collecting more on balance also does not hold water. They can pay corporate tax and water resource tax. Other water companies also now have a free ride because of the kowtowing by Rabuka's government to Fiji Water.
All companies and in particular Fijian companies and even foreign owned who have been in Fiji for a number of years must be at the very least scratching their heads. They must be saying this is not a new industry. This is an industry that does not need protection. It is an established brand. These people have been paying taxes. Why the change? Why not us? Why them? What is the policy rationale? What message does it send to everybody else about a level playing field? Why such blatant discrimination?
The irony of course is that on one hand Rabuka and Biman say we need to raise revenue but are willing to forgo it when it comes to certain companies and individuals but not do so when it comes to low- and middle-income Fijian families and Fijian or Fijian-based companies, big, medium or small.
From a global economy perspective, this is a classic case of a weak government from a developing country being subservient to the interests of a large foreign owned company. It is even more marked when a finite resource from that developed country is being extracted for offshore wealth creation without commensurate onshore wealth generation.
Did the projected growth factor in the higher VAT rate and corporate tax? You would think not as forecasts were prepared prior to the announcement of the higher taxes. The higher tax rates will negatively impact demand and spending in the economy.
Let’s not get distracted with debt to GDP ratios coming down. Biman likes to compare current debt to GDP ratio with the debt to GDP ratio during the pandemic. This is comparing a normal time period to a one in a 100-year event. Smacks of disingenuity. Interesting how the Rabuka government talks about the debt to GDP ratios and does not focus on the nominal value of the debt but when in opposition it was the reverse.
Overall as said before there is nothing wrong with debt as long as you are able to service it, the cost of debt is attractive, you borrow to build assets and productive capacity and which will lead to economic growth and expansion and result in improving the quality of life of all Fijians in particular the marginalised.
This budget is the outcome of a government that is now the victim of its own and misplaced narrative, demonstrating a complete lack of understanding of the fundamentals of managing a modern day economy and working to harness the country's potential. It demonstrates gross incompetence and also shows that the national budget is tailored to the serve the interests of a few companies and individuals.
The policies reflected in the budget provides no real prospects to have real and sustained growth to service the burgeoning debt.
There is very little fiscal space left to cater for any unexpected events or shocks such as a rebuild after a climatic event.
The budget is anti low-income and middle-income families. It has accepted and allowed for wasteful operational expenditure and seeks to make it the norm. It has augmented the size of ministries and curtailed efficiencies by assigning delivery of services to non-specialised ministries or departments. It has dampened the prospects for real growth. It will in a tangible manner adversely affect the lives of ordinary Fijians.
The reduction of opportunities for businesses and low-income and middle-income earners to own their own homes and how our young have been duped are some of the many matters arising out of this budget, which I’m sure many will comment on. This is the tip of the iceberg.
That means debt, which was supposedly a very bad thing for the country, is now going to be above $10bn. It never reached that level when FijiFirst was in government notwithstanding COVID.
This budget does not provide any concrete or real plans to grow the economy on a sustained basis. Therefore, with already such a large deficit weighted fundamentally on operational expenditure, we can see that such deficits will be there for the long-term. Meaning more and more debt.
The Rabuka government through Biman is misleading ordinary Fijians about paying debt. In paragraph 27 of his budget speech Biman rather disingenuously claims that this budget pays off approximately 500 million in principal payments. This is simply not true. The budget is refinancing debt. Refinancing debt is not paying of debt or the principle. Conversely, if maturing debt was paid, the stock of debt won’t grow as fast as it is under this budget.
The type of fiscal policy we are seeing now is what an economist has said is like a pandemic fiscal policy on steroids.
This is the wrong thing to do when the private sector and economy were doing so well prior to 24 December 2022 and the new found energy and confidence post pandemic should have been capitalised on. In other words, simply carry on with what was being done. Provide continuity. Provide stability. Provide a vision. Difficult as it maybe with the current talent in the Rabuka led government.
There is nothing about fiscal prudence in this budget. Polar opposite to what was promised prior to the budget announcement. The ANZ report which talks about the government fulfilling its election promises, which essentially were about operating expenditure, is a nice way of saying that Biman wagged the tail when it came to political imperatives, economically irresponsible as they were.
