2018–2019 National Budget
Address by A-G & Minister for Economy
AIYAZ SAYED-KHAIYUM –– PART TWO
This is PART TWO of Attorney-General and Minister for Economy Aiyaz Sayed-Khaiyum’s 2018-2019 National Budget address in Parliament on June 29, 2018
CONTINUED FROM YESTERDAY
This is the first time that such a comprehensive, thorough and uniform system of assessment and remuneration has been introduced – and it’s critical that we get this right on the first go. We’re being careful, we’re being fully transparent and we’re being fair, and after we’ve standardised these assessments through a moderation process and carried out another round of training for managers, and we’ll be announcing pay rises this year for high-performing civil servants that will be backdated to 1 August of this year. So, more pay is on the way for high-performing Fijian civil servants. This evening, we’re announcing another landmark investment in our civil servants, as we’re offering 35 scholarship awards for nonteacher civil servants. Of those:
20 scholarships will be awarded to civil servants for post graduate study locally in the areas of teacher training, tourism, agriculture, fisheries and forestry;
10 scholarships will be awarded to pursue a postgraduate diploma or Master’s degree overseas, based on strategic areas of study identified by the civil service; and
■ 5 scholarships will be awarded for civil servants to pursue a PhD programme.
We’re also introducing a scarce skill allowance across the civil service that provides a major cash incentive to attract individuals outside the country who possess skills that are urgently required across Government. The same allowance also provides an avenue for Ministries to pay private sector rates for specialised talent in Fiji. Of course, civil servants who acquire these skills can also become eligible for this.
For the Police, Madam Speaker, we’re restructuring human resources within the Police to regularise over 600 special constables and other Government Wage Earners within the Force. These women and men are working full-time in the vast majority of instances, and deserve to be compensated correctly. This is the first phase of a fiveyear restructure, and in this first phase these new regularised positions will see an increase in salaries to bring them in line with what full-time officers are receiving, and 24.6 million dollars is allocated for that purpose.
Madam Speaker, we’ve increased our grant funding to provincial councils to 1.9 million dollars to raise salaries in line with the private sector, in accordance with the same methodology used to bring pay rises to civil servants. And we’ve done the same for iTaukei Affairs Board, with a total grant of 5.2 million dollars. Madam Speaker, we’ve set aside 62.3 million dollars towards the Ministry of Sugar Industry, we’re continuing our efforts to modernise the industry to prepare it to be more competitive in the global marketplace and more capable of supporting the over 200,000 Fijians and their families who rely on the health of the sugar industry.
Sugarcane replanting, the fertiliser subsidy, weedicide subsidy, farm mechanisation, the subsidy for cane cartage, the rehabilitation
of cane access roads, the incentives we introduced for new farmers to grow cane, cane top-up payments by Government – that is all going to continue. And, as we saw through sugarcane-CARE, this Government is ready to respond swiftly and effectively when our cane farmers are hit by severe weather. What’s new in this budget, is that we will be setting a stabilised price – funded in partnership with the Fiji Sugar Corporation (FSC) – of 85 dollars a tonne for all cane payments for the next three years. We’ve already maintained cane payments over 82 dollars for the last three years, but now we’ve been able to bring a solid level of stabilisation. That’s possible because of tremendous effort of this Government to reduce the cost base for farmers and mechanise this industry. That agenda has allowed the FSC to sell off underutilised assets; and this stabilised price will be funded from the Sugar Stabilisation Fund within the FSC, bringing cane farmers a level of security, certainty and confidence in the sugar industry over the long-term. Government will be funding this measure as well with an allocation in the 2019-2020 Financial Year. Madam Speaker, this is similar to the stabilisation programme we already introduced for Coconut farmers, which will continue. Madam Speaker, it’s a government’s job to give employer’s every possible reason to train their employees. That’s good for business, that’s good for Fijians, and that’s good for Fiji. But the current incentive for small businesses through the National Training and Productivity Centre Levy (NTPC) was in dire need of revamping in a modern economy.
The simple problem is that small businesses face issues of scale, and they need their employees on the job the vast majority of the time. We get that. And the one per cent NTPC levy wasn’t working for these businesses, it was too complicated and an unnecessary burden. That’s going to change, because this levy is going to dramatically reduce to 0.1 per cent. Those funds will still go towards training for employees at the NTPC, which is currently developing new coursework that is more relevant for trainees in the 21st century economy.
We’re also instituting a 0.4 per cent levy paid by all employers who used to pay the NTPC Levy, in the form of a worker’s compensation levy, which is going to have a far more direct and powerful impact for employees in Fiji. The levy will fund a no-fault workplace
...this is a budget that is grounded in the same values that build strong and stable Fijian families: responsibility, integrity, accountability, foresight, and a sense of duty and care for our fellow Fijians. Aiyaz Sayed-Khaiyum Attorney-General and Minister for Economy
compensation fund, in the same model of the very successful Accident Compensation Commission Fiji, so when Fijians are injured, or in especially tragic cases, are killed in the workplace, their families can receive compensation quickly to help them during an incredibly difficult time. So no longer will claims languish on the sidelines for years, no longer will companies have to bear the cost of workers compensation insurance – which costing them around eight million dollars a year – and those who didn’t have insurance at all, will now be protected, and so will their employees. To keep up with workplace training, we’re revamping tax incentives, now giving 150 per cent in tax deductions to all businesses to compensate them for training their staff; with on-the-job training now qualifying under this new incentive. So small business owners now have a real incentive, that is actually designed – very simply -- to the realities they face. Their employees can train through an accredited programme in-house, they can train at the NTPC, they can train locally, they can train overseas, regardless, their Government will support them.
