SODELPA ‘2018-19 Budget Irresponsible, Lacks Vision’

■ Sitiveni Rabuka is leader of the Social Democratic Liberal Party. He was Prime Minister in the SVT government from 1992 to 1997. The views and opinions expressed in this article are those of Sitiveni Rabuka and not of the Fiji Sun. This is the first of a four-part series commentary on the 2018-2019 National Budget by Sitiveni Rabuka.

To fully appreciate the impact of the 2018/19 National Budget, it is imperative that budget trends in the past few years must be analysed. An appreciation of the international and domestic trading environment must also be taken into account. The most important consideration is to determine whether the national budget addresses the need of ordinary Fijian families. Basically the Government, like an ordinary family, must live within its means.

We cannot spend more than what we earn. When you continue to spend more than you earn it means that you continue to borrow and your debt will continue to increase. You will reach a stage where you can no longer service your debt. As the result you have to start selling assets to service your debt otherwise you will be bankrupt.

The Bainimarama Government has continued to take an expansionary approach in the past 12 years. As a result our national debt has increased from $2.8billion in 2006 to around $5.2b in the 2018/19 Budget.

Our debt has more than doubled in the past 12 years. The bottom line is that we have to pay or service our debt, whether it is foreign or domestic. We must also be mindful of our vulnerable position as a narrow based economy depending on very few primary commodities, international trading environment particularly the increase in the price of petroleum product, which is around one-third of our imports. Most importantly we are vulnerable to natural disasters, which have become regular with high intensity. Against this backdrop, I would like to make the following observation. The Bainimarama Government has been in power for the past 12 years. In reviewing the budget for the past 12 years, the Prime Minister and his Attorney-General and Minister for Economy continue to be optimistic and mislead the people of Fiji by painting a rosy picture, particularly when budgets are announced. They are always boastful and self-praising of their achievements compared with other successive governments. In addition, they continue to boast that the FijiFirst Government is the only and the first government to ever implement new policy initiatives, which in most cases, are not true at all. The 2018/19 Budget is no different from other budget presentations. It continues to build a rosy picture of the future in improving the lives of Fijian families. No effort has been made in consolidating government finance to provide “fiscal space” due to our vulnerability.

The 2018/2019 National Budget has been eloquently presented by the A-G and Minister for Economy and creates a rosy picture of “empowering all Fijian families and laying out new and better economic opportunities.” It gives a lot of false hope to ordinary Fijians.

The practicality and the effective implementation of programmes is questionable, and its long-term impacts will not be sustainable. More so, the under-utilisation of funds allocated, which will be elaborated further when we look at the RIE (requisition to incur expenditure) and Head 50. As usual most of the policies are not well thought out and adjustments have to be made on a regular basis because it does not produce results as anticipated [ECAL (Environment and Climate Adaption Levy) and STT (Service Turnover Tax)].

The revision is a clear indication that policies are not well thought out. The 2018/2018 Budget is a ‘fairy tale’, ‘sugary’ and ‘irresponsible’ budget. It focuses on consumption and totally undermines all our productive sectors, which are key to economic growth and to provide the employment that our people desperately need.

It is unfortunate that the Minister for Economy continues to boast that they continue to have operating surplus. This claim is not true; all successive governments always have operating surplus. The only difference is that the operating surplus in the past 12 years is far less than the surplus generated by previous governments. The substantial increase of debt is a clear indication of the decline in operating surplus in the past 12 years. Although total revenue has increased from $1.9b in 2012 to an estimate of $4.2b in 2018/19, the trend will change as we progress because of the variation between operating revenue and investment revenue.

In 2013, there was a shortfall of $100m, and in 2014 the shortfall was $300m, and in 2016/17, the shortfall was $280m. These shortfalls were due to the non-sale of government assets. It is unfortunate that this Government continues to sell State strategic assets. In the long run, this is not sustainable because once we have sold all the assets, there will be nothing else to sell. It means that if we continue this expenditure trend, we will have to borrow more and more as we progress.

The long-term result is that investment revenue will continue to decline and we have to rely and increase our operating revenue through taxes, fees and charges which will reduce the income of ordinary workers. This will add more burden to ordinary families and most likely increase our debt substantially which is already high, that is, more than 50 per cent of Gross Domestic Product (GDP).

The 2018-19 Budget is a ‘fairy tale’, ‘sugary’ and ‘irresponsible’ budget.