Waqanika: Danger of government guarantee

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MP Tanya Waqanika . Picture: RAMA/FT FILE

The danger of government guarantee that this Government is giving is that they are contingent liabilities.

And with the present economic climate, a lot of business loans and large binding leases will transit into distress status.

Opposition Member of Parliament Tanya Waqanika made the comment while responding to a motion moved by Attorney-General and Minister for Economy, Civil Service and Communications Aiyaz Sayed-Khaiyum in Parliament today.

Mr Sayed-Khaiyum had sought the approval of parliament to amend the parliamentary approval dated May 25, 2020, for the FJ$455 million Government guarantee to Air Pacific Limited that is trading as Fiji Airways.

Ms Waqanika said this would cause wholesale creditors (bond and promissory note holders & and lessors) like FNFF to exercise their charge over the guarantee.

“Honourable Speaker, Government is simply raising bonds with FNPF to raise funds and this only increases Government debt,” she said.

“… Our retirement reserves are being used to prop up dead or life support Government statutories and the biggest threat is Fiji Airways. The Fiji economy is not sitting at the edge of the cliff – we have already fallen over and we are at the bottom of the cliff,” she added.

Ms Waqanika said the infinite period of repayment would have people “paying from the grave”.

“I want to die in peace and also leave my children and my descendants a legacy where they do not have to pay for the financial mismanagement made by this Government.

“Any lender will want a term of repayment. Honourable Speaker Sir, what this Government must remember, we are not in Christmas mode – in fact we are far from it. There has to be a finite term of repayment to this loan and Government guarantee.”

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