EXPANSION OF HEALTHCARE SERVICES
Madam Speaker, a healthy Fiji is a strong Fiji. And our work to expand access to care and improve the quality of health services throughout the country is growing bigger, better, and more in tailored to most serious health problems affecting our people.
In this year’s budget, we’ve allocated a total of $382 million to the health of the Fijian people, of which $335 million is towards the Ministry of Health and Medical Services and $47.6 million is towards paying doctors’ salaries and recruiting new medical personnel. Madam Speaker, it’s well known by now that we are massively upgrading the Ba and Lautoka hospitals into world-class health facilities through a Public-Private Partnership (PPP), and we’re nearing completion on our work on the Ba Hospital. Again, we’ll be partnering with FNPF on this project to the benefit of our people, and their future. Under the PPP, we will engage an internationally-certified hospital operator to complete the upgrade of these facilities and bring an unprecedented slate of health services to the Fijian people, including better tertiary care, oncology services to treat cancer, kidney dialysis, better maternity care for more Fijian mothers, procedures for NCDs, and for the first time ever, the 24/7 availability of open-heart surgeries. Not only for the wealthy, not only for those who can travel overseas, but for every Fijian. So, real change is certainly coming, Madam Speaker. Real change, impactful change, change that will save Fijian lives.
The project will also provide a wide offering of new training opportunities for medical staff in Fiji and put new, cutting edge medical technologies in the hands of Fijian healthcare professionals. And I’d like to be clear again, this is not a privatisation. All of our staff will always have the option of continuing to work in the public sector.
We’re currently in the process of carefully selecting the right partner for Fiji on this project, and have just issued the request for tender. We expect to identify that partner this year and get this important project underway. Under the PPP, the annual cost to the Government is expected to remain similar to the current costs of running both hospitals, but those hospitals will be delivering more and better services to our people, in new and more sophisticated healthcare facilities. Madam Speaker, the health needs of our people are growing, our population is increasing, albeit slowly, and Fijians are becoming more conscious of their health and keener to access medical services—and that’s a very good thing. In rural areas especially, we still have some Fijians making long journeys to public health facilities, so we need to make a special effort to cater for those communities. That is why we’re introducing a new programme to incentivise General Practitioners to set up shop directly in Fijian communities, that includes peri-urban areas, towns, local communities, and rural and remote parts of the country. We want to give our people the ability to easily and conveniently see a General Practitioner to be consulted on their health and to access basic medical services. If it’s a more complex matter, or serious health emergency, then Fijians should rely on our public health facilities, but they shouldn’t have to make that journey and wait in line for simple health check-ups and treatments. And that’s why we’re announcing this programme. It’s seeking to create a new sector, a strong private GP sector in Fiji, by offering a comprehensive package of incentives. That will include guaranteed income based on the number of patients they are assigned to serve, with additional financial assistance provided to GPs who set-up in deep rural and maritime areas that are a distance away from our public health network, whether that be in
Nabouwalu, Nasorowaqa or Korovou, just to name some examples. We’ll rollout the first trial launch on 1 January 2019. And I’d like to thank the Asian Development Bank and Australian Government for their assistance in developing this programme.
As I’ve said, we’ve dramatically changed the one per cent NTPC Levy on businesses. In its place we’re also introducing half per cent levy to fund this expansion of GPs in Fijian communities. That’s going to have a big impact for businesses of all sizes, because health emergencies for employees, and for their families, can be managed much more quickly when there is a GP stationed directly in a community. And healthy employees are productive employees, and productive employees build strong Fijian businesses.
We’re changing the model of delivery for Fijians benefitting from the Free Medicine Scheme. Families who earn below $20,000 a year can access 142 essentials for free at pharmacies throughout the country. What’s changing is that private pharmacies will now provide medicine to recipients directly, and then bill the Government. It’s going to give these pharmacies a financial incentive to stock these medicines regularly and give recipients more reliable access.
Of the 60.5 million dollars we’ve allocated to capital development in the health sector, 11 million dollars is towards the extension of the new Colonial War Memorial Hospital Maternity Ward. Our Honourable Prime Minister broke ground on that facility earlier this year, and once completed it will house 200 new beds in a facility that will deliver a complete package of coordinated care specially designed for women – the first of its kind anywhere in Fiji, and built to the same standards as anything you’ll find overseas.
$11.0 million is allocated towards the construction of the Navosa Sub-Divisional Hospital which will serve over 10,000 Fijians in the Nadroga-Navosa Province, and provide maternity services, pharmacy services and lab testing, along with X-rays and ultrasounds. We’re providing $1 million to construct a new health centre in Lodoni, $500,000 to extend the Korovou Hospital, $3 million to upgrade the hospital operating theatre and x-ray capabilities of the Lautoka Hospital, $2.5 million towards the upgrade of the Valelevu Health Centre, and $9.5 million to purchase new dental and bio-medical equipment, and a new MRI Machine, and another $43.4 million to purchase new drugs, consumables vaccines, and other medical supplies. All of this will dramatically reduce the travel time for Fijians to access these essential services and new treatments. Because every minute we save for patients travelling to receive the specialised care they require, is another minute
our doctors and nurses have to save the life of one of our citizens. This budget also makes a bold recognition of the critical work undertaken by community health workers in rural communities throughout the country. All of these workers will now be brought in under the Ministry of Health, and a new allocation of $4.6 million will go towards increasing the allowances for the around 1800 community health workers in Fiji from 50 dollars a month to 200 dollars a month.
Last year, we announced the launch of the National Kidney Research Treatment Centre and preparatory works are underway to deliver that state-of-art facility for Fiji. When completed, that facility will be led by Dr Amrish Krishnan – the only active nephrologist in the country.
