Looking through the 2015 Budget hype

  • 22nd November 2014
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A notable feature of Budget 2015 is that it gives with one hand and takes away with the other.
Road works to get $654million?

Road works to get $654million?

Fiji Labour Party has maintained all along that nothing is for free.  The regime may be offering free prescribed medicines, water, and milk to Class one kids but more devastating is the general increase in duty from zero to 32% for a range of imported goods.

While a few luxury items such as cosmetics and perfumes have been mentioned, there is as yet no indication of  the full range of items hit by the duty hike to 32% .

This is because details are still not available – copies of neither the 2015 Budget address, nor the Estimates and Supplementaries were available to either the Public or the MPs yesterday – as they have not been printed. The Budget Address is not even available on the government website. This is how badly organized the Finance Ministry is.

On inquiries with the Finance Ministry, we were told that the documents will not be available until sometime next week as they have not been printed. The Budget  has not been approved by Cabinet, we were told,  and some amendments had to be made.

Interesting: 1. Budget is handed down without Cabinet approval. 2. It is still being amended even after presentation in Parliament!

Wow- what a performance Khaiyum  – says a lot for your level of competence as a Minister! Even basic budgetary details such as data for total revenue, expenditure and deficit  have not been given  making it very difficult to make any correct analysis of  Budget 2015.

But given the information at hand, this is how FLP sees the Budget  and its impact on the people:

1.  Merchants in the city  fear the duty increase from 0-32% on cameras and watches will have a serious impact on tourism industry as these are key shopping items for tourists. Otherwise, the impact will largely be on the poor. The rich buy their stuff overseas, the poor locally.

2. One must realise that apart from the 30% hike in Customs Duty, all these items are also subject to a 15% Import VAT.   This means actual hike in price of 47% and not just 32%.     

3. The Service Turnover Tax on hired transport – will likely affect hire of taxis as well, making taxis more expensive for the travelling public

4. Free prescribed medicine- there are no details on how this will work. We fear the same confusion and mess that accompanied the free bus fare saga. Also, how will VAT refunds be made for people who buy from private pharmacies?

5. Huge allocations for roads, health and education – must be taken with a lot of skepticism. The regime’s record to date shows that such huge budget allocations are designed to impress the people. They do not materialize. For example:

  • $400 million were allocated  for road works in the 2014 Budget – actual spending was only $300m. The allocation for 2015 is $654m. Who knows how much will come through?     
  • $550 m has been allocated for Education for 2015. Yet, regime’s record shows that  the actual allocation for Education past 7 years was drastically slashed– cut from $312m  in 2007  to $239m and remained low until the election year (2014) when it suddenly went up to $370m.  But what was actual expenditure?
  • An analysis of the regime’s budget 2009-2013 shows that the actual amount spent on capital works was much lower than the budgetary allocation

6. The regime’s Budgets have become the medium for thanking its big financiers and supporters. To highlight a few glaring egs: the 32% increased duty on imported exercise books. Who benefits from this? Who will benefit from the increase in duty on DVDs from $2 to $5? Close friends of Khaiyum? Who will benefit from the supply of free milk to Class One students?   

More to come later as full range of details come through.