No middle ground
Professor Biman Prasad
(PAGE 12 – THE FIJI TIMES SATURDAY JANUARY 16, 2016)
THE year 2015 is gone. We are in 2016 and Government will tell you it is a year full of promise as Fiji First implements its plans to modernise the economy on the basis of its 2016 National Budget.
But the very opposite is the truth. Building or refurbishing new roads at astronomical cost (Fiji Roads Authority has enjoyed the biggest chunk of budget for two years), lavishing $1000 handouts under the so-called Micro Finance Scheme to over 3000 people, giving water and electricity subsidies and free medication are short-term benefits that will not improve the livelihood of our people in the long term.
Despite what Government is saying, Fiji is fast becoming a consumption-driven economy. This will not last. Already Government has forecast a reduction in economic growth from 4 per cent in 2015 to 3.5 per cent in 2016 and a further reduction to 3.1 per cent in the years ahead. This is because Government has to slow down on spending borrowed money. But it seems that the economy cannot grow without it.
The reduction in value added tax (VAT) from 15 to 9 per cent was welcomed by everyone both in and outside of Parliament. It must not be forgotten it was the NFP that had promised to reduce VAT to 10 per cent and also to reduce duties on everyday food items during the 2014 General Election campaign. The Finance Minister ridiculed us saying Government would lose hundreds of millions in revenue.
But while VAT has gone down by 6 per cent from January, 9 per cent VAT has been imposed on basic food items that were zero-rated or VAT-free. The cost of flour, rice, powdered milk, tin fish, tuna, cooking oil, coconut oil and kerosene has increased by 9 per cent from January 1. These items are the most basic and used daily by our poor and ordinary citizens. The price of medicine prescribed by doctors has also increased by 9 percent from January 1, including repeat medication. The first $30 of the FEA (Fiji Electricity Authority) bill, which was zero-rated, has increased by 9 per So where is the relief for the poor and ordinary citizens?
Government owes over $4.4billion in debt. Public debt is close to 50 per cent of our gross domestic product (GDP). This means that, like any household that borrows money to spend, we are becoming too deep in debt to be able to borrow any more. In 2016 we will pay about $270m in interest alone to service our debt. Compare this with the $280 million we will spend on health. This is money that cannot be spent on health, education and job creation.
The Fiji Bureau of Statistics has the results from its 2012/13 survey. Why won’t the Government release these results?
Fiji’s poorest people should be everybody’s concern. First, they are part of our country. If we believe in fairness and equality, we must improve their lives. Even if we do not, a growing number of poor people without opportunities and without hope are a recipe for social instability, crime and a resulting lower standard of living for all of us.
Government can no longer blame previous governments for these problems. It has been in power for the past nine years. These are problems of its making, through its own neglect and mismanagement. For those in Government and many of its wealthy supporters, life is good now. But we lack a vision for our economy beyond the slogans in the budget. Without a clear vision for the economy, consistently delivered, we will all pay a price for this later. There is an urgent need for all of us to come together to discuss these issues, because the Government does not have all the answers.
Government defeated our pro-people motions
(a) Disaster mitigation fund: Thousands of our people in drought-stricken areas of Western and Northern divisions as well as the Yasawa and Mamanuca groups urgently need regular supply of emergency water. Our motion to increase the disaster mitigation fund from $1m to $10m because of the prolonged drought was defeated. Government argued a disaster had not been declared yet. A month ago the Commissioner Western said each person was being provided 20 litres of water for drinking and cooking only. He has indicated this will be further reduced to 12 litres. What nonsense. The water subsidy scheme is supposed to provide 50 litres of water to those qualifying under this scheme. Why the step-brotherly treatment for our residents crying for help?
(b) Motion to increase funding for kidney dialysis from $300,000 to $2m was defeated by Government. Government argued treatment would be provided only for patients who have a chance to get better and not to all cases requiring dialysis. This is clearly a breach of the 2013 Constitution. Section 38 (1) of the 2013 Constitution (Right to health) states, “The State must take reasonable measures within its available resources to achieve the progressive realisation of the right of every person to health and to the conditions and facilities necessary to good health care services” 38(3) states “if the State claims that it does not have the resources to implement the right, it is the responsibility of the State to show that resources are not available”. Government has failed to show it does not have the resources to provide adequate funding for kidney patients requiring dialysis.
(c) Motion to increase funding for cane planting program from $5m to $10m. Government argued $5m was enough and this was also defeated. Anyone well versed with cane farming knows it currently costs $120 to get an acre of land ploughed by a tractor. For fallow land, it is vital the block is ploughed three times and harrowed thrice as well. This alone will cost a grower $720.
The fact it is costly to prepare fallow land for cane planting is proof enough of failure of Government’s cane planting program. Government’s claim that the sugar budget for 2016 has increased by more than $12m is misleading. The real increase is not $12m dollars but $600,000.
A sum of $9.7m is being listed as subsidy to South Pacific Fertilizers Ltd. However this will be administered by the FSC. And this is a loan, not a subsidy. Therefore growers end up repaying the amount, as 100 per cent of SPFL is owned by growers. Who is Government trying to fool?
Furthermore, why should the FSC control this subsidy or loan and not the growers themselves? FSC has no stake whatsoever in SPFL, yet its executive chairman also heads the fertiliser company. This is unjust.
(d) Motion to increase the education scholarship fund by $10m was defeated by Government. Our argument was those low and middle-income families whose children attain high marks but less than 300 marks, should be provided scholarships based on means-tested so they are not burdened with the notion of repaying loan.
Yet Government can allocate $9m for the Fiji International Golf Tournament and $18m for Fiji Airways to promote its upcoming Singapore service. Worse still Government has allocated $11.3m to the Fiji Broadcasting Commission for supposedly public service broadcasting. This is almost a 400 per cent increase from less than $3m allocated in 2015. Why? You be the judge.
Government’s attitude
Pro-people motions are defeated by Government using its numerical superiority. FijiFirst will simply oppose any motion by the Opposition, no matter how credible and logical it is. This is the sad reality. Earlier this year I called on the Government to work with the Opposition so we could take a bipartisan approach to our national problems. The PM rejected this reasonable request. He said Fiji had “no critical issues”.
The rejection of bipartisanship by Government spells doom for Fiji in future. And early this year the NFP will take a decision on its future participation in our so-called parliamentary democracy, because of Government’s dictatorial attitude and outright rejection of bipartisanship to advance the social and economic livelihood of our people.
* Professor Biman Prasad is the leader of the National Federation Party.
The views expressed are his and not of this newspaper.
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