While that important work is underway, this year, we’ll be further expanding the number of dialysis treatments available in the country, and making those treatments more affordable. We’ve allocated $2.0 million to make four dialysis machines available at a facility in Suva and three more available in Nadi, which will provide dialysis treatment at 150 dollars per session to the public. That’s going to drive down prices generally for treatment in Fiji, and that’s going to save lives. And for Fijians with an annual household incomes below $30,000 Government we will subsidise half the cost of treatments with an allocation of $3.5 million at the new standalone Government kidney centres in Suva and Nadi and the centre run by the Board of Visitors in Labasa.
Other facilities can be included in this subsidy scheme if they are approved by the Ministry of Health as long as the cost of the dialysis treatment is $150 or below. Madam Speaker, currently the law does not permit deductions of more than 50 per cent from the wages or salaries of an employee. Because of this limitation, Fijians are getting seriously uninsured, as they are unable to authorise deductions from their wages or salaries for the payment of life and medical insurance. Many Fijians have simply decided to cease the payment of their life or medical insurance policies from their wages and salaries as they may have other deductions. We want our people to be insured, it saves them money over the longterm, it keeps them healthier and it protects from debilitating financial mishaps. So we are going to amend the law and exclude direct deductions for life and medical insurance and medical schemes from the current 50 per cent restriction. And that’s going to enable more Fijians to actually obtain life and medical insurance policies and maintain these polices through direct
Government will introduce new programme – to incentivise General Practitioners to set up shop directly in Fijian communities – an easy and convenient access for Fijians to see a General Practitioner. Families who earn $20,000 or below per year can now benefit from the Free Medicine Scheme at pharmacies throughout the country.
deductions from their wages and salaries, encouraging a culture of savings and long-term planning.
PRESERVING OUR ENVIRONMENT, PREPARING FOR CLIMATE CHANGE
Madam Speaker, we know that parents across Fiji want more for their children than they had for themselves, more opportunity, more prosperity, and – particularly – they want them to inherit a Fiji that is safer and more secure. Right now, the worsening impacts of climate change are putting all of that at serious risk.
Our environment, our economy and our secure future are all under siege from the disastrous climate impacts; the rising seas, the changing weather patterns and the tropical cyclones that are ravaging our country.
Madam Speaker, we cannot budget the exact amounts that cyclones will cost us each year, but we are blessed, Madam Speaker, that we have an economy that has been strong enough to support affected Fijians in the immediate aftermath of these storms. This year, we were able to immediately activate the CARE for Fiji programme after the back-to-back arrivals of TCs Josie and Keni, a comprehensive relief package aimed at assisting Fijians badly affected by the storms. Todate we’ve disbursed $123 million in assisting around 100,000 Fijian families through Homes-CARE, Farms-CARE, eTransport-CARE, Welfare-CARE, Sugarcane-CARE and Leaseholders-CARE. CARE for Fiji, Help for Homes, and the massive rebuild we undertook following Cyclone Winston have all accomplished tremendous good. But we cannot remain stuck in a dangerous cycle of having to put up massive rehabilitation bills year after year. It’s not sustainable, and if we don’t take action immediately, it is our children and their children who will have to deal with the consequences. Madam Speaker, in total the direct cost to Government and the Fijian people from TC Winston was Fijian one billion dollars in damages. That is a huge amount. And that is not a cost Fiji can afford to pay year in and year out.
That is why, abroad, as we continue on in our Presidency of COP23, our Honourable Prime Minister has remained steadfast in our campaign to rally the world to more ambitious climate action through the Talanoa Dialogue, and seek the full implementation of the Paris Agreement on Climate Change. Because no matter how much we reduce our own carbon footprint, our secure future depends entirely on the commitment and actions of the rest of the world.
So we cannot relent on the global stage, and we thank the Honourable Prime Minister for the tremendous work he’s done to unite the world in this important campaign. Our Presidency, and his leadership, are historic achievements so far, and we will continue to demand more action on climate change all the way up to our handover of the COP Presidency to Poland this December, and beyond.
Our climate advocacy will continue through our Chairmanship of the Small States Forum, a special grouping of states within the World Bank which we have been tasked with leading because we have been at the forefront of opening up concessional financing for climate vulnerable countries. And during our hosting of the Asian Development Bank Annual Meeting next year. Really, Fiji is fast becoming a place where international and regional businesses get done. And we’ll also be welcoming the World Exchange Congress to Fiji in 2020. Because of our Honourable Prime Minister’s efforts, we’re in a strong position to negotiate with the ADB and World Bank to access financing mechanisms that can be activated following serious natural disasters.
Not only in the form of concessional loans, but in trigger-based immediate grant assistance, as we are seeking to move away from an income-based financing system towards a system that responds more effectively for those nations most vulnerable to climate change, like Fiji.
Madam Speaker, we’re working to develop new insurance products to open up immediate flows of grant assistance to Fiji and affected Fijians in the aftermath of severe weather events. Those products are enormously complex, but we’ve already begun working closely with the World Bank, who is currently modelling a parametric insurance programme in Fiji. That programme would mean that in the aftermath of a serious storm, if a home is lost, immediate funds can be paid out to affected Fijians. And we are also looking to apply that model to crop insurance in Fiji. For both home and crop insurance in Fiji we’ve allocated $1.4 million to cover the initial development costs and premiums once this scheme rolls out. I’d like to take this opportunity to thank the IFC for helping us move this important progamme forward.
