Opposition’s reply to Budget 2006
[posted 15 November 2005,1200]
I rise to deliver the Opposition’s response to Budget
2006. But before that, let me, in line with long standing parliamentary
convention, congratulate the Minister of Finance for his Budget
presentation.
I wish to congratulate our National Rugby 15s team for
their splendid performance against Wales in the week-end. We were most
unlucky to lose by a single point in the dying moments of the game at the
test.
While we may have lost the game, our boys certainly won
the hearts of the Welsh people, as they hung on to victory for all but the
last five minutes of the match.
I wish them well in the remaining games and may they
accomplish what they have set out to do.
I will now revert to the Budget. We are all conscious of
the fact that the SDL government’s Budget 2006 was delivered under the
shadow of the impending general elections and the desire to woo back an
electorate it had sadly neglected for the past five years.
The Budget was also delivered against the backdrop of a
steadily worsening economic crisis, increasing social problems and
deteriorating standards of living of a vast majority of our people.
It is a Budget adroit in the art of deception, no doubt
designed with the single objective of hoodwinking the electorate into voting
the SDL back into office for another five year term. That would be an
unmitigated disaster, Sir, as I intend to demonstrate in the course of my
response.
But first, allow me to give an example of the sort of
deception I am referring to.
Take the tax exemption scheme for the agricultural sector.
The so-called 8-year tax holiday promises much but on closer analysis
fizzles out to nothing.
Under this scheme, exemption from income tax for an eight
year period is to be given to cane farmers and others engaged in coconut,
rice, ginger, livestock and other forms of farming, with a cap at an annual
turnover of up to $200,000.
But how many of these farmers will in reality benefit from
this concession? Take for instance, cane farmers. Of a total of 20,000 odd
cane growers, the large majority, 16,734 are small time farmers producing
less than 300 tonnes of cane.
They already fall within the ambit of the tax threshold of
$8,850! This applies to most people in agriculture – their net income being
less than $8000 a year. So, for them the tax exemption is academic. It
becomes pointless because these farmers should not be paying tax anyway.
That is why the Opposition had called for subsidies on
fuel and farm inputs as an incentive to boost agricultural activity. Giving
tax breaks that don’t apply is worthless. The incentive or assistance that
they really need is not being given!
Let me next look at government’s economic performance and
the promise of an upturn in the growth projections tabled in Budget 2006.
Economic Projections
The Hon Minister of Finance has projected economic growth
for this year at 1.7%, revised upwards from an earlier estimate of 1.5%
which itself was a revision of government’s earlier announcement that the
economy would grow by 4.2%. For 2006, he projects growth at an optimistic 2%
compared to an earlier estimate of below 1%, in fact 0.7%.
Now Mr. Speaker, I find this quite startling. It will be
recalled that government was enthusiastically proclaiming at every available
forum that growth for 2005 was projected at about 4-5% until it was sharply
brought down to earth by independent reports, by international as well as
local banks, that revealed that the Fijian economy was not doing well at all
and was headed for a major slump.
Thereafter, it was forced to admit that the economy was
indeed not doing well and growth projections would have to be revised
downwards to more realistic levels… which is when the 0.7 % figure for 2006
was released.
Now, once again, we are being fed this highly optimistic,
rosy picture of an economy on the rebound. This, when a recent ADB country
report warned of a serious economic slump from 2005-2007.
Naturally, one would ask what is the true state of our
economy? There is a growing point of view that the nation is being
deliberately hoodwinked by statistics that have been doctored to give a
positive picture. That view, Sir, is not without merit in light of our past
experiences.
For instance, it is fair to ask the Hon Finance Minister
on what assumption is he basing his projections for 2005 and 2006, when no
reliable statistics are available.
Neither the Reserve Bank nor the Bureau of Statistics seem
to have confirmed economic data beyond 2002. If you look at the Reserve
Bank’s latest reports, you will find that provisional figures are still
being published for 2003 and 2004. We have reached the end of 2005, yet
confirmed figures are not available for the two previous years.
We have a statistical Bureau which is 3 years behind in
its work! Is this not a waste of taxpayers’ money? Or is it that confirmed
figures are being deliberately withheld under political directive to save
embarrassment to government.
What credibility can then be placed on any of the
projections given in Budget 2006? It would be wise to dismiss them as being
plainly unreliable.
The economy
It is now an accepted fact that the economy is in the
throes of a serious depression. The fundamental weaknesses within the
structural framework of the economy are well acknowledged. They are:
• rapidly declining exports
• lack of investment and, in some cases, actual divestment of certain
government entities and infrastructure projects
• high cost of public utilities
• high unemployment
• widening Budget deficit
• high levels of public debt
• rising inflation
• balance of payments at a critical level
• continuing depreciation of the Fiji dollar
These problems are now compounded by high fuel prices. A
weak economy will not be able to sustain the shocks from the recent spike in
fuel prices, which will lead to inflationary pressures and will directly
contribute to increased levels of poverty and associated socio-economic
ills.
Government must come up with a contingency plan to counter
the devastating effects of rising fuel prices. While it has accommodated the
bus industry in some form, it has done nothing to assist other industries
and livelihoods for whom the problem is just as critical.
Fiscal Policy
Over the past five years, public debt levels have more
than doubled to $2.5 billion, standing at 52% of the GDP … clear evidence of
this government’s inability to control expenditure.
The Hon. Minister of Finance tries to defend our
escalating debt situation with the following comment:
He says and I quote:-
“Mr. Speaker Sir, the build up in debt levels in the
last five years has enabled us to improve living standards of our
communities with provisions of clean water, electricity and roads. We have
also increased allowances to the key sectors like health, education and
infrastructure. Let me assure everyone that our expenditure programmes since
2001 have led to improvements in the livelihoods of our communities.”
This would be laughable, Sir, if the situation were not so
critical. The Hon Minister is valiantly attempting to defend the
indefensible! High debt levels have certainly not improved the quality of
life of our people.
The money borrowed was not directed towards investment in
infrastructure, health, social welfare and education. But rather on
consumption – and indeed, a great deal of that was swallowed up by scams,
kickbacks, financial mismanagement, abuse and of course, vote buying
rackets.
And one can be forgiven for thinking that much of the
smaller allocations made in the agricultural sector, under the guise of
reviving agricultural activity, may simply turn out to be some kind of slush
fund for similar political projects.
Indeed, the borrowed money has gone into supporting high
levels of consumption and to meet debt repayments… this is unsound fiscal
policy!
It saw a steady deterioration in our infrastructure such
as roads, water supply, hospitals, an explosion of squatter settlements and
high education costs for our school children.
According to Professor Sukh Dev Shah, a former economist
with the IMF and now a USP academic;
“Macroeconomic effects of the high level of government
deficit would siphon away savings from useful investments and encourage
consumption and whilst such an approach contributed to economic growth in
the short run it would add very little to the economy’s long term potential”.
Budget Deficit
The ever-widening Budget deficit is equally a cause for
national concern. In the past five years government has tended to over-run
the Budget displaying a lack of financial discipline. The acceptable ratio
of Budget deficit to GDP is generally put at 3% but the SDL Budget has by
far exceeded this ratio.
Let me cite some figures to show how the situation has
deteriorated over the years:
YEAR
DEFICIT
% of GDP
2001
$246 million
6.5%
2002
$222 million*
5.6%
2003
$253 million
5.9%
2004
$146.4 million
3.2%
2005
$203.5 million
4.3% (proj)
* asset sale 2002 - $64 million in
ATH shares reduced deficit
Additional concerns in this area need to be highlighted.
