No ‘magic solution’
Fiji’s debt-to-GDP ratio could reach 100pc in 10 years – Biman
DEPUTY Prime Minister and Finance Minister Professor Biman Prasad says in 10 years’ time Fiji’s debt-to-GDP ratio could reach up to nearly 100 per cent if significant changes are not done to government finances.
He said this would leave Government no room to borrow for the urgent capital expenditure needed now.
When he took over office, Prof Prasad said the advice he received from the World Bank on its public expenditure review was alarming.
In 2015, he said the debt stood at 46 per cent of the GDP and now at 85 per cent — which was still under control.
For this, Prof Prasad appointed a fiscal review committee on Tuesday, which consists of 14 highly qualified professionals to examine government’s overall fiscal policy, make recommendations of how to rebalance government revenue and spending, grow the economy and ensure that Government is fiscally sustainable over the next decade.
He said the previous government had spent more money than it earned on its daily operations.
“We must find ways to better measure and control government spending,” Prof Prasad said.
“We must improve the environment for private sector investment and economic growth.
“In all this we must also ensure that our most vulnerable and poor people are appropriately protected.
“We have some very hard economic choices; it is inevitable there will be increase in taxation.”
He said finding the best mix of options was their challenge and that there was no “magic solution” to Fiji’s economic problem.
He said they would need billions of dollars to invest in health, water, sewerage, roads, housing, and climate adaptation but they would not be able to do it effectively because of Government’s current economic state and without public investment.
The committee’s 14 members are:
• (Chairman) Richard Naidu — commercial and taxation lawyer and a partner of the law firm of Munro Leys.
• (Deputy chairwoman) Lisa Apted — partner of KPMG Fiji, chartered accountant and tax professional.
• Reaaz Ali — company director and entrepreneur from Nadi.
• Vani Catanisiga — executive director of Fiji Council of Social Services.
• Edwin Chand — company director and businessman from Labasa.
• Neelesh Gounder — economist and deputy head of school (Research) at the School of Accounting, Finance and Economics at the University of the South Pacific.
• Matelita Katamotu — business adviser and eco-tourism entrepreneur in Namosi.
•
Fantasha Lockington — chief executive officer of Fiji Hotel and Tourism Association.
Kirti Patel — librarian and community activist from Lautoka.
Pradeep Patel — partner of BDO Fiji, a chartered accountant and tax professional.
Naibuka Saune — chief executive officer of Merchant Finance Ltd.
Viliame Takayawa — company director and member of the SODELPA management board.
Barry Whiteside — company director and former governor of the Reserve Bank of Fiji.
Mereia Volavola — business consultant and former chief executive officer of the Capital Markets Development Authority.