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published 24 November 2000
Media release The interim regime intends to release its own budget for the year 2001 today. This Budget will be illegal and unconstitutional. Justice Anthony Gates has already ruled that the regime has no "constitutional foundation to legality". It is imperative that constitutional provisions be followed in the presentation of any budget and in the disbursement of public funds. Only the constitutionally elected Government has the authority to raise revenue through taxes and to authorise the disbursement of public funds. The People's Coalition Government would have tabled its Budget 2001 in Parliament on November 3 but was prevented from doing so by the events of May 19 and thereafter. We outline below the essential features of the people-oriented People's Coalition Budget 2001. The People's Coalition had managed to achieve a Budget surplus of $47million in the first quarter of 2000. This was an encouraging trend and followed yet another milestone achievement by the Coalition when it reduced by about $50 million the 1999 Budget deficit forecast by the previous Rabuka Government. With better than expected revenue performance as a result of tough compliance and enforcement measures and efficient control over public expenditure, the Coalition expected a Budget surplus of between $60-$80million. This would have increased to $100 million with improved performance of public enterprises under the Coalition's direction. This surplus would enable the People's Coalition Government to channel more funds into: · helping the poor - through better housing and self employment opportunities for the disadvantaged in our society · improving infrastructure- upgrading infrastructure and improving the provision of public utilities such as water, electricity, telecommunications etc. thereby creating a better investment climate and more job opportunities · strengthening the economic bases of the nation - particularly agriculture, fisheries and forestry thus enhancing living standards and incomes of the rural people · developing information technology industry thereby providing hundreds of quality jobs for our youths Tax relief - second stage The People's Coalition Govt(PCG) Budget 2000 provided tax relief to all through increases in tax deductible allowances such as child and spouse allowance, insurance and FNPF limits.This largely benefited lower paid workers. The second stage of the tax relief package was to reduce tax rates across the board. Income tax thresholds were to be raised further over the next three years and taxes reduced so that by the end of the Coalition's term, the maximum rate would have fallen to 30% from the current 35%. The rates for those in the lower pay bracket would have come down a lot more. Reduced revenue through lower tax rates would be more than offset by higher economic growth and a larger tax base. Lower taxes would mean more take home pay for people. They would spend more and in turn generate higher growth, employment and incomes for all. Investment Investment rates in Fiji were dismally low at 5% of GDP in the years before 1999. The Coalition Government aimed to raise the investment ratio to 20% of the GDP within its term of office. Numerous multi-million dollar projects, particularly in the tourism industry, were in the pipeline. Improved security, property rights regime and incentives would have seen significant growth in private sector investment including those by local businessmen, farmers and small and medium enterprises. We aimed to improve consumer confidence to achieve sustained
increases in consumer expenditure. Inflation was kept low with efficient pricing policies and better monetary management despite the increased production. The PCG achieved negative inflation rates for much of its term through lower prices for essential goods and a good taxation regime. Low inflation rates would have continued in 2001. Budgetary Measures The main thrust of our Budget 2001 was to steer Fiji into becoming a thriving modern State based on social and economic justice. Particular emphasis was to be given to encouraging enterprise, initiative and industry. Monetary and Financial Policies This would be aimed at achieving low inflation rates and healthy foreign reserves. Fuel prices to be kept to reasonable levels through transparency in pricing. Oil companies were to submit audited accounts to claim price increases. Under the illegal regime, fuel prices have soared about 20% because it has been granting arbitrary increases to please oil companies. Wages Our wages policy will continue to target the alleviation of poverty while encouraging productivity. Wage increases would be determined through negotiations and agreement between employers and trade unions in the reconstituted Tripartite Forum. Bank Charges and Interest Rates High interest rates and bank charges deter incentives for growth in the Fiji economy. People's Coalition intended to ensure interest rates and bank charges were kept at fair and reasonable levels. The setting up of a Banking Commission in the 2001 Budget would have monitored the level of fees, charges and interest rates. It was to operate independently of the Reserve Bank. A Banking Ombudsman was to be appointed to deal with disputes between customers and banks, insurance companies, credit unions and other financial institutions. These measures were designed to improve the response of the banking sectorto the economic growth needs of the nation and to protect consumers interests. It must be appreciated that better regulatory efficiency of the financial sector is crucial for growth in Fiji. The PCG wanted the financial sector to remain vibrant, profitable and responsive to the needs of the people. Exchange rates and Exchange control A stable currency in 2001 would have continued to provide
stability to our trade. Exchange controls were to be liberalised with