Here at home, Government is aggressively investing in our national infrastructure to protect Fijian families from the devastation of a changing climate. Because while Fiji may be extremely vulnerable to rising seas and strengthening storms, the “vulnerable” label doesn’t limit our ambition. We still have our eyes firmly set on building Fiji into the nation we all believe we are capable of becoming. This year, Government will spend $650 million on climate adaptation and mitigation efforts. From stronger schools to seawalls, from sustainable energy to flood-resistant waterways, we’re going all-out to ensure that the Fijian economy is engineered to weather any storm. Madam Speaker, we’ve published the breakdown of how your Environment and Climate Adaptation Levy, or ECAL, has been working for Fiji, and it’s essential reading for every Fijian. It shows we’ve collected $110.6 million and $106 million has already been used to fund new, cyclone-resilient schools, new bridges, solar home systems, cane access roads, and agricultural loans to farmers, among other programmes that are preserving our environment and protecting Fijians from climate impacts.
And the ink is barely dry on a freshly-signed MOU between Energy Fiji Limited and Akuo Energy, a leading renewable energy producer from France, which establishes a joint venture aimed at vastly expanding solar power generation in Fiji, bringing electricity to Fijians living in some of our most remote and maritime areas who would otherwise be unreachable to EFL’s grid. And that’s very good news for the tens of thousands of Fijians who have recently become shareholders in EFL; because when EFL does well, now, so do they.
Last year, we introduced a 10 cents levy on plastic bags. Plastic usage has gone down, but we know we can do better, so we’ve increased that levy to 20 cents this year, and we’re working towards a complete ban of single-use plastic bags in Fiji by 2020. We’re going to work to create more awareness in Fijian communities on the dangers of plastic pollution and on the alternatives for the next two years to give every Fijian and every Fijian business enough time to prepare for this transition.
Madam Speaker, Fiji will be introducing new Euro 5 fuel standards in January of next year that will reduce greenhouse emissions in Fiji, make for cleaner driving and fewer maintenance check-ups for vehicles and lower the fuel bill for drivers on the road in Fiji. We’ve been speaking with fuel companies on this transition during on Honourable Prime Minister’s COP23 responsibilities. It’s an important step in
our campaign to reduce our own emissions, and it shows the rest of the world how a small island nation is fully capable of embracing and adopting greener, more modern and more efficient technologies.
It is this Government that brought about Fiji’s zero-tolerance policy for any development that damages the overall health of our natural environment. And we’re streamlining our unprecedented environmental initiatives this year by combining the Ministry of Waterways and the Department of Environment to form a new Ministry: the Ministry of Waterways and Environment, which is being funded at 70 million dollars
We made this move because waterways are part of our natural environment. Projects that manage our network of waterways are - by definition – environmental projects. So taking these functions under the same umbrella will make funding projects easier, and get projects completed more quickly. Anyone who lived through TC
Josie and TC Keni, or who has watched their town or their community be submerged due to heavy rains, knows how critical that work is. We’ve given 43.6 million dollars to protect Fijian communities – and families – from water inundation by improving drainage systems within towns and cities, maintaining municipal council drainage systems and constructing seawalls, groyne and wave breakwaters for villages and communities faced with the threat of coastal erosion. We’re rolling out new programmes as well, including the construction of drainage on farmland and expanding drainage infrastructure in rural residential communities. On the margins of COP23, we began discussions with the German Government to bring in expertise to take a hard look at the way we’re managing watershed infrastructure, and give their recommendations. This year, the German Development Cooperation will send a technical assistance team to Fiji with a mission to identify suitable climate adaptation activities in the Fijian water sector that are in line with national climate, watershed and waterways strategies, and those recommendations will also highlight opportunities for the mobilisation of climate finance into Fiji.
We will undertake another round of surveys for Nadi River Project, which is designed to alleviate the worsening flooding in Nadi town, to update the Master Plan for the project’s development based on new river patterns, siltation and changing rainfall. We’ve also brought new partners on board to get this project done, with the European Investment Bank and the Asian Development Bank joining on alongside the Japanese Government. Once we complete this latest survey, the Japanese Government has committed to fund the most immediate and pressing work that can be undertaken to lessen the risk of serious flooding in the Nadi Town area. Then the ADB, EIB and Japanese Government will together fund the completion of the project, in partnership with the Fijian Government.
We’re also taking major strides to clean-up Fiji, because as a nation and as a society, frankly, we need to do a lot better. We’ve allocated 1 million dollars to standardise rubbish bins across the country, first starting in Nasinu. This won’t only look better, it will make it crystal clear in every Fijian community exactly where the rubbish ought to be put. Not in the streets, not in our rivers, but in the rubbish bin. Madam Speaker, we’ve allocated 1.5 million dollars towards the collection of rubbish by Government. In our major urban centres, rubbish is choking roadways and communities – and it’s unacceptable. And we’ll now be increasing rubbish pick-ups every day from Monday through Friday, first starting in Nasinu. We’ll also be introducing a new pilot programme in Nasinu to distribute compost bins where Fijians can dispose of organic waste, like leaves and kitchen waste. So we’ll actually be creating compost from that waste for a productive purpose.
We’ve moved the Rural and Local Authority from the Ministry of Health to the Ministry of Local Government, because non-health functions ought to be under the ambit of local governance. It’s the right ministry that makes the most sense for inspecting and approving new developments. This will also bring rubbish clean-up under the Ministry of Local Government, because this again, is a local governance and development issue. Direct health aspects will remain with the Ministry of Health.
We’re also launching a new national competition, across Fiji, to cleanup Fijian communities through the Clean Community Competition. We’re bringing a sense of pride and achievement to Fijian communities who go the extra mile to keep their homes, community areas and streets clean, by judging and rewarding which communities are the tidiest and are kept the cleanest.
Madam Speaker, maintaining a clean environment isn’t a job that any of us can go at alone. It will require a societal change in mindset, from all of us, to think about our actions, and consider the consequences. And we’re going to be working with companies in Fiji to adopt stretches of roads in Fiji to help keep them clean. It’s a great way for companies to give back to the Fijian people who support businesses here in our country, by doing their part in keeping Fiji clean and beautiful, and protecting our natural environment.
