No benefit for ordinary worker in Budget 2017-18

  • 30th June 2017
  • 2017
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The ordinary worker gets no benefits from Budget 2017-18, says Labour Leader Mahendra Chaudhry.

“It is a show Budget which flaunts the allocation of big moneys to different sectors but we will have to wait and see how much of this funding actually trickles down. We know from past experience that moneys allocated are not actually released to ministries and departments,” said Labour Leader Mahendra Chaudhry.

The poor will be disappointed to see that the 9% VAT on basic food items imposed by Economy Minister Aiyaz Sayed Khaiyum in Budget 2016 remains despite strong protests from the public.

The National Minimum Wage of $2.68 an hour announced by the Minister is an insult to workers. It is grossly inadequate to meet the basic needs of the ordinary worker.

The ordinary worker will also not benefit from the increase in the tax threshold to $30,000.  It is acknowledged that at least 65% of our workers earn below poverty line wages. The minister should have raised the minimum wage to help them out of the poverty pit.

“What we see here is an election budget with a lot of money being thrown around to impress the voters – increasing allowances for the poor, catering for the handicapped, increasing the tax threshold etc. But, in fact, the Budget is absolutely silent on any real long term measures to tackle the roots of poverty through increasing employment particularly for our youth, raising wage rates for the ordinary worker, bringing down the cost of food and other living costs,” Mr Chaudhry said.

On Public Service pay increases, Mr Chaudhry said: “It is unacceptable that civil servants are being forced to convert to yearly contracts in return for pay increases promised in the Budget. Those who decline have been told that they will not qualify for the increases.

“This is sheer blackmail and in contravention of the provisions of the Employment Relations Act. Public service unions must fight hard against this draconian measure. It is question of security of employment of their members,” said Mr Chaudhry.

On housing, the $60m allocated for affordable housing through the Reserve Bank of Fiji, will not assist people on lower incomes. The truth is that most of our low income workers, those really in need of assistance,  will not qualify for it. They will not be able to meet the bank’s lending criteria.

The other objectionable feature of the scheme Mr Khaiyum outlined for the construction of a multi-unit housing project by FNPF at Matavolivoli, Nadi is the fostering of class differences. It will also create social problems.

On the sugar industry, it is not clear whether the subsidies on fertilisers and weedicides are a one-off concession for the 2018 elections or whether they were designed to stay in place.

The Budget makes no mention of $100 a tonne guaranteed minimum price demanded by the farmers. Nor does it make any provision for the construction of a new mill for the Ra cane growers.

Mounting Debt levels remain a major worry contrary to claims by the Minister that it is being reduced. Debt repayment cost in the 2017-18 Budget has gone up by $65m, from $153m in the last Budget to $217m.

This underscores the fact that we are increasing our reliance on borrowed money. The Budget deficit at 4.5% of the GDP is on the higher side.

“The increase of $700m in revenue seems to be a book balancing exercise to match a similar increase in expenditure. This is improper practice and distorts the real picture.