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  • Writer's pictureNational Federation Party - Fiji

Budgeting Money and Budgeting Carbon


by Seni Nabou, NFP General Secretary

Opinion piece published in the Fiji Times on:

Saturday 15th December 2022

When the new "mini" budget will be handed down on 24 March, hopefully without the theatrics of table-thumping arrogance from the Government side, it will be 4 months ahead of the amended financial year, which ends on 31 July.

It is staggering that the Government permitted itself by its fast-tracked law, to table another budget 8 months after the substantive annual budget was handed down only last July.

Any other profession that grants such a critical national imperative such as the budget, with the leeway to make adjustments on a whim as per section 13B of the Financial Management Act, would field serious questions as to its capabilities.

Surely with the history and experience of national budgeting as its core business in the Economy Ministry, the cadre of bureaucrats there should have the best tools possible on-hand to project future fiscal trends and risks, or have the wherewithal to make prudent buffers available, within the law?

The budget consequential law change, made during last year's budget, added a section 13B(1) which says:

"The annual budget may be amended during a financial year through a supplementary budget approved by Parliament."

There is no such thing according to their own law that provides for a "mini-budget" or "revised budget", and this is why words matter.

What's the reason?

When tabling the supplementary budget, section 13(B)(2) of the Financial Management Act lays out the requirements for the Minister for Economy.

The Minister needs to table in Parliament a supplementary budget "when changing the total expenditure, borrowing or revenue of an annual budget as a result of a deviation from the fiscal strategy", and this budget must be accompanied by a Bill for an Appropriation Act, the budget estimates, and the reason for the supplementary budget.

The first thing to note is that the Financial Management Act clearly states that the Economy Ministry must not deviate from its fiscal strategy unless an economic shock occurs, or the effects of the economic shock cannot be met through the annual budget, and finally if the deviation is approved by Cabinet.

Upon meeting that criteria, "the Minister must, as soon as practicable, inform Parliament of the deviation and the reason for the deviation."

Nobody has heard any justification as to why this supplementary budget was even necessary in the first place.

The first inkling that anybody got that a supplementary budget was in the works, was thanks to the Fiji Sun's little blurb on 17 February, under a "must-read" boxed news piece.

Only the Fiji Sun (of course) picked up on the Minister for Economy's side-bar remark about a "mini-budget", while he was handing out award letters to MBBS students.

The Fiji Sun article directly quoted the Minister for Economy, as follows:

"If there is a need we might do one and hopefully we are able to deliver one in March," he said.

"We are doing an assessment, but the news is there is likely to be a mini-budget."

That admission alone was quite telling. Did the Government really have a reason, or not?

The most compelling but non-admissible reason could be the dry state of the national coffers, where major shortfalls have been lifted by two separate tranches of direct budget support, from Australia, New Zealand and other donors, even after the last budget was passed in July 2021.

It is downright selfish to rely on donor's direct budget support, treating them like ATMs at will, when their own taxpayers also have pressing needs.

During a press conference in February this year, the public is then made aware that this supplementary budget is scheduled for 17 March, and by the Minister for Economy's direct quote in both FBC and FijiLive, is to only cover a period of 5 months.

Why 5 months when the end of the financial year requiring the annual budget (by law), is 31 July - 4 MONTHS away?

Thanks to the exposure by Opposition MP, Hon Filipe Tuisawau the public is then made aware of the change to the date of the supplementary budget, from 17 March to 24 March.

It is here that we gather that a pre-scheduled March parliamentary sitting, with all the paperwork for questions and motions duly filed by the Opposition, has been shoved aside for this supplementary budget.

At that press conference the Minister is captured on FijiLive news in a direct quote saying:

"Fiji's economic and financial landscape has changed and this needs to be reflected in the mini-budget. We had made an announcement earlier there will be a mini-budget."

So did the change to our economic and financial landscape go from "Dinau" to "Very, very Dinau"?

Or are things looking rosy as heralded by the Central Bank boss, Arif Ali in the Fiji Times of 25 February, where he said the outlook for 2022 remains positive, because the December 2021 Business Expectations and Retail Sales Surveys (RSS), were good?

Only a 5-month long budget?

Judging by the frantic efforts by the Ministry of Economy convening these consultations, it's hard to see how the sweeping, open-ended sessions are supposed to help them develop a targetted, 5-month long budget.