One is that government has shown a tendency to make allocations for capital
works which are not carried out.
Often this money is channelled into some other use not
approved by Parliament. This is a very serious matter, tantamount to illegal
use of funds. In the Colonial days money approved for Capital Budget was
sacrosanct … it could not be diverted to operating expenditure. I believe we
need to get back to similar financial discipline and control!
But what is more alarming is the fact that this government
has been unable, in the past five years, to streamline its cash management.
This is evidenced by the fact that ever since it first took office in 2001,
it has continued to borrow far in excess of what it really needed to finance
Budget deficits.
This is now a chronic problem but those responsible for
cash management in the Finance Ministry do not seem to be bothered by it. We
experienced this during our short tenure in 1999/2000 and took steps to
improve the situation but did not have enough time.
Under the SDL government, this problem has assumed
alarming proportions. Let me illustrate this with figures for the past three
years:
2002
2003
2004
Borrowings
$522m
$597m
$585m
Deficit
$334m
$380m
$303m
Excess Borrowing $187m
$216m
$283m
Now, all borrowings attract interest charges which are paid from the
consolidated fund. The interest charges paid on the borrowings in excess
were no small sums and, calculated at a conservative rate of 2% on Treasury
Bill borrowings would have amounted to $3.7m for 2002, $4.3m for 2003 and
$5.6m for 2004 - giving us a total of $13.7m for the three years.
This is a huge sum by any standards and I wonder whether
anyone has been surcharged for this monumental lapse - $13.7 million would
have been sufficient to resettle at least 1000 families from the slums of
our squatter settlements.
Another feature of this government’s fiscal indiscipline
is that it continues to finance a greater proportion of the operating
expenditure from loans. This has risen from 22% in 2001 to an unbelievable
55% in 2004,the highest in the past 10 years!
Yet another example of gross financial indiscipline is the
fact that despite a substantial increase of $139 million in borrowings in
2004, compared to 2003, expenditure on capital projects declined by $39
million.
So, as I was saying: This government has been borrowing
heavily not to finance capital projects or create assets to boost the
economy but to fuel consumption.
This is fiscal and financial mismanagement and abuse of
the highest order.
Job losses
This may be an opportune time to raise the question of job
creation. Perhaps, the Hon Minister would like to tell the nation why, when
the economy is as vibrant as he claims it to be, and investment at an all
time high, is there a decline in jobs.
The Reserve Bank’s economic review for October, the most
recent report, Sir, discloses trends that show marked job losses. FIRCA
registrations to September this year show a massive 18 % decline in the
registration of new taxpayers. This downturn in employment is also mirrored
in FNPF records which show that compulsory membership fell by 4 %.
The same report does speculate on an increase in
employment in the near future … but as usual, this seems a bit skeptical
considering the current downturn in the economy which is expected to
continue into 2007.
We know that since January this year thousands of jobs in
the garment sector have been lost with the withdrawal of the US quota.
Altogether, we have seen 9000 jobs disappear in the garment sector since
2000. I will be speaking on this a little later.
Exports
I now come to the most worrying feature of our economy -
exports. The decline in the export sector underpins the crisis in the
economy.
In the past four years, I have consistently drawn
attention to the fact that our key exports, particularly garments, sugar,
fisheries, gold were on the decline, with serious repercussions for the
economy. The nation was importing much more than it was exporting and
consuming even more than it was producing. This was a dangerous trend.
Unfortunately, government took no heed of this. It simply ignored the need
to step in and take timely remedial action.
It is now gratifying to note that the serious decline in
exports is being noted. But what does government intend to do to arrest the
situation?
Let’s take the crisis in the garment industry which still
is the largest provider of jobs in the private sector.
The garment industry
I did speak at length on problems in the garment industry
in August, so I intend to be brief this time around.
Our garment trade is reeling from the impact of two main
problems:
• withdrawal of the US import quota from January this year
and secondly,
• the highly restrictive Rules of Origin provision in
SPARTECA which is seriously undermining our ability to compete on the
international market.
The SDL Government knew beforehand that the US was going
to lift import quotas from January 2005, yet did nothing to save the
thousands of jobs that were threatened.
Had they mounted an effective lobby to counter this, we
would not be facing this crisis today. The real tragedy here is that those
made redundant are mostly women from the already vulnerable sectors of
society – their loss of employment would have had a devastating impact on
their families, compounding their hardship and ability to survive.
Garment exports were at their peak in 1999/2000 with
earnings of $333 million. In 2003, this figure fell to $243 million and is
still falling. In 2004, exports were down to $226 million.
This year they are projected to decline even further to a
mere $142 million. For 2006, earnings from garment exports are estimated at
a low of $119 million. These figures are government’s own statistics given
in the supplement to Budget 2006.
This is the tragic story of the decline of our garment
industry. From a peak of $333 million in 1999/2000, it has fallen to less
than half this at $142 million.
Job losses have been equally drastic, down to half its
previous numbers. From a high of 18,000 in 1999, the industry now employs
less than 9000, according to industry sourced figures.
Given the fact that the garment trade is labour-intensive
and has the potential to provide employment for the largely unskilled
sectors of society, I am surprised that government has not been more
aggressive in its approach to save this industry from virtual extinction.
If nothing concrete is done now to reverse the prevailing
situation, we will have to brace ourselves for much bigger job losses as
more factories close down or relocate overseas.
With the US quota gone, our manufacturers are now more
reliant on Australia as a major market source. As we all know exports to
Australia are governed by the rules of SPARTECA.
Unfortunately, this regional agreement which had provided
the early impetus for the phenomenal growth of our garment industry, is now
proving to be something of a stranglehold.
The main problem here is the local content requirement
under the Rules of Origin or the ROO clause of SPARTECA. This is a major
deterrent to cutting down costs and increasing efficiency for our local
manufacturers, as any attempts to cut down on local costs would entail
failure to meet the ROO requirements.
Local manufacturers want the rules of origin requirements
reduced to 25% from the current level of 50%. To meet the 50% local content
requirement, our manufacturers are forced to source their fabrics from
Australia. But Australia offers very basic and a limited choice of fabrics
and accessories, thus limiting our potential to service niche markets there.
Local manufacturers are confident that if the rules of
origin requirements were reduced to 25% and with the inclusion of wool and
wool blends, they would be able to compete quite effectively on the
Australian market.
ROO restrictions may be in breach of WTO rules. Rules of
Origin are an anachronism in terms of global trade liberalisation moves
because it is a barrier to trade. Yet, this government has not been able to
negotiate the required changes on this issue with the Australians.
Our manufacturers have been seeking a fair resolution of
this grievance for years now. The reduction in Australian tariffs on TCF
imports from 50% in the 1980s to 17.5% has placed our manufacturers under
severe disadvantage because of the high rules of origin requirements.
Additionally, Australia’s free trade agreements with China
and ASEAN nations is posing a major threat to Fiji’s garment exports to that
country.
I believe Australia can do a lot more to assist us
overcome these disadvantages. After all it had a huge trade surplus with
Fiji of $400 million last year. It is our major trading partner. In 2004,
Australian exports to Fiji were valued at $750 million. This is no mean
figure.
Our exports to Australia stood at $353 million – giving
Australia a trade surplus of $397 million. High trade imbalances, year in
year out, has been the norm for as long as one can remember.