CONNECTING FIJI, CONNECTING FIJIANS
Madam Speaker, there is a lot of work to be done to secure our future. But we cannot let that hinder our development aspirations. And because we’ve done well nine years running, we can take a moment, and consider how to lay a foundation of economic growth and development that will benefit Fijians now, in the year ahead, and for years to come.
This Government has already brought the digital revolution to Fiji and into the lives of the Fijian people. eTransport has taken our public transportation into the 21st Century– recording ten million transactions a month around the country. Fijians living with disabilities are currently riding buses for free, that’s going to continue. In fact, we’re now covering pensioners under that same scheme, allowing them to travel on buses in Fiji free of charge, and that cost of travel for both pensioners and Fijians living with disabilities will be paid directly by Government to bus companies.
Fijians are growing more comfortable using MPAISA cards through our social welfare payment distribution, and we’ve been able to quickly and effectively coordinate disaster relief responses through the distribution of electronic cards in the aftermath of severe weather events.
That innovative development must continue, because the ICT sector is proven to be one of the most powerful engines in driving sustainable development, improving living standards and achieving rapid economic growth.
That is why we’ve massively expanded access to telecommunications, connecting Fijians more closely to one another, and connecting Fiji to the rest of the world like never before. This year, we’ve allocated close to 40 million dollars towards the ICT sector, and that’s funding some very exciting new de- velopments.
I mentioned Walesi at the start of tonight’s address; it is now available everywhere in Fiji through a terrestrial and satellite network, and it’s available on smart phones. We don’t need to say just how much Walesi has revolutionised television in Fiji, because our citizens are already living that experience, many at this very moment. It’s been funded at $19 million to fund the rollout of the recently launched mobile application, fund the company’s operating expenses and licensing costs for the different content on the platform. That allocation will also fund the installation of free high-speed Wi-Fi hotspots for FNU students throughout FNU campuses, and increased speed in public Wi-Fi hotspots throughout Fiji beginning with My Suva Park, Sukuna Park, Sigatoka Bus Stand, Koroivulu Park in Nadi, Shirley Park in Lautoka, Ba Bus Stand, Korovou Market, Syria Park in Nausori, Labasa Civic Centre and Savusavu Market– to give all of our young people – and every Fijian – a community space where they can get online, share and create content with their friends and families. At these Wi-Fi Hotspots anyone can receive free high-speed Wi-Fi for 60 minutes that are geo-fenced within these listed locations.
I also mentioned that we’ll be taking questions and feedback on this budget over the new DigitalFiji mobile application. That’s the result of our partnership with the Singapore Cooperation Enterprise, an agency of the Singapore Government. We launched the DigitalFIJI app earlier this month, which currently makes a full Government directory available on smart devices such as mobile phones and tablets, and allows Fijians to communicate feedback directly to their government and then track the status of the feedback while they await a response. We expect to rollout more
features within the DigitalFIJI App down the track, for example, the Fiji Revenue and Customs Service, Fiji National Provident Fund, and the Births, Deaths and Marriages Registry will also offer direct services to our people through this app in the months ahead. We are also streamlining processes of a number of agencies such as the BDM and Companies Office. This digitisation effort is funded at 14 million dollars. We’ll also be announcing new internship opportunities to work with the SCE on the DigitalFiji programme; giving young Fijians interested in ICT direct access to the extremely competitive IT team here from Singapore. Telecentres are being funded at $500,000 to construct six new centres, making for a total of 35 telecentres providing data in remote and rural areas of Fiji. And as those services do expand, we want to make sure mobile phone companies are taking their cues from this Government, and are delivering for their customers; the Fijian people. So we’ll be charging fines from the new year to any mobile phone companies whose downtime falls below acceptable levels.
$300,000 has been allocated to connect more Fijian schools to the internet. Combined with the telecentre programmes, we’re giving schools and universities easier access to updated materials, and more Fijian students can take in a nationwide learning experience. This budget is also making a big push towards financial inclusion, making electronic transactions easier and more affordable for Fijians and their businesses. For starters, electronic transactions will no longer carry any fees as of 1 January 2019. Because in a digital era no Fijian should have to think twice about the cost of swiping their credit or debit card. Now we can all carry less cash, we can make payments more quickly, and we can all benefit from more efficiency and accountability in our shops and businesses.
We know a POS machine can be a big cost for a small operator, so we’ll also be paying 50 per cent of the cost to purchase POS machines for small businesses in Fiji. We want more Fijian businesses to offer electronic transactions to more Fijians, as that is a foundational part of creating a more financially inclusive society.
CONTINUATION OF MODERNISATION
Madam Speaker, taking Fiji forward and shaping Fiji into the nation we are capable of becoming is a national effort, it involves all of
us, and we need the private sector to be 100 per cent on board in our campaign to modernise the nation and transform our cities, towns and communities into attractive, welcoming and safe spaces.
If you look around Suva, or any of our major population centres today, there are too many old, unkempt and deteriorating buildings. They are unattractive, they aren’t safe, and they really ought to be fixed up properly. So now, buildings that are at least five years old qualify for a new tax incentive package if their owners make the effort to have them redeveloped.
If more than $1 million dollars is spent on refurbishment to the exterior of the building, building owners get a 25 per cent investment allowance. To receive that allowance owners must utilise a green technology, such as solar panelling on the building, they must provide access to the building for Fijians living with disabilities, such as a wheelchair ramp to the doorway, and they need to install lighting on the exterior of the building that helps light up our streets. That incentive is available for the next three years. Interest rates are low, liquidity and confidence are high, and now is the time to make this sort of investment.