Vat hike and meddling with departure tax will make tourism industry less competitive. Tourists will go elsewhere because Fiji will become unaffordable to the budget traveller. A win for our competitors in that segment of the market.
How is the budget fair and just or balanced as they like to call it? - especially when you ask the low income and middle class to pay or do all of the heavy lifting of government’s extravagance? High income earners get off scot-free.
High income earners will pay less tax now, because of the meddling with the social responsibility levy. So those lawyers and accountants and other wealthy people who served apparently at no charge on the so-called fiscal review committee will now pay less personal income tax. The wealthy will continue to benefit from the 21 non-VAT items and another new one now, which is prescribed medicine. This new addition won't make any difference to low-income families because they were already getting most prescribed medicine for free under the free medicine scheme. Again, the wealthy benefit.
Another blow to low-income earners, amongst others, is that under this budget, the free GP scheme which the FijiFirst government initiated will now be means tested. Under this budget a family that earns more than 30,000 a year won't be eligible to get free doctor services under the GP scheme. Say a working husband and wife earn $16,000 each totalling a combined annual household income of $32,000, will no longer including their children be eligible for this service. However, a single person earning $29,000 a year will be eligible for the free GP scheme. Where is the equity? Where is the fairness? A family with 5 children won't be able to access the free GP scheme because their combined household income has just sneaked above $30,000 a year. Of course now on top of that they have to pay school levies. Less disposal income. Don't forget, everything, apart from the 22 items they buy, will have a 15% VAT on it. School uniform, blankets, pens, clothes, you name it.
Operating expenditure is way up in this budget. Operating expenditure does not build assets. Capital expenditure is down as a proportion of total spend and whatever has been allocated as capital expenditure is essentially allocated to pay for the ongoing capital projects that the FijiFirst Government initiated and are currently being completed. So, all the major road, bridge and building works that you currently see being constructed were initiated by the FijiFirst government and allocations for the completion is allocated in this budget. There is no new major project funding in this budget. No new capital expenditure.
Every company that is currently paying the corporate tax rate of 20% will now have to pay 25%, except all water extraction and bottling companies. Biman did not mention this major policy change in his budget address. He is either very forgetful or was overwhelmed by the moment or deliberately left it out, hoping that no one will pay heed.
So, here we have Fijian owned businesses, small and medium enterprises, struggling in this already dampened market because of:
- the uncertainty of economic policies over the past few months,
- the massive skills and brain drain,
- lack of general consumer confidence,
- impending increased FNPF contributions,
- increased negative impact on cash flow because of VAT increase and general cost of doing business, and,
- pressure from employees to raise wages because of increased day to day costs for them,
now having to pay 5% more corporate taxes (an increase of 25%) when Fiji Water and other water extraction and bottling companies will now not pay any corporate tax for the next 7 years.
The rationale that was given to us by FRCS was that it will help Fiji Water with its tax obligations in USA and that in any case the water resource tax has been increased.
This justification does not hold water. We simply cannot exempt an entire sector from paying corporate tax just because one very wealthy company, that by the way has trademarked the name Fiji and therefore owns it, wants favourable tax arrangements. Where is the interest of Fiji and Fijians? Why exempt them from corporate tax when all this time they have been paying corporate tax and water resource tax?
The justification that by increasing water resource tax we will overall be collecting more on balance also does not hold water. They can pay corporate tax and water resource tax. Other water companies also now have a free ride because of the kowtowing by Rabuka's government to Fiji Water.
All companies and in particular Fijian companies and even foreign owned who have been in Fiji for a number of years must be at the very least scratching their heads. They must be saying this is not a new industry. This is an industry that does not need protection. It is an established brand. These people have been paying taxes. Why the change? Why not us? Why them? What is the policy rationale? What message does it send to everybody else about a level playing field? Why such blatant discrimination?
The irony of course is that on one hand Rabuka and Biman say we need to raise revenue but are willing to forgo it when it comes to certain companies and individuals but not do so when it comes to low- and middle-income Fijian families and Fijian or Fijian-based companies, big, medium or small.