Australia has a responsibility and duty to reduce this
imbalance. Our policy has always been that we want more trade rather than
aid. But these are matters seldom talked about emphatically in the Forum
Island meetings.
Meanwhile, we welcome the recent announcement by the
Australian Government to set up a regional technical and vocational college
that would provide vocational skills to students in the Pacific Island
states.
After all, Australia is the main beneficiary of the brain
drain from the Pacific Island nations. To date Fiji has lost 62% of its
graduates to Australia and New Zealand while the exodus from Tonga and Samoa
has been as high as 89%, according to a recent World Bank report.
Sugar Industry Reforms
The sugar industry, Sir, faces a similar plight. It is
threatened by external factors that have a direct bearing to trade
liberalization and the WTO Rules.
Having said that, I must concede that our sugar industry
is equally threatened by internal factors: namely, government policy on land
and the politicisation of this highly sensitive issue.
However, I intend to speak on the land issue at length a
little later. Let me deal with sugar first. I refer to the Sugar industry
reforms.
I have considerable reservations about the soundness of
the whole enterprise. I believe the reform process is being unduly rushed.
It is being accelerated on the back of assumptions that may not be fully
realised on the ground and I have good reasons to say so.
The reforms are being pushed through against a scenario of
mounting uncertainty in the cane belt and declining cane production,
resulting from the indiscriminate non renewal of leases and the political
instability created by the events of 2000.
It is no exaggeration to say that a serious question mark
hangs over the entire future of cane farming. Farmers are already moving
away from cane farms in search of other forms of livelihood. Apart from the
setbacks already mentioned, there is the very real threat of cane prices
dropping substantially once the European Union subsidies are phased out.
While the FSC and the Sugar Technology Mission admit cane
prices will drop to $43 a tonne from the current high of $55-$60, there are
others who believe the drop will be even bigger with the actual price
falling to as low as $35 a tonne.
Once the subsidy is fully withdrawn, there is no doubt
that the exodus from the cane belt will be even more marked as cane farming
will become financially unviable.
Against these adverse conditions, government is pushing
through a reform package which requires farmers to produce 4.3 million
tonnes of cane without giving them any incentives or assurances to guarantee
their financial viability.
Cane production has fallen drastically in the past five
years and is still falling. In 1999 we produced 4 million tonnes of cane.
This year production is a mere 2.7 million tonnes. This is a massive 1.3
million tonne decline in just five years. Next year’s crop is expected to be
even smaller because of the effects of the drought.
We have been advocating a guaranteed price of $55 a tonne
for cane. Unless this comes through, cane farming will not be financially
viable. We had also asked for subsidies on fuel and farm inputs to cushion
the rising costs of production and cartage to the mills. But I see no such
incentive for the cane farmer in Budget 2006.
Under the circumstances, one must look very critically at the wisdom of the
$86 million reform package government is pushing through.
I believe the Board of the Fiji Sugar Corporation had
advised caution. In view of the uncertainties surrounding the future of cane
farming, the FSC Board had initially suggested that capital works to upgrade
the mills and other infrastructure be spread over a longer time frame and be
undertaken from within the financial resources of the Corporation.
FSC is on record as having advised that despite the huge
investment to upgrade the four mills; its sugar manufacturing operations
will continue to run in the red. It is hoping, however, to make an overall
profit from its co-generation revenue to keep it afloat.
The cane farmer has no such recourse to fall back on. He
will not produce cane, if it means heavy financial losses. That is the
bottom line.
I myself have publicly expressed grave reservations about
the projections on which the entire reform package rests. The projections
are seriously flawed. For instance, the recommendations of the Indian Sugar
Technology Mission are based on cane production of 4.3 million tonnes being
achieved in the very near future.
This is clearly unrealistic, considering that our
production is now down to 2.7 million tonnes. For co-generation to be
profitable, a minimum of 4.3 million tonnes of cane will be required to
produce the required quantities of bagasse for fuel.
The point is that the Prime Minister has ignored good
advice and caution, to bulldoze through a very expensive reform package
which places a heavy additional debt servicing burden on the industry.
The focus of the entire reform package is on FSC. No
consideration is being given to problems facing cane farmers. Unless, they
are given incentives, more and more of them will exit the industry. It is a
pity that such is likely to happen at a time when more Fijians are poised to
enter the industry.
The cogeneration upgrade we are told will cost an
additional $60 million, over and above the $86 million needed for mill
upgrade. Here again, many industry experts have questioned this figure as
being excessive.
The combined cost of both the projects comes to around
$146 million which is no small amount for an economy our size. Independent
verification of the project costs need to be done before committing the
Corporation, so as to comply with the requirements for transparency. But I
believe this is not being done.
Finally, a word on ethanol. The Hon Minister refers to ethanol production
for export purposes. It is well known that a feasibility study was carried
out on ethanol by FSC. The idea was then dropped because fuel prices were
not high enough to warrant the capital layout required.
Now with the current high price of fossil fuel, the
project is being considered again. But unless another feasibility is carried
out, it is best not to put too much hope on this. In any case, even if it
comes on line, we are looking at long term benefits. Our problems require
more immediate remedies.
I wish to record my appreciation and thanks to the
Government of India and the Sugar Technology Mission from India for their
assistance and professional advice. They have done their work and their
recommendations are based on assumptions which all stakeholders in the
industry are asked to deliver to obtain the desired results.
I have laid before this House, the problems of cane
growers who are the real key to the equation. If we cannot address their
legitimate concerns then, I am afraid, our expectations from this huge
exercise may not be fully realised.
In the final analysis, the viability of cane farming and
the entire industry including diversification into cogeneration and ethanol
production, rests on the availability of land leases on secure and mutually
satisfactory conditions of tenure; plus a cane price that will ensure
profitability to the cane farmer.
Unless the land issue is resolved amicably, taking into
account the interests of both parties, the landowners as well as the tenant
community, no amount of upgrading and restructuring will save the sugar
industry. Land remains the key to its survival, and indeed, I might add to
agricultural development and prosperity in Fiji generally.
Land
That brings me to the vexed question of land.
I agree with the Hon Minister of Finance that the land
issue “overshadows many important developments” for our nation. There is
urgency in reaching a solution but that must be based on a bipartisan
approach that takes into consideration the interests and the welfare of all
stakeholders.
I say this, Mr. Speaker, because it is now clear that
there is a pre-determined effort to impose a solution on the nation that
serves a certain political agenda. Indeed, this entire mess that we are
faced with and the hardships that farmers and landowners have faced as a
result, are the handiwork of a few politically motivated deviants.
For this reason, Sir, I seek your indulgence in taking some time to provide
an outline history of what had really happened and how the land issue was
hijacked by certain individuals with questionable motives.
Leases under ALTA began expiring in September 1997.
Thereupon, the NLTB, under the direction of its general manager, the late
Maika Qarikau resorted to a policy of indiscriminate eviction of Indian cane
farmers upon expiry of their leases.
This, undoubtedly, was a calculated move to pressure
Indian leaders at the time to agree to NLTA as the subject legislation for
all native agricultural land. This tactic was strongly resisted by both the
NFP and FLP parliamentarians who, time and again, expressed their preference
for ALTA to be retained.
Qarikau claimed that 80% of landowners wanted their land
back and leases would, therefore, not be renewed. He stated this quite
forcefully to the parliamentary Select Committee on Land which was set up by
the Rabuka Government in February 1998.
