Opposition’s reply to Budget 2006

  • 15th November 2005
  • 2005
  • // Display comment count + link

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%
2013 $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.