From a global economy perspective, this is a classic case of a weak government from a developing country being subservient to the interests of a large foreign owned company. It is even more marked when a finite resource from that developed country is being extracted for offshore wealth creation without commensurate onshore wealth generation.
Did the projected growth factor in the higher VAT rate and corporate tax? You would think not as forecasts were prepared prior to the announcement of the higher taxes. The higher tax rates will negatively impact demand and spending in the economy.
Let’s not get distracted with debt to GDP ratios coming down. Biman likes to compare current debt to GDP ratio with the debt to GDP ratio during the pandemic. This is comparing a normal time period to a one in a 100-year event. Smacks of disingenuity. Interesting how the Rabuka government talks about the debt to GDP ratios and does not focus on the nominal value of the debt but when in opposition it was the reverse.
Overall as said before there is nothing wrong with debt as long as you are able to service it, the cost of debt is attractive, you borrow to build assets and productive capacity and which will lead to economic growth and expansion and result in improving the quality of life of all Fijians in particular the marginalised.
This budget is the outcome of a government that is now the victim of its own and misplaced narrative, demonstrating a complete lack of understanding of the fundamentals of managing a modern day economy and working to harness the country's potential. It demonstrates gross incompetence and also shows that the national budget is tailored to the serve the interests of a few companies and individuals.
The policies reflected in the budget provides no real prospects to have real and sustained growth to service the burgeoning debt.
There is very little fiscal space left to cater for any unexpected events or shocks such as a rebuild after a climatic event.
The budget is anti low-income and middle-income families. It has accepted and allowed for wasteful operational expenditure and seeks to make it the norm. It has augmented the size of ministries and curtailed efficiencies by assigning delivery of services to non-specialised ministries or departments. It has dampened the prospects for real growth. It will in a tangible manner adversely affect the lives of ordinary Fijians.
The reduction of opportunities for businesses and low-income and middle-income earners to own their own homes and how our young have been duped are some of the many matters arising out of this budget, which I’m sure many will comment on. This is the tip of the iceberg.
Deputy Prime Minister and Minister for Finance, Professor Biman Prasad says it's ironical that the FijiFirst Party which increased Fiji's debt by over $7 billion since 2007 is wanting to lecture the new Government about financial prudence, fiscal discipline and debt management after former Minister for Economy, Aiyaz Sayed-Khaiyum said that debt, which was supposedly a very bad thing for the country, is now going to be above $10 billion under the Rabuka led government.
While responding to Sayed-Khaiyum’s facebook post, Professor Prasad says it's under the FijiFirst and Sayed-Khaiyum that Fiji's debt increased from $2.7 billion in 2007 to almost $10 billion.
Professor Prasad says the man who now wants to be the "defacto Leader of Opposition" is the same person that was responsible for the $6 billion addition to our national debt under his leadership as Finance Minister from 2014.
He says the $6 billion increase out of the $7 billion increase was directly piled up by Aiyaz, and he should be the last person to lecture us about debt management.
Professor Prasad says in the 2023/2024 budget, they have halved the fiscal deficit from an average of 9 percent in the last few years to 4.8 percent.
He says they have put the debt to GDP ratio on a sustainable path from the peak of 90 percent under FijiFirst to now below 80 percent. Professor Prasad says they have been responsible and taken the hard decision to fix the revenue problem by permanently adding $600 million additional revenue to Government coffers, and also made sure that the vulnerable are protected and the economic recovery is not disrupted.
He says this has in fact built credibility amongst the people, businesses and development partners about the coalition government's commitment to fiscal prudence.
The Deputy Prime Minister says on expenditure, Aiyaz Sayed-Khaiyum has quickly forgotten that his 2017/2018 had planned expenditure of almost $4.4 billion and again in his 2018/2019 budget he had allocated a total expenditure of almost $4.7 billion, and he did that with a revenue hole of over $1 billion.
Professor Prasad points out that Aiyaz promised a large budget before the 2018 elections and delivered $1 billion less because there was no money.
He says Aiyaz went that far to mislead the people.
Professor Prasad says the 2023/2024 budget of $4.3 billion is still lower than those two budgets but more importantly, they are basing the expenditure on a sound revenue forecast and financing plan and not like the fake budgets that were made in the past by Aiyaz.