Now, between 1996 and 1998, the Rabuka Government had
commissioned two separate studies on the subject of expiring land leases and
the legislation that should apply to the granting of new leases.
The first study was done by the ALTA Review and Research
Unit within the Ministry of Agriculture. Its findings were that ALTA be
retained as the legislation governing agricultural leases.
The report of the ALTA Review and Research Unit was
rejected by the NLTB which insisted that landowners did not want to tie down
their land under ALTA for 30 years. Qarikau was adamant that if new leases
were to be given, then these were to be in the form of ‘rolling’ leases, to
be reviewed every five years, and should the landowners want the land back
it would then revert to them after the fifth year review period.
There was absolutely no security of tenure under this
rolling lease arrangement.
NLTB then appointed its own task force to compile its
demands. This was later released as the NLTB Task Force Report. It
recommended rolling leases and substantial increases in rent by adopting a
rental formula based on market value. But this formula remained largely
unexplained on paper.
In other words, the NLTB wanted an open cheque on rent
increases. Compensation was to be paid to NLTB by outgoing farmers for land
degredation.
Moreover, in breach of human rights principles, the NLTB
Task Force Report recommended that tenants of native land must not be
members of any union – obviously targeting the National Farmers Union – and
that no political activity of any kind would be permitted on native land.
Even the SVT Government was shocked by these absurd
demands of the NLTB. Lands Minister at the time, Mr. Militoni Leweniqila
ordered an independent study of the ALTA Review and Research Unit and the
NLTB Task Force reports. The independent study was to evaluate the
recommendations/demands in both the reports and make recommendations for
government’s consideration.
Mr. Cyril Farrow, a land valuer and administrator with
many years of experience on land matters in Fiji was appointed to carry out
the study. Mr. Farrow had worked in the Lands Department here for many years
and had also served as the Agricultural Tribunal. So, he brought with him
not only a thorough knowledge of the issues involved but also the
objectivity an exercise of this nature required.
Cyril Farrow reported in favour of retaining ALTA as the
legislation for agricultural leases. In his report, he rejected the NLTB
demands as being impractical and counter-productive. Mr. Farrow recommended
certain amendments to ALTA to address the concerns of the landowners as well
as tenants.
The independent Farrow Report became one of several
reports on ALTA, albeit an authoritative and independent one, but no action
was taken on its recommendations by the Rabuka administration which closer
to the general election also began singing the NLTB tune. At the time the
nation went to the polls in May 1999, the land issue remained unresolved.
The SVT government-instituted Joint Parliamentary Select Committee on Land
had virtually fizzled out after a few sittings.
Meanwhile, the indiscriminate non renewal of leases that
expired from September 1997, created severe hardship and uncertainties in
the cane belt as hundreds of farming families became displaced, homeless and
destitute overnight.
The incoming People’s Coalition Government inherited the
land problem. There was no doubt from the beginning that extremist
politicians in collaboration with the SVT Opposition were determined to use
the land as an issue to bring down the new government.
Keen to seek a solution to the impasse on land that would
protect the interests of both landowners and tenant farmers, the new
Government opened negotiations with the NLTB.
The Government made a submission to NLTB using the Farrow Report as its
basis but with amendments that took into account the concerns of landowners.
A cabinet sub-committee on land was formed to liaise with a NLTB
subcommittee to negotiate a mutually satisfactory arrangement.
Realising that the negotiations were likely to be somewhat
protracted, Government in the meanwhile decided that some steps would have
to be taken to deal with the crisis in the cane belt with the majority of
the leases about to expire in the year 2000 and 2001.
Unfortunately, every attempt by the People’s Coalition
Government to negotiate resettlement agreements with chiefs, was blocked by
the opposition group led by people like Maika Qarikau.
After several unsuccessful efforts, Government realised
that if the landowners were being withheld from leasing their land, then it
would be best to compensate displaced farmers and let them seek some form of
alternative livelihood. Ministry of Agriculture’s Land Resettlement and
Rehabilitation Unit was asked to prepare an assessment of what it would cost
Government to resettle displaced farmers on a per family basis. Based on
this assessment, the Government in Budget 2000, allocated a $28,000 grant to
a displaced farmer to seek alternative livelihood.
The scheme was open to both Indian and Fijian farmers and
a number of the Fijian farmers who were leasing native land and whose leases
had also not been renewed, had benefited from it by the time the coup took
place in May.
Meanwhile, to help incoming landowners who wanted to take
up farming on repossessed land, Cabinet also agreed to put aside $10,000 per
farmer to assist them.
Unfortunately, the grant became fodder for more propaganda
as our detractors deliberately distorted Government’s intentions and, along
with other lies, used it to inflame Fijian emotions on land.
The 2000 coup revealed the real motives of these
propagandists ... the fact that they were driven by self-interest rather
than the interests of the landowners. This became quite obvious when, taking
advantage of the lawlessness ushered in by their terrorist activities, the
rebels tried to impose the so-called Deed of Sovereignty on the landowners.
This was a document pushed by Qarikau, George Speight, Joe Dimuri and
others, designed to get landowners to sign away their land rights to the
Speight rebel group.
Post coup, one of the first acts of the Qarase headed
interim administration was to scrap the $28,000 grant just as the majority
of leases began to expire and were not renewed. The hardship in the
countryside created by the social and economic dislocation of thousands of
farming families whose leases were not renewed on expiry, was catastrophic.
This crisis aggravated the suffering already inflicted by the coup.
Since September 1997 to 2004-end, some 5700 leases have
expired. Only 1500 sitting tenants have had their leases renewed.
Quite apart from the acute social problems created by the
displacement of some 5000 farming families, the impact on the sugar industry
on the non renewal of these leases has been quite devastating.
Much of the land that was repossessed reverted to bush,
reducing cane production from a high of 4 million tonnes in 1999 to the
current levels of less than 3 million tonnes. Similarly, sugar revenue
declined from a high of $282 million for the 1999 season to $224 million
last year.
Landowners have also suffered millions of dollars in
losses as a result of the decision not to renew leases. Many of them have
since reverted to renewal of leases under ALTA, as has the NLTB in view of
the monetary loss that has accrued from non renewal of leases.
It is now obvious that landowners had been ill advised.
The message that came through loud and clear at all recent
public hearings of the Parliamentary Select Committee on Land was that
landowners were quite willing to lease their land rather than see it lie
idle.
But the damage may be irretrievable. People have been put
off and it will take a lot of time and effort to restore the trust and
confidence that once governed the relationship between landowners and
tenants.
It is unfortunate, therefore, that the SDL Government is
continuing to play similar politics on the issue of leases. It is once again
playing the Qarikau game in its insistence that ALTA be scrapped and
replaced by NLTA, dangling the illusory carrot of 50 year leases to win
support. Another argument used by government is that the GCC wants it that
way.
It should be remembered that the NLTB and the Great
Council of Chiefs had both agreed to ALTA being an entrenched legislation.
Why do they today want to scrap it ?
The tenant community, on its part, is not fooled by the
government’s latest proposals: -
• one, for 50-year leases to be reviewed between the 35th
and 40th year of tenancy; with extension not less than 20 years and
• two, for 20 year leases to be reviewed between the 15th
and 17th year of tenancy.
The 50-year lease is a red-herring which the tenant
community will not bite. In reality, the intention is to grant only 20 year
leases and that is too short a tenancy to attract farmers.
