Push for more government salary cuts, ‘economy on life support’
DIALOGUE Fiji executive director Nilesh Lal says the 2020-2021 National Budget is “excellent” and “ingenious” but he also says there should have been more government salary and spending cuts because the economy is on “life support”.
He said given the extremely difficult circumstances, it was commendable that Attorney-General and Economy Minister Aiyaz SayedKhaiyum was able to secure financial resources to “deliver a stimulus budget”.
However, Mr Lal said Dialogue Fiji had noted the lack of support to the primary sector, including agriculture.
“As we had stated earlier, protecting businesses from insolvency remained the most sustainable way to saving jobs and maintaining household incomes and this budget has sought to do that,” said Mr Lal.
“The wide-ranging incentives and concessions provided to businesses will hopefully provide the boost that some struggling businesses desperately needed and continue to keep them operational, or even thrive.”
Mr Lal said the measures could only succeed “if business sentiment and confidence in the economy” was maintained.
“If we undermine confidence in our economy or create doubts about the ability of these measures to stimulate aggregate demand, we can frustrate government efforts in this regard.
“That is why it is critical for all Fijians to be positive and optimistic given the fragile economic environment.”
Mr Lal said when expansionary budgets were formulated, “reducing wasteful expenditures and inefficiencies should always be an objective”.
“We note that there have been some significant reductions in operational expenditures, however, we felt that pay cuts and salary caps for those paid from the public coffers should have been implemented.
“It does not do any good for an economy on life support, which the Government hopes to revive through consumption spending, for some individuals to be hoarding money.
“This is happening in the case of those on super salaries.
“When we are taking a gamble with such a bold budget, we need to utilise every measure, whatever the degree of its impact may be, to achieve the intended outcomes”.