Labour Leader Mahendra Chaudhry told the Party’s Annual Delegates Conference in Lautoka today that the government’s financial situation was so critical, it was not in a position to pay its creditors.
“As a consequence of which businesses and individuals are owed hundreds of millions of dollars in VAT and Income Tax refunds, and in payments for goods and services provided to government. “The general perception among people is that “the country is in a deep mess” and I agree,” he said.
Mr Chaudhry said the nation’s deepening financial and economic crisis was the result of irresponsible borrowing and reckless spending by the Bainimarama administration in the past 12 years coming home to roost.
Full test of Mr Chaudhry’s address:
I have a strong and unequivocal message for you today: We need to get out of our state of inertia; shed our comfort zones and take a critical look at where our nation is headed. And do something about it before it is too late. There are many out there who are quite concerned about the state of our nation.
Let me begin with the economy. The situation is critical. Even the Reserve Bank has now admitted a serious contraction in the national economy – it has reviewed projections for growth this year to a modest 1pc down from the earlier forecast of 3.2% – but even this may be somewhat too optimistic.
I met a much respected former diplomat and Permanent Secretary earlier this week and his first words to me were: “The country is in a deep mess.” His comment confirmed the view I have held for sometime now.
It made me realize that our nation needs the Labour Party today as never before. Look at our record in the brief year we were in government 1999-2000 – unprecedented growth rate of 9.6% in one short year. Good governance – a clean, open, honest, compassionate and accountable administration – were the hallmarks of our short term in office.
Compare that to 12 years of the Bainimarama-Khaiyum administration. Artificially induced and unsustainable growth fuelled by consumption and reckless public spending financed through huge, irresponsible borrowings. Our debt levels rose to a high of 46.2% of the GDP in 2018.
It doesn’t make economic sense to spend beyond your means. But this is what has happened to our country – our national debt has risen exponentially over the past 10 years – from $1.5b to the current $6b.
The Bainimarama government was borrowing indiscriminately for what I describe as prestigious projects, almost all of which ended up in huge cost over-runs:
- the Nadi-Airport-Denarau strip built at $165m against the original budget of $70m
- the $200m Nabouwalu Highway which should have been completed for less than $100m
- the 4km Nakasi to Nausori Bridge strip which took almost 5 years to complete at a cost which is a closely guarded secret
- the $130m refurbishment of the Nadi International Airport completed at a cost over-run of close to $40m
- The massive $320m reportedly spent on the reconstruction of schools damaged by Cyclone Winston at an average cost per square meter which exceeded the construction cost of a 5-star hotel.
All these projects are believed to have been fraught with impropriety. Indeed, in some circles, the Fiji First government is seen as the most corrupt in Fiji’s history.
The IMF caught up with this (rather late, I must say) in its 2018 Article 4 review of the Fiji economy. It cautioned the government on its high debt levels and wasteful expenditure. As a consequence, the 2019/2020 Budget was slashed by almost a billion dollars.
The Bainimarama administration focused economic growth on consumption and public spending and neglected the primary sectors of our economy. Fiji’s key exports – sugar, gold, timber, fisheries, garments all suffered serious setbacks over the past 11 years – most of them declining 50-60% compared to pre-2006 levels.
High consumption meant high imports of luxury goods so while imports shot up, exports declined drastically increasing the current account deficit and driving our debt repayment costs to unsustainable levels.
Any artificially induced growth – the so-called “Bainimarama boom” – is bound to burst sooner or later – and it finally has. In recent months, we have seen new taxes levied or an increase in existing taxes, exorbitant hikes in fees and charges for government services, drastic cuts in the Education, Health, Social Welfare and Infrastructure Budgets – all this to enable the government to meet its debt repayment obligations.
But what we haven’t seen is a cut in the salaries, perks and travel allowances of government ministers in line with the austerity measures now being imposed on us ordinary citizens.