Instead of arriving at a solution through consensus, in
the spirit of bipartisan politics on such a sensitive national issue, the
government has taken a unilateral decision to push through legislation that
will force NLTA on to the tenant community, well knowing that it will not
succeed unless the Opposition votes for it.
Coming just before a general election, the move is no
doubt motivated by political considerations rather than any genuine attempt
to reach a solution to the volatile question of land.
Sensitivities occur on both sides. It is easy to spew out
rhetoric on the need for reconciliation and rebuilding of trust. But trust
and true reconciliation can only be achieved through genuine leadership and
a willingness to rise above parochial interests.
We believe the best option available here is to accept the
Farrow Report as a basis for negotiation. A consensual solution, rather than
unilateral action, is the only way forward, and I urge the government to
proceed on that premise.
Tourism
With serious doubts continuing to prevail over key sectors
of garment, sugar and land, government’s economic strategies are forced to
centre around one major industry, that is tourism.
But tourism as we all know is a fairly fickle industry. It
is extremely vulnerable to cyclones and other adverse natural conditions, to
epidemics, to political upheavals as well as to external factors such as
terrorism and wars.
It is unwise for any government to put all its eggs in one
basket. Besides, tourism has a very high rate of leakage, put at around
60-65%.
In this respect, the Opposition welcomes the decision to levy a 5 % bed tax
on the industry. We believe it is a fair tax that will at least bring in
some return to a country that has invested heavily in tourism.
This industry is well subsidised by the local taxpayer in
terms of infrastructure and other inputs. It is largely a tax-free industry,
enjoying tax free holidays and huge concessions on capital goods. It is time
it contributed its share to the economy.
Mahogany
Mr. Speaker, Sir, I wish to now turn my attention to
mahogany. Another sad victim of political games. A multi-million dollar
prospect for Fiji that promised huge returns to landowners and to the nation
at large, has today been reduced to exploitation by a few self-serving
individuals, connected with the SDL.
The People’s Coalition Government was about to tie up a
joint venture deal with the Commonwealth Development Corporation to harvest
mahogany and for downstream processing, guaranteed to bring in hundreds of
millions of dollars.
This was totally unpalatable to some greedy individuals
like George Speight, and others who were part of his scheme, who felt
themselves excluded from the lucrative mahogany dollars. This, Sir, was the
real motive for the coup as far as George Speight was concerned.
The Prime Minister himself, and some of his present
Cabinet colleagues, were very outspoken at the time on their criticism of
the CDC deal. He took out full page ads to propagate his communal views and
to stir up emotions against the People’s Coalition Government.
But let me ask: what has the SDL government done in the
past five years to realise the vast potential of the mahogany resource?
Not a thing. Budget 2006 gives no indication of government
policy on mahogany. It has avoided this subject like a plague!
Meanwhile, the trees are fast maturing. Logging is being
permitted on an ad hoc basis. Under the guise of a so-called trial scheme,
senior officials of the SDL Party and their cohorts are minting money from
mahogany with paltry returns to the landowners. It’s the same old story: the
elite are getting rich while the landowners are being ripped off.
One does not blame them for getting furious and
frustrated. I refer to the roadblock erected a week ago by angry landowners
in Tailevu, against the milling activities of a company reportedly owned by
a senior SDL official.
Landowners claimed they were being ripped off by this
company. They had been promised jobs as well as assistance with village
development projects. Nothing had come through.
Isn’t this typical of how native landowners have always
been ripped off by those posing as their saviour?
Let me say, Mr. Speaker, had we remained in office, the
mahogany venture would have really kicked off with the CDC as joint venture
partner and the landowners would have been reaping the benefits of millions
of dollars that would have accrued to them from downstream processing of
their timber resource.
Education
The Hon Minister has not said much on Education except to
give figures on financial allocations to the Ministry of Education since
2001. He has announced that since 2001 Government has provided over $1
billion to the education sector and that this is an increase of $324 million
or 42% compared to what was allocated between 1996 and 2000.
Let me say that such statistical comparisons are
meaningless because we all know that Budget allocations for education have
been increased each year by every successive government since independence.
Had the Hon Minister gone back to 1970, he might have come
up with some preposterous figures to boast how much the SDL government had
done for education in the past five years, compared to what the other
governments had done in the past 30 years!
However, such devious use of statistics does not help lift
the education standards of our children. If comparisons are to be made then
it is only proper that facts and figures are accurately presented and not
distorted or manipulated to mislead the people. But accuracy and fairness
are hardly the yardsticks by which this government is known.
The Hon Minister claims that… “Since 2002 parents are free
from paying tuition fee up to Form 6 level.” This Mr. Speaker is an exercise
in self-delusion and I will deal with it shortly.
First, let me give you an example to illustrate what the
SDL government has slashed from the Education Budgets of the previous
governments. I refer to the per capita grants to schools.
The per capita grant paid to secondary schools was slashed
by 50% by the Qarase administration in 2001.
Amounts previously paid were $14 per term per student in a secondary school
without vocational education and $16 per term per student in a secondary
school with vocational training. Reductions in these grants placed a heavy
burden on schools which found their incomes reduced substantially and almost
all schools were constrained to step up their fund-raising activities to
meet the shortfall.
We all know the difficulties poor families are faced with
in meeting their obligations to school fund raising activities. Many
children from these families are unable to meet the targets set for them by
school management and this has affected their status in the classroom. Many
being told not to come to classes unless they can meet their cash quota.
To this day the SDL government has not restored the grants
to their previous levels nor has it taken any steps to explain why it cannot
do so.
Next comes the so-called tuition fee assistance.
Regrettably, the picture is not as bright as the Hon
Minister has painted. His assertion that parents are free since 2002 from
paying tuition fee up to Form 6 level is misleading. The truth is that
government pays only a part of the fees charged by the schools.
In the case of primary schools, government’s contribution
is confined to just $36 per year or $12 per term – whereas the actual fees
and levies charged by schools range from $100-$300. Most schools levy an
admission charge, building fee, excursion fee, sports fee, library fees,
book hire fees and so on.
In secondary schools, government’s contribution is pegged
at $153 a year for students in Forms 3 and 4 and $165 per year for those in
Forms 5 and 6. The fees and levies charged by secondary schools, however,
amount to between $400-$1000, if one is undertaking a vocational course.
It was, therefore, quite appropriate for the President of
the Fiji Principal’s Association, Mr. Susau Mangreve to disclose that
government assistance to students amounts to only between 10-15% of the
total costs incurred by the parents and schools.
I might remind the Hon Minister that his government has
also slashed by half the $6000 annual grant for each pre-school teacher.
This grant was first introduced by the People’s Coalition Government in
2000. The reduction has placed a heavy burden on schools which provide
special pre-school or early childhood education.
But more importantly, government must realise that aside
from fees and levies, parents have to front up with money for bus fares,
uniforms, shoes, schoolbags, stationery, often text books as well – all
these add up to a tidy sum which in the case of families with low incomes is
a real nightmare.
I wonder if the government’s hastily convened Education
Summit earlier this year even looked at these problems in any depth.
Having said as much, let me say that the Opposition’s
concern about education goes beyond just funding. More importantly, it has
to do with the quality of education delivered to our youngsters.
I am personally quite dismayed by some recent policy
decisions of the Ministry of Education. There are two areas which are likely
to adversely affect our quality of education, reducing it to sub-standard
levels. In fact, we can already feel some of its effects.