Madam Speaker, we’ve allocated $500,000 to make Fijian buildings more inclusive and comfortable for People Living with Disabilities and their families. This initiative, implemented by Habitat for Humanity, is dedicated to retrofitting Fijian homes and community centres to accommodate Fijians living with disabilities. This funding will cover a variety of structural upgrades, including the construction of ramps, railings, disabled-friendly footpaths around the home, accessible washroom and toilet facilities, and the alteration of community centre entrances to be accessible to those with disabilities––a change that will truly open doors to the entire Fijian community. Applications for this programme can be made through the Department of Social Welfare.
The Reserve Bank of Fiji will also generally be relaxing exchange controls; making it much easier for Fijians and Fijian businesses to make overseas payments – and we expect overseas businesses to take notice that doing in business in Fiji is getting easier.
Madam Speaker, in Fiji, we are in the business of forging strategic partnerships with the right development partners. And when it comes to preparing our cities and towns for the future, we are rightfully working with the Singaporeans to assist with our urban planning. They’ll be undertaking assessments in Fiji, looking at where roads should be built, where bus stands should be placed, how our urban areas can be properly planned and spaced out so that ten, twenty and thirty years from now. Fijians can look back and say, thank God the FijiFirst Government planned so well for our future. Last year, we announced we’d be funding a National Gallery of Contemporary Art in Suva, in partnership with the British Council, to
give our artists in Fiji a modern and contemporary creative space where they can show their work, create new pieces and engage among the artistic community. And we’ve set aside another $3 million to begin refurbishments on the St Stephen’s Building, and we expect the gallery to open its doors in 2020. Given our recent ascension to major positions of leadership within the United Nations, and our longstanding commitment to UN Peacekeeping Operations, we’ve also offered to cover the $1.2 million in rental costs for a UN Common Premises in Fiji to house the 16 UN entities and approximately 400 staff based in our country. It’s a sign of our commitment to our partners around the world and to the frameworks that bind us, given the tremendous good Fiji has created by leading the UN on some of the great issues facing the planet, such as oceans preservation and climate change.
MAJOR BUDGETARY ALLOCATIONS
Madam Speaker, those are some of the new announcements from the 2018-2019 National Budget. I won’t go in detail over all the ministry budgets, but that is not a reflection of the importance of those ministries or the hard work their staff put in every day. Those full allocations can be found online, and in the detailed booklets included with copies of the Fiji Sun next week.
But here is a snap shot: Under the Fiji Roads Authority, we’ll be beginning construction on the four laning project from Nadi to Lautoka next year.
We’re bringing better governance, through a higher level of accountability and transparency, to independent institutions, particularly the Water Authority of Fiji, the Fiji Roads Authority and the Maritime Safety Authority of Fiji. Board Members of these bodies need to run a tight shop, every taxpayer’s dollar that is spent needs to be justified and needs to make an impact. And if there is abuse, those responsible will be taken to task. This Government has shown repeatedly we have zero – I repeat, zero – tolerance for corruption. Unfortunately, we have discovered that a number of local contractors have not been able to get rid of this old culture of abuse and rid themselves of corrupt practices. And we won’t work with anyone who has a poor record of integrity, accountability and delivery.
We’re coming down hard on contractors who don’t pay their workers, or the companies they have subcontracted. If it’s found out you’re not paying people you’ve hired to work, if it’s found your actions are non-compliant, then you will be blacklisted by Government. Because Fijian taxpayers deserve better.
We’ll also be applying a new policy towards Government ministries and departments as well. The Ministry of Economy will be carrying out regular checks on the budget spends of various ministries, And if we catch slow implementation against KPIs we will take funds away from slow-moving projects and allocate those funds to ministries who are making more efficient use of their budgets.
That’s because we are a Government that is concerned, above all else, with delivering for the Fijian people. Nowhere was that clearer than when we opened the brand new, world-class Nadi International Terminal earlier this month. We are also nearing completion of the upgrade of the Labasa airport to cater for night landings, granting the ability for same-day return flights from Labasa to Suva. And in Rotuma, we are finally realising the 40-year dream to upgrade the airport to cater for the larger ATR 42s and 72s, increasing the number of passengers who can fly to Rotuma tenfold, thereby reducing fares. Opening up another maritime region of our country to massive new flows of economic exchange, tourism and connecting them – like never before – to the rest of our Fijian family. Both of those projects are scheduled to open at the end of next month.
I encourage Fijians to take advantage of the new Fiji Friendly Fares on Fiji Airways and Fiji Link, which is making travel throughout the country, and throughout the world, much more affordable. And I should mention, we’re also ending partnership with Fiji Airways route to Singapore, as that route is now fully commercially viable. This initiative like others demonstrates the wisdom of Government to ‘hand hold’ projects that in the long term reap enormous financial and commercial benefits for our country and for our fellow Fijians.
We’ve set aside an allocation of $97 million towards the Ministry of Agriculture, and within that funding is an ambitious new effort to build up a Fijian goat industry. We’re going to support local goat farmers, assist with veterinary services, help prepare land, construct fencing and provide water sources, to step-up, in a very big way, the production of goat farms, to the point that they can provide kids to other farmers.
A few good companies can really revolutionise an entire industry, and our goal is to create a selfsustaining goat industry driven by strong local producers. And we’re confident we can establish a brand for goat meat in Fiji that will give our customers more choice in the market, lower prices and support the livelihoods of goat farmers throughout the country.
We’re also destocking dairy farms of cows suffering from tuberculosis and brucellosis, and then we’ll pay for the restocking of those dairy farms, with new healthy cows bred from superior stock. Government has allocated $20.5 million to the Ministry of Fisheries. Within that allocation we’ll be developing new local sources of fish in Fiji. It’s a move towards strengthening our food security, and building up local livelihoods in the process by assisting commercial aquaculture farms to boost their production, and move small
players up to the commercial level.