restrictions applied only in the rarest of circumstances. Money exchange
facilities were to be encouraged to boost exchange market and tourism. In the South Pacific region there is a lot of scope for trade. Budget 2001 will provide a special allocation used to enhance regional and international trade. The Coalition favoured taking a targeted approach to Fiji's export markets, identifying and pursuing those areas where we are able to compete internationally while ensuring decent wages and working conditions for our workers. Economy Under the Coalition's management of the economy, negative economic growth or a contracting economy would be a thing of the past. Following two successive years of negative performance, the People's Coalition turned the economy around to positive growth in 1999 of 7% and an estimated growth of 5.6% in 2000. Our policies would have ensured a sustained growth of 6% per year in the future. Job creation for all From a massive unemployment rate of 25%, the Coalition began creating jobs by the thousands in 1999 and 2000. With restored annual economic growth of around 6%, the unemployment problem would have been eliminated by 2004. Affordable Public Utilities PCG is committed to ensuring that essential services remain within the reach of the poor. To this end, the following measures were taken: · Water rates reduced by 10%. In 2001 the water billing system was targeted to be improved and made more efficient so as to reduce the burden on consumers · Electricity rate was reduced by 1.5c/unit with a further 1.5c/unit cut to be effective August 2000. The reductions were aimed at achieving a rate of 17c/unit by 2004, a total reduction of 25% or 6c per unit. · International Telecom charges were reviewed and reduced in
2000. Local charges were to be reduced in 2001. Agriculture ALTA: A cabinet subcommittee was set up to liaise with the NLTB on ALTA. Our approach was three-pronged: · leases for agricultural land to be commercially sustainable · assistance to landowners opting to enter commercial
agriculture · tenants losing leases to be assisted to begin a new livelihood elsewhere Negotiations on the successor to ALTA were to be completed by end of 2000 with Budget 2001 to carry relevant financial allocation for assistance to landowners entering commercial agriculture and State resettlement projects for displaced tenants or provision for equivalent cash resettlement grants. · Financial allocation was to be made in Budget 2001 for comprehensive, nation-wide consultation on landuse and agriculture, leading to the convening of a national summit on the subject by June 2001. In addition the Coalition would: · set up a Landuse Commission to identify and put to use vacant land. A $50,000 allocation to carry out a study of landuse Commission. · Improve sugar-milling efficiency: The FSC board was asked to study the desirability of operating each of the 4 mills as independent units/cost centres. The proposal would have been implemented in 2001 to reduce unit cost of production and achieve the required efficiencies to remain profitable and internationally competitive. · Diversification of agro-based industries: Funds were allocated in 2000 for diversification. This would continue. A new science and technology department would be tasked to co-ordinate the advancement of agro-industries · Reducing cost of agricultural inputs: a thorough study of agricultural input pricing was to be carried out and recommendations implemented. · Revitalising agriculture: Agriculture Budget was increased by $10 million in 2000 to revitalise, among others, meat, fruit and vegetable production. The Budget was to be increased in 2001. Rewa Rice was rescued to revive the rice industry particularly in Dreketi, Navua and the Rewa Delta. Tourism Tourism development was a major thrust of the People's Coalition Government both as a revenue earning measure and to boost rural incomes through eco-tourism development projects. In the first year of PCG's term in office, tourism was poised for a real take-off with more than $350 million worth of hotel projects ready to get off the ground. They were expected to boost the construction industry and create thousands of new jobs. Once completed, the new hotels would have provided at least 2000 additional jobs. PCG had also targeted major infrastructure development to support tourism development on the Coral Coast, in Nadi and in the interior areas of Viti Levu and Vanua Levu to support eco-tourism development. Funding for these would have continued in 2001. Such development would also have provided improved leisure activities for our people. Rural Development Adequate funding would have been provided to improve rural access to State services (water, electricity, telecom) and to improving rural infrastructure. Village housing: The People's Coalition had initiated data collection for a Fijian village housing upgrading project. Funds were to be allocated in Budget 2001to begin a comprehensive, nationwide programme to upgrade facilities and conditions in Fijian village housing. Labour and Industrial Relations A framework for the re-establishment of the Tripartite Forum was agreed to between the three parties, the employers, the employees and government. The Forum would be the key to labour and industrial relations mechanism for ensuring industrial harmony and an industrial relations environment that would sustain growth in the economy. Infrastructure Focus would be on: · upgrading and extending water supply systems in urban areas A feasibility study on a cross-country highway linking Suva and Nadi and opening up areas in the interior of Viti Levu was to be commissioned. Similar work for a new highway across Vanua Levu was also envisaged. Port facilities were to be substantially improved and modernised based on a masterplan drawn up by consultants from Singapore brought in by the People's Coalition Government. Housing Housing Authority interest rates for families earning less than $6,500 a year were brought down to 6% from the current 11%, by May 2000. Further reductions were due in July, had the coup not interfered, which would have brought those earning up to $9,500 into the 6% ambit. Beginning 2001, the ceiling was to increase to $12,000. The 10% VAT was also removed from all first home purchases in 2000 for values up to $50,000. This ceiling was to increase to $60,000 in Budget 2001. A six month grace period was introduced whereby loan