I refer here particularly to the practice of scaling the
marks of students in the external examinations, and secondly, to a proposal
to replace some of the existing examinations with what is called “internal
assessment”.
Mr. Speaker, no convincing argument has ever been
presented to explain why scaling of marks is taking place. I believe it has
a political objective but let me assure those that advocate such devious
practices that in the long term such measures work against those they are
meant to benefit.
On the doubtful wisdom of scaling, may I draw the
attention of the Hon House to an editorial in the Fiji Sun of 9 November
which succinctly argues against the practice of scaling, looking at the
unfairness of it for students who score high marks.
With your indulgence Sir, I will quote one short paragraph
from the editorial comment:
“To educational laymen, however, it all seems part of a
worldwide trend to seek the lowest common denominator in all that we do – to
bring the clever down to the level of the dull, to dress success in the
clothes of failure. It’s been called ‘dumbing down’ meaning an attempt to
present a uniformly gray picture of society.”
In my view, this practice is grossly unfair to students
who top the scale academically. One has to consider the demoralising
psychological impact of such policies on high achievers whose efforts are
not given the recognition they deserve.
At the same time, there is incalculable damage done to those whose marks are
scaled up because it gives them a false picture of their academic worth. The
truth that surfaces when they face the real world or when they try to attain
tertiary qualifications, can be quite devastating.
For these reasons, it is not wise to create a false
picture of one’s worth. It is better to carry out streaming at an early
stage so that those who are inclined towards vocational work, can begin to
acquire the skills that will make them excel in areas for which they have
the necessary talents.
By the same token, most people are generally opposed to
the policy to abolish external exams placing greater emphasis on internal
assessment. I believe the two forms of assessment ought to be finely
balanced.
There is a place for external assessment in our education
system. It allows for the development of healthy competitive skills, the
natural desire of human beings to pitch their brains against odds. Take away
this challenge and I believe we will take away something fundamental from
our make up. Our children should be nurtured from an early stage to strive
for the best, to reach for the highest. Such skills can only be honed in a
competitive environment.
In this regard, Sir, may I remind the Hon House of the
“back to the basics” campaign led by both Bill Clinton in the United States
and Tony Blair in the UK in order to revamp their education systems which
had lost much of the benefits of the traditional approach to education.
Health
The appalling state of the Health Ministry - the acute
shortage of doctors, nurses and other key personnel, the unavailability of
essential drugs and proper equipment – these have become chronic problems
and are well known to the nation.
The Opposition spokesperson on Health will tackle the
ailing state of the Health sector in detail.
But I want to mention that this creates a highly
frustrating and demoralising environment in which consultants, doctors and
nurses and other paramedical personnel are required to work. It’s not
therefore surprising that they are leaving the service by the dozens to look
for more lucrative opportunities overseas.
Recent statistics reveal that we are losing 60 nurses a
year. This is half the number of graduates that come out of FSN each year –
the loss to the nation in terms of the cost of training these nurses, as
well in terms of shortage of qualified staff is enormous.
Recently, the CWM Hospital had to cancel all surgery
except emergency ones because of a shortage of anaesthetists.
It is not only more money overseas and a better life that
is driving Health personnel away. A contributory factor is also the fact
that in Fiji they are deprived of the opportunity for professional
advancement and development.
The whole atmosphere is so stifling and debilitating with
outdated equipment and the lack of professionalism, that there is little
opportunity for individuals to keep pace with modern developments in medical
science.
One of the problems is that this government has simply not
made adequate funding allocation for the Health sector. The capital budget
for Health, in particular, as a percentage of the total budget has been on
the decline.
Health is a very important component of national life. And
it is the poor who suffer when health facilities and the quality of health
care deteriorate.
Dismantling monopolies
For years now the business community has been complaining
about the high cost of doing business here. High cost components complained
of are the utilities (electricity, water, telecommunications and bank fees
and charges). Much of these can be fixed through fair competition being
introduced in these sectors.
Competition is an accepted mantra now, one which Fiji is
committed to pursue because of its membership of the WTO and, because it
makes plain common sense. But what do we see happening here?
The SDL government has bent over backwards to perpetuate
monopolies in key sectors of our economy much to the detriment of investment
and growth.
Greater competition in product markets can lead to lower
prices, greater choice, increased productivity and efficiency, ultimately
contributing to a country's growth and development.
There is an urgent need to introduce much needed
competition in the following sectors:
• television
• electricity
• telecommunications
All these entities are top heavy and bloated in the
absence of competition. As a result it is the public which is forced to
accept, grudgingly though, the high priced, poor services provided by these
entities.
Television
The continued protection of the television industry by way
of exclusive licensing arrangements has had a decidedly negative impact on
our television viewers. TV 1, in the absence of competition, continues to
air programs which have no intrinsic value for its viewers.
They are forced to endure cheap American and outdated
British programs. There is very little emphasis on programs which reflect
our various cultures and traditions, or are educational and informative. The
weekly vernacular segments are Government produced propaganda programs which
have little educational or cultural value.
When the Commerce Commission called for submissions on the
issue of exclusive licensing for Fiji TV, it received innumerable responses
from the public which were mostly complaints. Nearly all called for an end
to the monopoly enjoyed by Fiji TV.
However, it is obvious that this government has been
bullied by the interests of certain elitist Fijian shareholders and an
Indian businessman. Undoubtedly, these shareholders stand to profit
substantially if the monopoly continues.
The absence of competition has seen huge advertising and
promotional charges by TV 1 and the politicizing of news in return for
protection and tax holidays. It is needless to say that a Labour government
would act early to dismantle this.
Electricity Industry
The current cost of electricity is high. This monolithic
entity has for far too long been operating at levels that are way below its
maximum operating capacity.
Here I express concern at the recent Commerce Commission
sanctioned - across-the-board - average annual tariff increases over the
next 3 years of 3.2% for domestic users, 6.35% for commercial and industrial
users and 6.35% for maximum demand.
Such increases discriminate against a majority of our
people who are on low incomes and would find it hard to sustain any
increases in FEA charges.
Likewise commercial and industrial users would also pass these charges on to
their customers resulting in higher costs for all.
Telecommunications
The primary objective of regulation is to produce results
in the utility sectors of the economy which parallel those that would be
obtained under conditions of competition. Unfortunately, however, despite
the best efforts of the regulators, regulation cannot always be expected to
achieve this high standard.
Further, with the telephone industry being dominated by a
single entity, it can be exceedingly difficult for regulators such as the
Commerce Commission, to gather the necessary information to examine whether
the said utility is operating under an efficient and competitive regime.
This will lead to deliberate concealment of true operating
costs and revenue figures, which would undermine the ability of regulatory
agencies like the Commerce Commission from making empirical assessments on
call charges and other pricing structures.
Both the fixed land line service and the cellular network
of Vodafone Fiji need to be deregulated. Vodafone Fiji is minting money at
the expense of thousands of its subscribers by levying inordinately high
rental as well as call charges.
The recent reduction in call charges, of up to 70%, is an
apt illustration of just how much Vodafone Fiji was fleecing its customers
with Fastfone call charges at $1.98 cents/ minute.
The justification provided by Telecom Fiji against
deregulation, on grounds of its obligation to provide services to all of
Fiji, even when some of those services might not be economic, is simply an
unsustainable argument.
Telecom Fiji has been making substantial profits at the
expense of competition and some of these profits should have been redirected
towards developing appropriate infrastructure and providing the necessary
level of service to rural areas.