If you can’t tell from the incredulous statements we’ve been hearing from certain political parties, who have already started their campaigning, Madam Speaker, we will be holding elections sometime this year, and 20 million dollars is allocated to the Fijian Elections Office for the conduct of those elections. And, Madam Speaker, I’m very proud to announce that we’ve set aside a special allocation of $500,000 for our commemoration next year of the 140-year anniversary of the first ship carrying indentured labourers, or girmitiyas, from British India to Fiji. I know that means a great deal to every Fijian family, especially those who can trace their lineage back to the original girmitiyas, who were brought to Fiji and made to work, under slave like and inhumane conditions. That will include nationwide ceremonies of remembrance, and it will cover the first round of funding of $300,000 toward the construction of a museum either in Lautoka or Nadi dedicated to the history, legacy and immense contribution that girmitiyas, and their descendants have made to Fiji.
TAXES AND TARIFFS
Madam Speaker, we’ve already reduced the tax burden on Fijian families to the lowest point in our history. We’ve already raised the income tax threshold from 8840 dollars to 30,000 dollars, freeing low-income families from paying income tax completely. Corporate taxes have also been cut to only 20%, We’ve dropped VAT to 9%, one of the few countries in the world to reduce rather than raise such a tax, and we’ve completely eliminated the dividend tax. Companies listed on SPSE pay only 10%. Regional or Global Offices pay 17.5% That’s meant bigger pay checks and more disposable income for Fijian families. Because when it comes to meeting family expenses, we trust families to spend their own money, rather than have their government spend it for them.
We’re taxing smarter, not harder. That’s how we’ve lowered the tax burden on Fijian families, while actually tripling our tax revenue since 2005, with revenues expected to exceed 3 billion dollars this year. We’re taking that effort even further in this budget by giving FRCS more teeth to go after any seeking to cheat our tax system.
This year, we’re introducing a few changes to our revenue policy, in line with the same vision to make our taxation system more equitable, and build upon our record in using revenue collection as a tool to guide development, open flows of investment, and support Fijian wellbeing.
We are introducing a 1.25 milliondollar turnover threshold for businesses who are currently paying STT and ECAL. This threshold is aligned to the $1.25 million for restaurants.
The threshold for Resident Interest Withholding Tax has risen from $16,000 to $30,000 aligned to the unprecedented rise of the income tax threshold last year.
Excise tax on alcohol and tobacco has risen by 15 per cent. We’re expanding the 13-Year tax holiday for ICT businesses to include customer contact centres, engineering and design, research and development, animation and content creation, distance learning, market research, travel services, finance and accounting services, human resource services, legal procedure, compliance and risk services and other administrative services that are ICT enabled.
Fiscal duty on used vehicles that
are two years and younger has been reduced from 32 per cent to 15 per cent, or half the current specific rate, whichever is greater, to help more Fijian families afford newer, higher quality vehicles. These rates depend on the size of the vehicle’s engine. The concessional duty rates for taxis have also been extended to used vehicles that are younger than two years old. Meaning that fiscal duty is even lower, at 7.5 per cent. Helping get newer cars on our roads, cleaner cars, and safer cars. And we’ve introduced a 55 per cent capital deduction for any purchase of an electric vehicle for the next five years. The minimum capital investment to qualify for the five per cent subsidy we offer for the set-up of electric vehicle charging station has been reduced from $500,000 to $100,000.
We’re providing a 150 per cent tax deduction for any cash contributions above $10,000 to any corporate sponsor towards the hosting of the ADB Annual Meeting.
We’ve also revised the medical incentive regulations to include hospitals under PPP arrangements to be eligible for medical tax incentives.
ECONOMIC OVERVIEW
This year, Fiji’s projected revenue stands at 4.23 billion dollars, with 4.65 billion dollars in expenditure. That means we have brought our national deficit down by a full percentage point from last year to 3.5 per cent –as low as we promised it would be in our budget announcement last year.
What’s really impressive, is that we’ve accomplished that despite being battered by three successive cyclones and torrential flooding, despite quickly and generously helping Fijians get back on their feet after the storms, and despite pouring resources into adapting our nation to climate impacts. We kept the economy on course, meeting and exceeding our national goals through our prudent stewardship of the Fijian economy. Through our economic growth, and by virtue our inclusive approach to governance, we’ve brought together financial institutions, banks, insurance companies, telecommunications companies, we’ve found common ground and we have been the glue that have bonded these institutions in new partnerships for the betterment of nation and our citizens wellbeing. Madam Speaker, despite the recent rounds of cyclones, as I stand here today, as Fiji sits on the cusp of an unprecedented ninth straight year of economic growth, we’ve achieved a growth rate of 3.2 per cent this year. Our unemployment stands at a 20-year low, and our foreign reserves, sitting above 2.2 billion dollars, are marking all-time highs. Investor confidence is booming. All around the world, investors are looking at Fiji as a stable, business-friendly climate ripe with opportunity.
Those are the facts, Madam Speaker. Those are the hard numbers, endorsed by international financial institutions and credit agencies who regularly survey and assess our economy. Some may not like those facts – because they don’t bode well for their own political future. But when ordinary Fijian families take a good long look at the facts, they’ll see that our management of the economy is sound and effective and, again, it’s clear that this budget is a responsible budget for Fiji.
I’ll put our financial strength in more relatable terms, for those sitting at home who aren’t economists, or maybe even some who are, based on the economic illiteracy that we’ve seen from across the aisle. The truth of the matter is that, again, Fiji is running an operating budget surplus, we take in more money than we spend on the day-to-day running of the country. The only dollar that our Government borrows is a dollar invested in the Fijian people.
