Fiji’s escalating debt projected to hit $10 billion by July this year, rampant wastage, pilferage and mismanagement of funds are just the tip of the iceberg when it comes to the mounting economic challenges inherited by the people’s Coalition Government from its FijiFirst predecessors.
And in his ministerial statement in Parliament yesterday, Deputy Prime Minister and Minister of Finance Professor Biman Prasad said much of his time since taking office in December last year was being spent “on troubleshooting and firefighting”.
He said the FijiFirst government’s “people pleasing” economic choices had put the country in a very unfavourable position and hinted at the tough challenges in store for Fijians as his ministry worked frantically to address debt commitments while trying to stimulate and foster economic growth.
“We are now paying the price for poor planning, unsound investment, and lack of maintenance,” the Deputy PM said.
“Human lives depend on health spending so we cannot compromise, but so much of what we are spending our money on seems to be reactive, ‘hand to mouth’ economic management. Better planning would have saved millions. “In the last decade, government finances were managed poorly.
“People-pleasing choices were made like cuts to income tax and VAT without consideration and implementation of measures to mitigate the effect of these reductions,” he said.
“We forget now, but at one time VAT was at 15 per cent and company tax was at 28 per cent. People started paying income tax after $16,000 in annual income, not $30,000 like it is now. This has caused income disparities.
“A basic salary earner above the threshold paid the same tax rates as those raking in huge salaries and corporate profits. And it has not done anything to put more incomes in the pockets of the majority of salary earners.
“But if you want to cut taxation, that means you must also cut spending. And the government did not. The former government and its leaders completely ignored prudent financial management and spending. Borrow and spend was their only solution.”
He also dismissed the label of “free” goods and services provided to members of the public, saying everyone knows that nothing comes free.
“Let us all face some facts. Nothing that government provides us is free. And so, if we are going to give money back to people by cutting taxes, in the end, it is government services which will suffer.”
His statement was described as a “litany of woes” by Opposition MP Jone Usamate.
“The Honourable Minister has realised if you decide to be in the hot seat, that seat is always hot, you never have everything you want and you have to learn to prioritise and do things that need to be done,” Mr Usamate said in response.