Strengthening the Regulatory Agencies of Government
There is an urgent need to strengthen regulatory agencies
such as the Commerce Commission, the Fair Trading Department and the Prices
and Incomes Board.
They must be armed with the necessary legislative and
compliance powers to enable them to effectively act as regulatory overseers
for a wide range of industries. Here I am referring to industries such as
telecommunications, electricity, and food manufacturing and processing.
The current resources and initiatives of the Commerce
Commission, FTD and the PIB are grossly inadequate and hinder efforts to
perform their duties effectively and diligently.
PIB has an important role to play in ensuring that price
controls and price surveillance is maintained on PIB listed items. It is
there to protect the consumer from exploitation by unscrupulous elements in
the business community.
The Commerce Commission and the FTD must move towards
stamping out unfair and anti competitive practices.
Transparency in the FDB and the FNPF
The FDB and FNPF are two financial institutions which hold
great importance for our people for different reasons. The FDB is tasked
with providing low cost capital to intending and established entrepreneurs,
particularly in the agricultural sector, and the FNPF holds savings for the
workers as retirement funds.
However, there are certain concerns that must be
addressed.
Fiji Development Bank
According to the FDB Annual Report for 2004, its doubtful
loans and advances have increased from $8.2 million in 2003 to $11.4 million
in 2004. The provision for doubtful debts jumped from $32.542 million to $38
million for the same period.
The same report under the title Financial Performance
conceded: “it was critical that the cost of borrowing be brought in line
with the declining loan portfolio to improve the Bank’s profitability
position.”
Clearly the FDB needs to be more prudent in the management
of its finances and in particular, in managing its loan portfolios,
otherwise it will be the taxpayers of this country who will continue to prop
up this bank, given the incompetence and laxity of its managers with respect
to financial management.
Fiji National Provident Fund
The FNPF is an organization in need of urgent review and
monitoring. It has been under siege by the SDL government for borrowing from
the retirement funds of members. Its investment portfolio needs very close
monitoring to ensure that investments undertaken are in the best interests
of members, and ensure maximum returns.
The ATH share debacle has already cost the members of the
Fund some $240 million and there simply cannot be any further haemorrhaging
of workers’ retirement funds due to bad investments.
FNPF is a $2 billion financial institution. It needs
qualified and competent management and board to handle its investment
portfolio so as to ensure maximum returns to members.
There is concern that the Fund was taken for a ride in its
acquisition of the Holiday Inn in Suva. It is reported to have paid more
than twice the actual worth of the hotel.
Furthermore, I am advised that its Natadola Hotel project
is likely to incur cost overruns to the tune of some $30 million and this
will be paid out of members’ funds.
While I do not begrudge the FNPF investing in hotels and
real estate, I do feel that before these projects are entered into,
especially those which exceed $5 million, a proper feasibility study should
be done and that the findings of such studies be made public. Parliamentary
approval must also be required to be sought for such investments.
Furthermore, there must be greater transparency in the
operations of the Fund. At present very little information is disclosed on
the Fund’s activities, in particular, its investment dealings. The Fund and
its trustees cannot play Russian roulette with the hard earned savings of
its members.
FNPF Board members must be bound by a code of ethics,
which would require them to act in the best interests of the members. Any
divergence from this duty should see them indicted for breach of fiduciary
duties.
There must be an absolute commitment to sound corporate
governance, especially as it involves the management of retirement funds of
thousands of ordinary workers.
Fiji should guard against the corporate scams that have
wiped out pension funds in several countries abroad.
Civil Service Reforms
Much has been said on the civil service in recent weeks,
more particularly, since the award of COLA based increments to civil
servants.
The Opposition has said before, and I reiterate here, that
no number of so-called reforms will return the service to the level of
efficiency and competence it enjoyed prior to 1987.
Since then the public service has been heavily
politicised, beginning with the indiscriminate purge of senior and
experienced Indian officers in the civil service in the wake of the 1987
coups.
Since then political appointments based on considerations
other than merit, have brought disrepute to the service, severely
undermining its competency and efficiency.
The State is required by the Constitution to observe
ethnic balance in the recruitment and promotion of officers, in line with
the demographic composition of the ethnic groups.
Let me illustrate my point with some statistics which show
huge ethnic imbalance in the service as at the end of 2004. These figures
have been taken from official documents.
• Out of a total of 18,486 officers in the service, 63% or
11,685 were indigenous Fijians; 6247 or 34% were Indians, and 423 or 2.3%
were Others. The remainder of 131 (0.7%) were Expatriates.
• In the top four hierarchy of the civil service, that is
US01 to US04 category- out of a total of 148 officers, Fijians comprised 117
or a 79%, Indians were 21 or 14% ; Others were 8, that is 5.4%.
This kind of imbalance exists throughout the other ranks
of the service. Racially discriminatory policies on recruitment and
promotions, is largely responsible for the heavy skills drain from Fiji.
Today the service is characterised by bad leadership, a
lack of work ethics and discipline. The problem starts from the top … people
who are proven failures have been reinstated as chief executive officers
with monumental salaries and perks - clearly political appointments!
How then can one expect to see positive changes in its
competency and productivity?
The service needs an injection of new blood, young,
dynamic, innovative and committed men and women at the top. People carefully
chosen for their ability and talents. The ageing misfits well past
retirement age who currently occupy senior positions should be immediately
replaced by those who can make a difference.
Increase in Import Duty
Another alarming trend has emerged in the budgets of the
SDL Government - I refer to the periodical increase in duty on a whole range
of consumer goods.
At the time VAT was imposed on us in 1992, it was made
categorically clear that import duty would come down simultaneously under
the deregulation process.
And indeed in the following years duty was gradually
reduced on almost all imported goods; some items were given zero rating.
But this government has been breaching that trust. In
Budget 2003, it surreptitiously slapped a 15% duty increase on a range of
500 consumer goods, many of them food and every day household items.
Budget 2006 continues this trend, adding scores of other
items to this list ranging from white goods including refrigerators, cook
tops, washing machines, dryers, air conditioners, fans etc to hi-fi stereo
units such as television screens, DVDs, cameras, furniture, mattresses,
shoes and other leather goods.
The point is Government is taking two bites at the cherry.
It either opts for deregulation and VAT which we were told is a much more
transparent form of taxation or we take a retrograde step, abolish VAT and
return to raising revenue through import duties.
Secondly, Sir, I am concerned at the rational used in
levying Duty. For instance, in Budget 2003, as I mentioned before, duty went
up 15% on 500 items which included biscuits, chocolates, imported fruit
drinks and other beverages, coffee, tea etc.
Yet, Sir, the Hon Finance Minister, in his wisdom, decided
that duty must come down on porcelain items – which clearly comes in the
range of luxury goods. As a result, some big retail stores are now flooded
with china ware and other porcelain goods.
Similarly this year Duty was reduced on tiles from the
current 15% to a mere 3%. Duty was also reduced on chandeliers and
decorative glass products to 3%.
These are clearly luxury items. The people of Fiji have a
right to ask what rationale was used to bring duty down on tiles and
chandeliers to a mere 3%? At the same time, Budget 2006 doubles duty from
15% to 27% on sweets and chocolates, making them more expensive just ahead
of Christmas.
We all know who benefits from the duty reduction on these
luxury items…hardware merchants who have close ties with the SDL Government.
And I ask how much was put into the SDL coffers by the
hardware merchants for this favour?