repayments were frozen in cases of involuntary job losses. This was to continue
in 2001. The Squatter Problem About 14,000 families currently live in urban and peri-urban squatter settlements. People's Coalition Government programme for resettlement of these families to their own residential lots were to continue. We had planned to eliminate squatter settlements by the end of our five-year term. The Poor and the Aged Eliminating poverty means providing: · adequate incomes from jobs The Coalition's incomes policy would have ensured workers get adequate incomes so that they remain outside the poverty trap. We had already started reducing the prices of basic commodities. VAT was removed from basic food items (flour, cooking oil, tea, canned fish, rice and powdered milk), medical supplies, public transportation and essential educational material. Customs Duty was also reduced on these essential food items. In addition, 17 other everyday household commodities were placed under price control from May 2000. They were removed from price control by the interim regime sending prices spiralling. Funding for social welfare recipients was increased in 2000. This would further increase in 2001 to allow a fairly decent standard of living for those on welfare allowances. In 2000, we allocated funding for a feasibility study into an old age pension scheme. The scheme was to begin operating in 2001 under the recommendations of the study. By the end of the Coalition's term all old people without pensions or other sources of income would have been brought under the pension scheme, each receiving adequate payments to sustain themselves. Health People's Coalition Government effort in upgrading hospitals, improving health care facilities at health centres, improving hospital staffing and increasing the supply and availability of medicines was to continue in 2001. Government had made special provisions to ensure availability of life-saving drugs to the poor and aged. Ba and Nasinu were to receive funding allocations for new hospitals in 2001. The CWM and Lautoka Hospitals would have been upgraded. A new specialised kidney hospital was to be set up in Lautoka in January 2001 providing a major boost to Fiji's medical facilities. Feasibility study for a specialised heart hospital was to be funded in 2001. Or alternatively, the State was to provide funds to take over the responsibility of heart operations. PCG had provided $250,000 in 2000 for overseas medical treatment for the poor. This provision would have increased to $500,000 to assist poor families obtain specialist treatment overseas. Security/Ministry of Home Affairs Statistics show the crime rate had fallen considerably under the People's Coalition Government. Budget 2001 would have continued efforts to: · improve pay and working conditions for the police force to
boost morale Education Increased funding for education to continue. Had it not been for the political unrest, the Education Commission report would have been released and would have formed the basis for national consultations and policy on education. Additional emphasis was to be placed on ensuring tertiary education for all students that qualify with a review of the scholarship scheme. Additional funds would have been provided for the Students Loan Scheme. Women Budget 2001 was to reflect our key policy directions aimed at
: Affirmative Action and Indigenous Fijian Development The 1997 Constitution provides for affirmative action policies and legislation. Funding for such would be based on the Social Justice Legislation which would have been enacted by Parliament by now. Affirmative action policies would have ensured all disadvantaged peoples would have adequate financial and institutional mechanisms to to be gainfully integrated within the mainstream of society. Affirmative action for Fijians would be aimed at integrating the community into the mainstream national and international community and not segregating and shielding them from the increasingly globalised world. Grants to Fijian Affairs Board and Provincial Councils were to increase in 2001 but standard audit requirements would be enforced. This is to ensure that funds benefit villagers most rather than be consumed by a select group of indigenous Fijians as has happened so far. Good Governance and Public Service In 2001, work on ensuring good governance would continue. It would see enforcement of the legislation on a code of conduct for politicians, government ministers and other holders of high office. The report of the Anti-Corruption Commission appointed by the PCG would have been implemented and funding allocated accordingly. The Freedom of Information legislation would have been enacted by now. Conclusion The People's Coalition sympathises with the people of Fiji who have suffered as a result of the May 19 coup. Loved ones have been lost, thousands of workers still face pay cuts and significantly reduced working hours, families have been split up and traumatised and there have been significant financial losses. Yet, the real leaders behind the coup continue to roam at large, enjoying life. They have used innocent people through false propaganda to get rid of a caring government and impose hardships on the nation as a whole. When will these people be brought to justice?
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People's Coalition Government - Fiji Islands |