There is no doubt that the FIJI FIRST government has failed. They have failed in every aspect of our national life.
They have systematically dismantled our democratic institutions and transformed our country from a once-vibrant democracy to a military-backed oligarchy. The principles of good governance and accountability have been replaced with authoritarian rule. They have undermined the institution of Parliament by curtailing the rights of the Opposition.
They have imposed on the people a constitution which has been condemned by members of the UN Human Rights Council demanding that it be reviewed comprehensively to reflect the needs and aspirations of the people of Fiji.
They have created an unjust society, widening the incomes disparity and the gap between the haves and the have nots. Workers and their unions have been particularly targeted, much of their rights taken away. Wage restraints are a deliberate policy with the National Minimum Wage kept abysmally low at $2.68 an hour despite escalating cost of living.
BUT, they have unabashedly awarded themselves huge pay increases through Parliament, not to mention all the perks and hefty travel allowances they enjoy.
They have brought untold misery to the lives of retired workers, both present and future, by slashing pension annuity rates from 15% to 8%. As a result, more than 75% of the Fund’s members will now retire with less than $10,000 in their accounts with $70 a month or less in pension. It goes to create an impoverished society considering that more than 60% of our workers earn below poverty line wages.
Simultaneously, they have made the FNPF a cash cow for the government. Instead of improving member benefits, it now facilitates government borrowings, funds cash-strapped institutions like the Fiji Sugar Corporation, lends to Fiji Airways to buy new aircraft. It is even used by the government to give cash to victims of natural disasters – a responsibility which should be shouldered by the State, not the Pension Fund.
They are now diverting attention to a new phenomenon – Climate Change – which is being promoted to the exclusion of more pressing issues facing the nation. We see this as a deliberate policy to shift attention away from our social and economic ills and the failures of this government.
Ironically, our “ FF-frequent flyer” Prime Minister travels the globe singing refrains on Climate Change, but at home he and his government turn a blind eye to investors who devastate our own environment. He makes wild promises about planting 30 million trees in Fiji while his Ministers allow questionable developments that are cutting down our trees, removing our forests and destroying our reefs.
The FF government has failed to:
- Alleviate poverty.
- Arrest joblessness with 25% of our youth now reported to be unemployed
- Reduce the high cost of living
- Provide adequate, affordable housing for low income workers
- Reduce the high crime rate
In fact, many of these social ills have been aggravated by deliberate policies of the Fiji First government. Take poverty for instance – the increase in poverty over the last 12 years is a direct result of the Bainimarama government’s policies as reflected in wage restraints, increasing unemployment, high costs of living, rural decline and neglect of the productive sectors of our economy in agriculture and other primary production.
Let me deal with 3 key areas where the FF government has dismally failed to meet the aspirations of the people despite lofty promises and rhetoric:
We have experienced a marked deterioration in the health of our people in the 12 years of Bainimarama rule. Hospitals and health centres are ill equipped, lacking doctors, nurses, para medics and life saving equipment; drug shortage is a chronic problem as is the lack of hospital beds, and even basic items such as bandages, syringes etc.
The recently built multi-million dollar Ba Hospital remains a white elephant as it appears to have been moth-balled after construction.
Its free medicine scheme turned out to be a major failure as the listed drugs were forever in short supply. The much-promised government pays-GP-system has still not eventuated. Must have been another vote-buying gimmick.
The deteriorating health of our people is a major cause of anxiety. The 2017 Census confirmed claims that Labour has been making for some years of a high adult mortality rate due to a very high incidence of NCDs – our mortality rate for the 35-55 age group is three times higher than that of Australia and New Zealand.
The 2017 Census revealed shocking statistics – only 3.5% of our people get to live beyond their 65th birthday. Compare this with an average life span of 72 we enjoyed in the 70s and 80s. Fiji has the third highest incidence of diabetes in the world on a per capita basis. One third of our population are now registered as diabetics.
