Chaudhry responds to Khaiyum

[posted 30 Nov 2010,1600]

Fiji Labour Party leader Mahendra Chaudhry has reiterated his concern that the imposition of a 15% VAT will bring acute hardship to the poor and low and middle income families.

He was replying to comments on Fiji Village by interim Attorney General Aiyaz Sayed Khaiyum that Mr Chaudhry’s comments regarding VAT were “misguided”. And that political parties like FLP were using “the issue as a political point scoring exercise”.

Labour Leader Mahendra Chaudhry responds as follows:

1. that Mr Chaudhry is using the issue as a political point scoring      exercise

Similar concerns on the devastating effect of the VAT increase on the poor have been expressed by Father Kevin Barr and Premila Kumar, CEO Consumer Council of Fiji: “Neither of the two are political, they have no axe to grind. How does Khaiyum brush off their criticism?”

Mr Chaudhry reminds the interim Attorney General that in 2007 when it decided to rescind the 15% VAT imposed by the deposed SDL government, the interim administration had clearly conceded that the hike would hurt the poor.

2. that Mr Chaudhry is misguided in saying that the poor were being made to pay the price for indiscriminate government borrowings.

This is a fact and something that the acting Finance Minister Khaiyum had himself acknowledged in his 2011 Budget address: “The increase in VAT will ensure that Fiji is able to sustain its debt repayments now and in the future”.

3. that the increases are a result of the ‘fundamentals of the economy and financial systems being put right’.

“It is quite clear that these fundamentals are being fixed at the expense of the poor in Fiji,” Mr. Chaudhry said.

4. that people should not forget the 9% reduction in the prices of       many    food items through the Commerce Commission’s price determination

The 9% reduction in food prices by the Commerce Commission two weeks earlier had been a “gimmick” to try and soften the blow of raising VAT to 15%.

We all know that the lowered prices were raised again within days following complaints from retailers! In any event, it does not make sense to say that we will artificially lower the prices before pushing them up again!

One should remember that it was government action in removing PIB price controls coupled with the devaluation of the Fiji Dollar, that had sent these prices spiralling in the first place.

5. that there has been very little criticism of the Budget implying that
   it had been accepted by all as a fair Budget

The interim administration’s PER has stifled the voice of the people through its rigorous censorship of the media. The people of Fiji no longer have an avenue to express their true feelings on such impositions.

Mahendra Chaudhry
Secretary-General/Leader