Khaiyum squanders $14m on film making

  • 11th August 2016
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We are absolutely flabbergasted that Fiji proudly paid $14m (USD7m)cheque
hard cash to a US film production company for using Fiji as a location for a TV reality show (FT 11/8).

Little wonder the company, Survivor Entertainment Group, was all smiles at the presentation of the cheque. Where else in the world would a government be stupid enough to handover such a huge sum as reward to a commercial/profit-making organisation?

How does Finance Minister Aiyaz Khaiyum justify such outrageous generosity to a company that merely used Fiji for its own commercial benefits, and will be making hundreds of millions of dollars from screening the Survivor television series worldwide. It is not as if they set up a film industry here.

Anticipating criticism, Khaiyum got FRCA officials to say that $5m was collected in local taxes aside from an estimated $50m injected into the economy by the company.

Absolutely preposterous – did they pick the figure out of a hat? A $50m injection into our economy over 9 months would have certainly shown much increased activity particularly in the Nadi/Lautoka area. As for employing 340 locals, they would have been low paid service workers.

One can understand government granting a tax/duty concessions to attract such ventures – but to handover hard cash at a time when the national economy has suffered such a huge setback from the devastating Cyclone Winston, is simply foolhardy.
What is worse is that the film companies include in their spend payments made to overseas service providers – that is a sizeable sum and is money NOT spent here. Why should it then qualify as rebatable expenditure?

That $14 million could have paid for new homes for 1400 families at $10,000 each – those who had lost their homes due to the cyclone and those too poor to afford a home for themselves. After all, many of them are still, 6 months after the cyclone, living in tents or their roofless homes waiting for assistance to rebuild.

Our own people, poor and not so poor, are being strangled through countless taxes imposed by Khaiyum as Finance Minister, yet our hard earned money is being squandered on multi-rich foreign companies for whom USD7million is short change anyway.

New taxes imposed include:
• the 9% VAT on basic food items
• 6 % environment tax
• Vaying rates of Stamp duty on almost all legal agreements
• Sales tax on all vehicles
• 9% VAT on residential rents which were previously zero-rated
If we are to reward the private sector, what about recognising our local companies that have invested heavily in Fiji over the years, provide employment to thousands of local people and generate foreign reserves through exports. Surely the multiplier effect on the economy of their investment would be many times more than a short, one-off investment by a foreign film company?
Khaiyum’s logic certainly baffles the imagination!