One of our most telling economic accomplishments is our debt-toGDP ratio, which, has hit a rate of 45.6 per cent last year, the lowest level in 15 years. It means that Government is able to borrow the funding that it needs to invest into the betterment of our people, because lenders are fully confident of our ability to repay, and they see the strength in our economy.
Suggestions that Fiji is experiencing some kind of Chinese or Japanese takeover because of Government’s investment in Fijian families only goes to show that the person speaking—or, more commonly these days, anonymously typing behind a keyboard—is either ignorant, a liar, or both. All too often, the answer is both, as we’ve seen from past Governments’ gross mishandling of the Fijian economy and their attempts to manipulate the facts.
Back in 1996, the government of the day took out a huge amount of debt— debt that was not spent on Fiji’s families or infrastructure, but debt that was squandered to bail out all deposits from the only National Bank of Fiji. The person who was the Prime Minister then is also the Leader of SODELPA. Debt, Madam Speaker, that the economic novices at the helm had no plan to repay.
Today, when you consider the difference in dollar value, interest, and opportunity cost of that debt, the number balloons to five hundred million dollars. Let that sink in: five hundred million dollars of Fijian progress lost down the drain, at no benefit to the Fijian people. With that money now, anything we currently owe to China could be wiped clean. Just think of what that money could have done for Fiji if it had been managed by someone, say, capable of managing a political party-- let alone an entire nation’s economy.
And now many of those same voices are trying to tell lies about our strong economy; an economy they themselves never had the vision, the know-how, the political will or the ambition to deliver for Fiji. And, Madam Speaker, that’s deeply concerning, because, as His Excellency the President has said, the Fijian economy is something we must all protect. Our economy is the basis for the wellbeing of Fijian families, and no one should be telling lies about our economy for their own short-term political gain. Because our economy, the future of our nation, the future of our families and the future of our children, is never fair game.
We must speak the truth—and the truth is the only reason that Fiji has the ability to invest so heavily in the Fijian people, and to invest in building an economy to last, is because the world trusts us to make good on our financial obligations. Governments of the past tanked our economy, they racked up bills they never intended to pay, irresponsibly leaving a tab of inter-generational debt to be settled at the expense of our nation. The very fact that Fiji today has recovered from this, and can invest in our people at all, especially after being burdened down by the debts of those before us, speaks to the strength of our economic management. It speaks to the principled nature of our leadership.
Madam Speaker, the truth is that we’re announcing this budget from a position of considerable financial strength. It would have been easy for us to stand here and play Father Christmas, handing out freebies, announcing gimmicks, giving away money without any care or consideration, because we are in a very strong financial position. We could have done that, Madam Speaker, but we haven’t. We’ve never done that. Because we’re not interested in gimmicks. We don’t make policy based on what’s easy, or on when an election may be. We’re interested in the prosperity of the nation, and of Fijian families over the long-term. We’re interested in making thoughtful investments in our people and in Fijian society, to bring opportunity to our people, to empower people and give them the confidence to pursue initiative and enterprise. We’re interested in building the Fiji of tomorrow – today. Specifically, this evening through this national budget.
Again, this is budget that is grounded in reality, defined by its responsibility and, again, this budget will be remembered for its vision and for the stable foundation it will establish for Fiji’s future success, our children’s success, and their children’s success after them. This is a true family budget through and through, and just like with smart and responsible family finances, we’ve spent money where it matters and we’ve made investments in areas that will see a positive return; in improving standards of living, expanding infrastructure, driving important societal change, raising the quality of life for Fijians, and ensuring a secure and prosperous future of the next generation.
CONCLUSION
Madam Speaker, I’d like to end by thanking all of those Fijians who contributed to the budget during our consultations. Our efforts to respond to the impacts of TC Josie and TC Keni meant that many of those consultations had to be cancelled, but we still received many submissions over mail and online, and we thank those Fijians as well. We have received a number of requests to hold nationwide budget roadshows over the next few weeks to break down the budget and explain its impact on ordinary people and their families, and we hope to see as many people as possible at those sessions, because it’s important everyone get the full picture of how this budget will impact your lives, your families and your communities.
Madam Speaker, we’ve designed this budget for Fijian families, to support them, protect them, empower them, and give them the stability they deserve. And from our youngest Fijians to those in entering school for the first time, to those going on to higher and tertiary education, to their parents and to those in the later stages of their life, this budget delivers for every member of every family in the country. This is a budget for breadwinners; for the business women and men who put in the work to keep rooves over their family’s heads and put food on the table. This is a budget for young and ambitious people, putting new technologies at their disposal, along with new educational opportunities and unpresented new, higher-paying jobs; young Fijians who want high-paying jobs to – one day – support families of their own. Because this is a budget that recognises we are a young nation it recongises the potential of the next generation of Fijians, and it sets them up for incredible success. This is a budget for parents who want to see their children do well, and realise opportunities they only dreamed for themselves. This is a budget for those who care for their own parents, and for their grandparents at home. This is a budget for those who need assistance, not a hand out, but a hand-up. And most importantly, Madam Speaker, this is a budget for our children, and for their future. Because this budget, Madam Speaker, can give us all the certainty that we are building a better Fiji, and a better world, for our children, for our grandchildren, and one day – for their own families many years on from now. Because every Fijian family matters, Madam Speaker, and this Budget delivers prosperity for every Fijian family today, and for all those families yet to come.
And for that reason, Madam Speaker, I recommend this budget. Thank you, Madam Speaker.
...most importantly, Madam Speaker, this is a budget for our children, and for their future. Because this budget, Madam Speaker, can give us all the certainty that we are building a better Fiji Aiyaz Sayed-Khaiyum Attorney-General and Minister for Economy