Government must take decisive action to show Compassion and Empathy
July 1, 2022
The Fiji First government must stop using the Russia-Ukraine war as an excuse not to take immediate and decisive action to show compassion and empathy towards the people who are reeling from rising fuel prices and cost of living, said National Federation Party Leader Professor Biman Prasad.
Professor Prasad said the government must reduce the duty on fuel by at least 20 cents per litre when it announces the 2022/23 Budget in two weeks from now.
He said when fuel prices were at its lowest in 2020, the government didn’t allow people to benefit from it by imposing an extra 20 cents per litre on fuel saying it would still be affordable. The NFP Leader also said as an immediate measure, government must change its policy on charging duties on goods to ensure even a small reduction in the price of goods especially fuel, essential items and basic food products.
“It is clear that zero-rating of some essential items and basic food products has not arrested inflation due to rising prices. The latest hike to fuel prices will have as flow-on effect and lead to further increases to prices of all goods and services”.
“It needs decisive government intervention and the immediate thing that can be done through the budget is the reduction of duty on fuel by at least 20 cents per litre and charging duty only on Freight on Board (FOB) instead of the current policy of charging duty on Cost Insurance Freight (CIF)”.
“The current policy of charging duty on CIF earns government more revenue from both duty and VAT but at the end of the chain it is passed onto the consumers. Charging duty on FOB only means less revenue for government as duty and VAT is levied only on value of the goods”. “But it is the only sensible thing to when prices are spiraling out of control. Both these measures can be in place until prices stabilise and start coming down. And this is not going to happen in the next 6 months”.
“And also extremely important is the fact government’s projected borrowing is not linked to political expediency and electioneering but aimed at providing genuine income support and subsidies for transportation and also to boost the pay packets of the many thousands of workers earning below the tax threshold of $30,000 per annum”.
“The government must learn from New Zealand, whose prudent economic management will pump NZ$1 billion in various subsidies to help its citizens. The NZ government has cut 25 cents from the fuel excise duty, increased pay packets and superannuation, amongst other things as part of the relief measures”.
“Therefore, the Fiji First government, which always says it will leave no one behind, has a moral duty to show empathy, care and compassion towards our people in their hour of need”.
Professor Biman Prasad Leader