The increase in duty on a whole range of consumer items is
the price our people are paying for government’s lack of financial
discipline and its mismanagement of the economy.
It is squandering away taxpayers’ money and is then forced
to raise additional revenue to pay for its extravagance through the levy of
special import duty.
The other point, here, is the tariff protection given to
local manufacturers. I haven nothing against it but I would like to see a
level playing field here, with all manufacturers treated alike – no special
favours for some as the case is at present.
Value Added Tax
Finally, a word on the removal of VAT from six staple food
items – flour/sharps, powdered milk, tinned fish, tea, rice and kerosene.
We of course welcome the move. After all, it is a Fiji
Labour Party policy that VAT should not be levied on staple food items and
the 1999 Labour-led Government had removed VAT as well as Customs Duty from
staple food items and water rates.
We have all along condemned government’s insensitivity in
re-imposing VAT on these food items after the 2000 coup. What we are
highlighting now is the obvious timing of the announcement.
For five long years, the poor suffered under the yoke of
escalating food prices. People were crying out for some form of relief – but
this cry failed to reach the ears of this insensitive government which not
only re-imposed VAT on staple food items, it also imposed a blanket increase
in VAT from 10% to 12.5%, as an easy source of revenue.
Now on the eve of a general election, scared it may lose
because of its insensitivity towards the poor, the SDL Government finally
removes VAT from six staple food items. It does not remove Customs Duty,
only VAT.
I can only say Sir that the people of Fiji are not fools –
they can clearly see through such Machiavellian machinations!
The Amnesty Bill
The Prime Minister recently announced that substantial
amendments will be made to this despicable piece of proposed legislation. He
has referred, in particular, to amendments to the amnesty provisions in the
Bill.
He has also assured that the Bill will be amended to keep
it within the bounds of the Constitution and that the independence of the
judiciary, the office of the DPP and the Commissioner of Police will not be
undermined.
These announcements were made following the Commonwealth
Parliamentary Association conference here last September and also during the
Prime Minister’s much publicised India visit.
Well that is fine. If the Hon Prime Minister has had a
change of heart and has decided to do the right thing then he should,
without delay, publish the amendments he proposes to make to the Bill.
Better still he should scrap the Bill.
Only after the promised amendments are made public will
the people of Fiji and the international community know whether or not the
government has redeemed itself in this matter.
Let me say that the Amnesty Bill has created feelings of
apprehension and insecurity among our people. It has deeply divided the
nation and has discouraged investment. It has hurt Fiji’s standing and image
in the international community.
The sooner we put this sordid Bill behind us the better it
will be for all who have Fiji truly at heart.
Conclusion
Finally, this is the government’s last budget before the
general elections. At the end of the day, it is appropriate to ask what
legacy the SDL government is leaving behind after five years in office.
A cursory study will reveal a dismal record of failures
and bad governance. Indeed, during its term in office, national problems
have intensified and compounded.
Let me elaborate:
• government has failed abysmally to control expenditure
and reduce its Budget deficit to acceptable levels; or
• to contain ballooning levels of public debt which have
doubled in five years – what previous governments borrowed in 30 years, this
government did in just five … what a record!
• it has run down the economy from a remarkable growth
level of 10% in 1999 to less than 1% projected for next year
• it has presided over the demise of our major exports –
garments, sugar, fisheries, gold, forestry products
• it has not been able to dismantle monopolies in the
utilities sector, thereby contributing to the high cost of doing business
and high consumer prices
• it has multiplied the hardship of ordinary families
through its anti-social policies
• it has neglected agriculture and driven the rural sector
to stagnation, forcing an exodus to urban centres of desperate people in
search of jobs and a better quality of life
• it has created deep divisions within our communities by
its discriminatory policies and practices
• it has not resolved the pressing issue of land tenure
• our Health services have been allowed to run down to
appalling levels of neglect, inefficiency and incompetence, lacking adequate
manpower, resources and drugs
• rampant corruption, scams, abuse of office and public
funds have left a deep stigma over government operations;
Furthermore, the SDL’s five years in office have been
marked by a blatant disregard for the Constitution and the rule of law;
racial discrimination in the guise of affirmative action and a lack of
ethics and integrity in the handling of national affairs.
In five years it has not bothered to bring in a Code of
Conduct legislation – in blatant disregard of Constitutional requirements.
Nor has it enacted an anti-corrupt practices legislation – a clear
indication that this government condones corruption.
The government boasts of having restored political stability and law and
order. This boast is hollow considering that the real credit for national
stability goes to the determination of the security forces, the army and the
police to uphold the rule of law.
Nor has this government done much to advance the cause of
the indigenous people except to spew out rhetoric at regular intervals. It
is no exaggeration that the plight of the ordinary Fijian has steadily
worsened since 2000 – more of them are now living in poverty; more of them
are now queuing up for the State’s meagre social welfare assistance, and
more of them are now inhabiting Fiji’s mushrooming slums and squatter
settlements.
The increasing movement of rural/urban migration is an
indictment of the SDL government’s failure to develop the rural sector and
encourage agro- based activities. As a result people are exiting the
villages in scores in search of a job and better lives in towns and cities.
• government’s policies on land and its failure to resolve
the land issue, is depriving landowners of millions of dollars in rent
money;
• its failure to deal with the mahogany project is again
depriving landowners of millions of dollars in revenue while the trees are
fast maturing and villagers are being exploited by timber sharks
• the shipyard which largely employs Fijians is in a shambles – hundreds
have lost employment there and the government has remained blissfully
inactive
• the fishing industry is on the decline, with the Fijians
complaining they are being squeezed out of its wealth by foreigners
• despite a lot of rhetoric, nothing has been done to
bring the ordinary Fijian into the mainstream of commerce. Those who have
benefited here are collaborators of the government and the elite of Fijian
society
• The affirmative action programme it seems was designed
more to enrich hardware merchants than to empower the indigenous community.
Under the scheme, the same forks and spades are sold four or five times by
hardware companies, I’m told - such is the state of corruption under the SDL
Government!
This explains why, in five years, an anti-corrupt
practices legislation has not seen the light of the day. If we are to stamp
out corruption in this country, then tough legislation carrying a mandatory
jail term is a must.
The proliferation of corrupt practices in Fiji should be
of serious concern to all right minded citizens. What we are witnessing is
the interaction of an unholy alliance between the rich and the powerful in
our nation. First formed in 1987, these reactionary forces feel threatened
by a reformist government and as such, militate against the poor.
The oft played race card is a calculated strategy to pit
one race against another, and keep our people divided. so as to best promote
the vested interests of this self-serving minority.
It is time the people of Fiji woke up to their
machinations for they have given us nothing but 18 years of suffering and
hardship. Look at where it has taken our nation. Fiji is abundantly endowed
with resources and skills. No one in this country needs to be poor, no one
needs to be deprived.
If we are to surmount our many problems, if we are to
realise our full potential as a nation so that the benefits of development
are passed on to all and sundry, then we must reject racist and
fundamentalist forces.
We must truly embrace multiculturalism because it is the
only way forward. In the years between 1970-1987, Fiji moved forward in
leaps and bounds. Except for one short year in 1999/2000 we have not been
able to recover this pace.
There has to be a major paradigm shift in our attitudes.
The message in the past five years, in particular, has come through loud and
clear: we need to get together as a nation.
God Bless Fiji.
And on that note, I conclude my response. Regrettably, I
cannot support the Appropriation Bill before the House for reasons I have
stated. |