The consultation sessions begin with colourful powerpoint excel graphs, but the reactions are diverted towards very real bread and butter concerns spanning from COVID19 financial assistance policies, high cost of living, reducing the social welfare pension age from 65 to 55 years, landslides from river banks in certain villages, the need to continue waiving market stall fees, the OHS standard of market facilities, the outsourcing of BioMed facilities, whether Government will top up FNPF members general accounts that sustained them during COVID19 if they had funds, etc.

The challenges requiring the Minister's attention will continue to be raised. Our people just want to be heard, and they have every right to insist on a 'performance management assessment' of those whose salaries they pay for.

What our people will have little appetite for, however, is jhoot and lasulasu on overdrive.

Is it realistic to expect this 5-month long budget to deal with all these pressing issues? Or is this supplementary budget going to ultimately carry the Government right through to elections? Time and money (or lack thereof), will tell.

What of the Carbon Budget?

Prior to Fiji's contingent leaving for COP26 last December, we recall the Climate Change Act that was passed, and much-vaunted by that iPad interview in Glasgow.

The climate law was heralded then by the Prime Minister as our ‘North Star', targetting carbon footprint accountability.

If indeed this law is the Stella Polaris that it claims to be, in a 5-month long budget, how is the Government proposing to begin scaling back its carbon emissions through the new-fangled carbon budget process?

The NFP had raised our reservations when this carbon budget provision was first included in the draft law. We were wary that Fiji's readiness was non-existent, and that it could become tokenistic simply to earn brownie points for the annual climate change COP pilgrimage process.

Further, we said that if a 5-year carbon budget cycle was out of synch with the annual budget cycle, we could be cutting back on the domestic carbon footprint, without the transitionary dialogue, funds and policies to build readiness.

Now that 5-month long budget modalities enter the fray because the financial management law allows it, it can further confuse predictability, projections or planning.

Certainty and readiness is necessary if Fiji is to ease into its first carbon budget to span from 1 January 2026 to 31 December 2030. But the preparatory work should begin now.

Scientists of the Intergovernmental Panel on Climate Change (IPCC) recently released a report stressing that "maladaptation” such as the use of seawalls to protect against sea-level rise and storm surges, could be counterproductive.

Instead, the report suggests that green buffers like mangroves are perhaps preferable while noting they are not suitable for every location.

This IPCC report has very real budget implications (even if it is only a 5-month long budget), given that cyclone season ends next month. However extreme weather events as we observe from the distressing floods in Australia, are no longer tied to seasons and meteorological assessments.

Carbon trading in green and blue hues

The Minister for Economy is also doing the hard sell for green carbon trading especially among customary landowners who are custodians of native forest areas.

Similarly, blue carbon ventures are being explored with global groups even while the law, as we had earlier cautioned, was lacking in specificity, particularly the registration process for blue carbon sequestration property rights.

There are advantages to blue and green carbon trading, but the fullest of Free, Prior and Informed Consent is a necessity by the very principles set out in the climate law.

The granting of this consent must move away from old paradigms where freehold and customary landowners are mere minnows in the resource rent equation but can become owners of the companies trading these carbon stocks on an equal footing globally after they have been guided and helped to carry out the institutional investments while ensuring robust due diligence safeguards.

These are the preparatory feasibility tasks that a 5-month long budget should begin to look at. Not just the salesman's pitch of $20,000 to keep 5 acres of forests intact, without mentioning the adjustments that must be made by tribal clans, if they lease their land for carbon trading, for 10 or more years.

The equity factor of returns on their investment will only be clear if there is transparency in the numbers, when weighed up against the going purchase and sale prices of carbon credits on the global market.

More rocking or more rolling?

What is one to expect on 24 March?

Can we expect the roll-back of the public health emergency for COVID19, given the tapering off of infections especially when elections are to be held anytime between July this year, to January next year?

Can we expect clear laws for political parties about who will receive and "approve" party manifesto's needing a financial commitment, and by when?

Can we expect that the Minister for Economy's brow-raising proposal for Fiji to explore industrial hemp farming, to be given legs?

Can we expect that Ministry or Health to give us statistics on numbers of deaths caused by myocarditis or stroke from April 2021 to February 2022, by age, ethnicity, gender, divisional location and vaccination status?

Can we expect Tourism Fiji and FICAC to table some overdue Annual Reports?

Whatever we eventually hear on 24 March, it will only then become clear whether the Government is really rocking, or simply rolling towards the exit lane.


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