2015 Budget Response by NFP Opposition Whip, Hon Prem Singh: Shadow Spokesperson for National Disast
December 2, 2014 Please Check against Hansard and Delivery
The 2015 Appropriation Bill has been scrutinised during parliamentary debate for the last few days.
A national Budget is an important statement for all our people. It lays the income and expenditure statement of the Government for the ensuing year.
But more importantly Madam Speaker, a Budget is supposed to be a statement of confidence, unity and a national strategy for development.
The 3.336 billion dollar budget has been described as a mother of all budgets by honourable members on the other side of this House. We have heard stories of stones changing into rocks in quick time as they are pushed from a road.
We have heard of the sky shining brightly making me wonder if the sun, moon and the stars that have shone brightly before the history of mankind, have suddenly disappeared. And we have heard of the need for the Opposition to get listening or hearing aid and to listen to and see things carefully.
The honourable member from Ba can be rest assured that we have certainly been listening and watching things carefully as far as his conduct, as they say in sporting terms, on and off the field is concerned, but Madam Speaker, it would be un-parliamentary for me to report our observations.
Madam Speaker, I do understand that Government is overly concerned about its electoral promises. However, Government should not be driven by its political interests but to take heed where our nation is heading. It is important that the Budget is used to build productive capacity in the economy.
Our debt level is steadily rising. What future are we bequeathing to children and grandchildren? As the saying goes, blessed are the youth for they will inherit the national debt!
One perfectly understands Government’s aim of creating economic growth and attracting greater investment but investment, apart from being based on external factors is dependent on confidence. And confidence is a fickle thing.
In this regard Madam Speaker, I have serious doubts about the revenue forecast of 3.1 billion dollars for next year. We can see that, apart from Government’s intention to borrow 363 million dollars, reduction in deficit is reliant on sale of profitable State assets that the Honourable Finance Minister describes as divesting Government shares. As the saying goes, it is the same difference. Whether you sell or divest shares, it means the same thing.
Madam Speaker, selling off profitable State assets for the purpose of balancing our books or reducing deficit is like selling one’s soul for 30 pieces of silver. Government is proposing to sell three key assets namely our Ports, Fiji Electricity Authority and Airport. It would have made sense if non-profitable State assets, statutory organisations or government commercial companies are sold or government shares divested (as the Finance Minister likes to describe it) to cut State losses and make these organisations more efficient in service delivery.
But why sell assets that lay that lays the golden eggs? And what about job security of the workers? The Honourable Finance Minister indicated to Parliament three days ago that talks have already begun on the sale of our Airport. Why the secrecy? Why can’t the Finance Minister tell us who are the interested buyers?
Madam Speaker, will a new employer, even a minority shareholder, honour existing jobs and collective agreements of the workforce in these State entities? I am sure any new owner or even a majority shareholder will clearly say, “Yes we are a new legal entity. We do not know your previous agreements. If you want to work for us now, hereon, you will have to work according to terms and conditions that we lay down”.
Now Madam Speaker, both Airports Fiji Ltd and Fiji Electricity Authority are very profitable organisations. They are not losing money. In the case of FEA, even if its loans are guaranteed by Government, its financial statements as well as government guarantees scrutinised by the Auditor-General reveal that FEA is more than capable of fulfilling its repayment obligations.
Therefore it makes little commercial sense for Government to sell these assets. Some 507 million dollars is being forecasted as revenue for the State from these sales. If this is realized, then it caters Government’s appropriation needs in terms of reducing deficit for one year. What happens in 2016?
Will it, Madam Speaker, mean increased borrowing to reduce the deficit or meet our capital and expenditure budgets if the national appropriation sits around the current levels? Will it mean identifying and selling off more of the dwindling list of assets that we have? These are pertinent questions that need answers.
Madam Speaker as the Opposition spokesperson for National Disaster Management, I see that Government has allocated a sum of $3 million for disaster rehabilitation and disaster risk and mitigation.
I am sure that more funds are needed for disaster rehabilitation and one million dollars allocated specifically to this programme is not enough given the adverse effects of the drought. While there is provision for more allocation from the miscellaneous Head of the Budget, there is no allocation for dredging of major rivers, particularly Nadi as parts of Nadi is below sea level.