He says they have received an overwhelming support for the budget given its prudence and inclusiveness.
The Deputy Prime Minister says they have a plan to fix the debt situation and our economy and they will not be distracted by people like Aiyaz Sayed-Khaiyum who were solely responsible for creating the mess that the coalition government is trying to fix.
He also says Aiyaz Sayed-Khaiyum has also presented a convoluted analysis of the tax exemption to the water sector to mislead everyone and try to portray that Fiji has lost government revenue.
Professor Prasad says while Aiyaz talked about the corporate tax exemption, he selectively ignored that water resource tax has been increased from 18 cents per litre to 19.5 cents per litre.
He says overall, there is a revenue gain for Fiji through this arrangement and at the same time it also allows our major investors to claim tax credits overseas which will help us with more reinvestment in Fiji.
The Deputy Prime Minister says basically, under this new arrangement, all bottled water companies will have a corporate tax holiday and they will only pay the water resource tax.
He says for those extracting less than 10 million litres per month, the rate will be unchanged, however for those extracting more than 10 million litres, the rate has been increased from 18 cents to 19 cents with an overall gain in revenue for Fiji.
While responding to Sayed-Khaiyum’s facebook post, Professor Prasad says it's under the FijiFirst and Sayed-Khaiyum that Fiji's debt increased from $2.7 billion in 2007 to almost $10 billion.
Professor Prasad says the man who now wants to be the "defacto Leader of Opposition" is the same person that was responsible for the $6 billion addition to our national debt under his leadership as Finance Minister from 2014.
He says the $6 billion increase out of the $7 billion increase was directly piled up by Aiyaz, and he should be the last person to lecture us about debt management.
Professor Prasad says in the 2023/2024 budget, they have halved the fiscal deficit from an average of 9 percent in the last few years to 4.8 percent.
He says they have put the debt to GDP ratio on a sustainable path from the peak of 90 percent under FijiFirst to now below 80 percent. Professor Prasad says they have been responsible and taken the hard decision to fix the revenue problem by permanently adding $600 million additional revenue to Government coffers, and also made sure that the vulnerable are protected and the economic recovery is not disrupted.
He says this has in fact built credibility amongst the people, businesses and development partners about the coalition government's commitment to fiscal prudence.
The Deputy Prime Minister says on expenditure, Aiyaz Sayed-Khaiyum has quickly forgotten that his 2017/2018 had planned expenditure of almost $4.4 billion and again in his 2018/2019 budget he had allocated a total expenditure of almost $4.7 billion, and he did that with a revenue hole of over $1 billion.
Professor Prasad points out that Aiyaz promised a large budget before the 2018 elections and delivered $1 billion less because there was no money.
He says Aiyaz went that far to mislead the people.
Professor Prasad says the 2023/2024 budget of $4.3 billion is still lower than those two budgets but more importantly, they are basing the expenditure on a sound revenue forecast and financing plan and not like the fake budgets that were made in the past by Aiyaz.
He says they have received an overwhelming support for the budget given its prudence and inclusiveness.
The Deputy Prime Minister says they have a plan to fix the debt situation and our economy and they will not be distracted by people like Aiyaz Sayed-Khaiyum who were solely responsible for creating the mess that the coalition government is trying to fix.
He also says Aiyaz Sayed-Khaiyum has also presented a convoluted analysis of the tax exemption to the water sector to mislead everyone and try to portray that Fiji has lost government revenue.
Professor Prasad says while Aiyaz talked about the corporate tax exemption, he selectively ignored that water resource tax has been increased from 18 cents per litre to 19.5 cents per litre.
He says overall, there is a revenue gain for Fiji through this arrangement and at the same time it also allows our major investors to claim tax credits overseas which will help us with more reinvestment in Fiji.
The Deputy Prime Minister says basically, under this new arrangement, all bottled water companies will have a corporate tax holiday and they will only pay the water resource tax.
He says for those extracting less than 10 million litres per month, the rate will be unchanged, however for those extracting more than 10 million litres, the rate has been increased from 18 cents to 19 cents with an overall gain in revenue for Fiji.