Abuse of hard drugs is becoming another major health issue. Almost daily we hear the shocking truth of how this evil has penetrated our schools. We say the FF government shares major responsibility for this. It has opened up our country to undesirable elements from countries that are notorious for drug trafficking.
Why does Fiji have such a high rate of NCDs or life style diseases today? A lot of it has to do with increasing levels of poverty and deteriorating standards of living; it is also due to an alarming shift away in recent years from focus on preventive health care to prescriptive health care.
The Bainimarama administration has made a mess of our education system. High failure rates among students, frustration among teachers, principals and school managers as a result of constant government interference, have all had a deleterious effect on our education system.
Well tried and proven systems used in the past were arbitrarily removed, giving rise to a disgruntled and frustrated teaching fraternity: job security was replaced by short-term individual contracts, teachers pays were interfered with, religious and community run schools were told they could no longer appoint their own principals.
The scrapping of scholarships based on affirmative action and its replacement by the TOPPERS Scheme aroused widespread resentment in the indigenous community which felt their children were missing out. It has widened racial distrust and animosities.
The student loans scheme TELS has replaced hundreds of scholarships that were given out by previous governments. Under this scheme, most of our students will begin life after graduation, heavily indebted and bonded to the government for years afterwards.
And now the per capita grant to schools which facilitated fee-free tuition, built up over years by past governments, have been reduced creating much anxiety among poor students and their parents.
One of the most glaring failures of the Bainimarama administration is the extent of rural decline in the past 12 years. Rural poverty in many areas is placed at between 50-55%, particularly around Labasa. This has led to accelerated rates of rural-urban migration causing the mushrooming of squatter settlements in our towns and cities with all their associated social ills and the pressure it puts on amenities provided by municipal authorities. Not to mention the increased threat to the spread of epidemic diseases such as measles, dengue, typhoid etc.
The sharp decline in the sugar industry and overall agricultural production is a major cause of poverty in the rural sector. There is a lot that government could have done to encourage diversification and provide for alternative means of livelihood for those leaving cane cultivation; or even encouraging others to take up agricultural activity, but it has failed to do so. Investment in agriculture has been minimal under this government.
It should be remembered that only through a vibrant, healthy economy can a government deliver on its social promises to the people.
Need for a Paradigm Shift
I have briefly highlighted the challenges facing us today. But what is the way forward? We cannot go on treading the same path. Nor can we allow our nation to become a totalitarian state, ruled by a self-serving oligarchy.
So what is the way forward?
I believe we need a paradigm shift in the way our nation is governed. This requires a change in government.
We need a government that holds itself accountable to the people.
A government that is caring, compassionate and competent.
A government that adheres to the principles of good governance
We need a government that upholds and promotes democratic values and principles respecting the fundamental rights and freedoms of our people.
We need a government that respects the rule of law and upholds the doctrine of separation of powers between the legislature, the executive and the judiciary
I believe, with all modesty, that the Labour Party has the prerequisite to provide such a government. Our record in just one year in government speaks for itself. Unfortunately, for this country, we were not given the opportunity to serve our full term in office so that we could effectively carry out our vision for the people of Fiji.
We were removed from office by a small group with vested interests, bent on grabbing power and serving their own selfish agenda at the expense of the nation.
The task ahead will not be easy. It will be fraught with many challenges but I believe Labour has the determination, competence and courage to tackle the difficult job.
It will require strong leadership and dedicated Party supporters and activists who believe in the values and principles of the Party and have the zeal and commitment to motivate the people to support our cause.
This time around we will have to be vigilant against the forces of destabilization and vested interest groups opposed to a clean and open style of governance.
For us as a nation and a political party, this is a wake up call.
Our first task must be to build up the Party and restore it to its former strength as we prepare for 2022. Let’s move ahead with enthusiasm and determination.
Let’s make Labour GREAT again: A force to be reckoned with – as in the past.