We all know the natural phenomenon that after a drought there is always a major flood, the two recent devastating floods of 2009 and 2012 are a testimony to this fact.
Furthermore Madam Speaker, the Honourable Ministers for Agriculture, Sugar and National Disaster Management should inform this Parliament if any survey has, is, or will be done by their respective ministries to assess the impact of the drought on agricultural crops, livestock and sugar.
Only a comprehensive survey will able to determine the kind and amount of assistant and crop rehabilitation packages needed for the recovery of these industries or sectors. With intermittent rain being experienced in the drought affected areas, the time is now right to rehabilitate the crops but this can only be done through proper management and utilization of funds in the relevant areas.
Madam Speaker, my honourable colleague the Tui Cakau Ratu Naiqama Lalabalavu spoke about the urgent need to revitalize the sugar industry through injection of meaningful and sustained funding.
In my maiden speech on 16th October, I had pointed out that the industry’s crop production had declined by 50%. There has been a slight improvement when one looks at the end of season statistics for the 2014 season. Cane production is 1.83 million tonnes with sugar production at 226 thousand tonnes. But Madam Speaker we are still a long way from achieving a production of more than 3 million tonnes of cane and 300,000 tonnes of sugar.
I see that the Fair trade coordinator and development manager Habib Khan through the media recently also emphasized this fact by saying around 3.6 million tonnes of cane was needed to be produced in the next three years.
I could not agree with him more but Madam Speaker if the TCTS ratio of 8 tonnes to one tonne to sugar is maintained from his season then 3 million tonnes of sugarcane will produce 375,000 tonnes of sugar. This will be the ideal minimum benchmark.
The Honourable Prime Minister and Minister for Sugar while addressing the 46th session of the ISO Council in London on November 29th said and I quote: –
“The abolition of EU sugar production quotas post 30 September, 2017 and the consequent adverse implications on sugar prices poses a very big challenge indeed. Moreover, EU sugar prices have already come under pressure, with significant falls compared to prevailing prices over a year ago. So suppliers like Fiji are having to prepare for a reduction in our export revenues even before 2017 – a sobering prospect for any developing nation”. –
A sobering prospect indeed Madam Speaker. The allocation of 5 million dollars for cane planting for the last few years has seen little impact in the increase of cane production. Much more is needed. I can see from the Budget that there is a little over 36 million dollars listed under Head Number 35 as Aid in kind from the European Union for social mitigation programme. There is no explanation in the Budget Estimates or in the Supplement as to what his means and the Minister for Finance in his right of Reply should clarify this.
The issue of expiring leases Madam Speaker is a factor that is significantly affecting the productivity of cane farmers and the industry as a whole. The Fiji Sun on 4th November 2014 reported under the heading “6284 land leases renewed under Bainimarama leadership”, quoting the Permanent Secretary for Sugar Manasa Vaniqi as saying that reforms undertaken by the Bainimarama government in the sugar industry had resulted in the renewal of 6284 sugarcane land leases.
But Madam Speaker, the official statistics from the i-Taukei Land Trust Board shows otherwise. The statistics show that from 1997 to 2014 8151 cane leases have expired. A further 1373 leases will expire in the next three years until 2017 bringing the total to 9524. Only 5105 or 53.6% of leases will have been renewed.
The Honourable Minister for Agriculture Inia Seruiratu is right that land has been the subject of exploitative politics. But he is wrong in blaming past governments for this problem. Between 2007 and 2014, when there was no democracy, 2899 cane leases expired. Out of this 1722 cane leases orb 59% have been renewed. Between 1997 and 2006, 5252 cane leases expired. 3001 cane leases or over 57% leases were renewed. And under this government’s stewardship from 2007 to 2018, 4272 leases will expire until 2017. And from 2007 until 2017, 2104 leases will be renewed. This is 49.25% rate of renewal, worse than the period of what Honourable Seruiratu describes as race-based politics.
Madam Speaker there is an urgent need to resolve the issue expiring ALTA leases to have a viable sugar industry beyond 2017.