2021/2022 Fiji Budget Highlights

Fiji’s Minister for Economy Aiyaz Sayed-Khaiyum announced the country’s 2021/2022 national budget tonight, projected to raise revenue of $2.08 billion, for a total expenditure of $3.69 billion resulting in a deficit budget of $1.61 billion.

He also announced a host of socio-economic initiatives aimed to help Fijians cope with the impacts of the COVID-19 pandemic, which hinges on the country achieving its vaccination targets.

“As we make clear, if we fail or fall short, we’ll have to revise the budget to cut back on… including social welfare, and reduce our funding commitments across government in every sector,” Sayed-Khaiyum.

The Fijian Government hopes to at least fully vaccinate 80% of the target population by 31 October this year. The vaccination target population stands at 586,651 and 80% of that, 469,320.

As of 14 July, 377,090 adults in Fiji have received their first dose of the vaccine and 73,127 have received their second doses

A debate on the budget has been scheduled for Monday, 26 July, beginning at 9.30 am.

Some of the key announcements and highlights are as follows:

Subsidised micro-insurance coverage for all Social Welfare recipients through the Government Micro Insurance Program at a cost of $5.6 million per year.
- For the new insurance term, those eligible for term life and funeral benefits must be fully vaccinated by 1 November 2021.
  - Why it Matters? This insurance policy pays out in the event of death, house fires and sickness and vaccination is a requirement of insurance companies, given the severe risks of death due to COVID-19.

Electricity and Water Subsidy (effective from 1 August 2021 to 31 January 2022):
- Continued provision of free water to households with an annual household income of less than $30,000 for up to 92,500 litres of water.
- For households earning an annual income of less than $30,000, government is providing a subsidy of 16.34 cents per unit for the 100 kilowatts of power usage.
  - Beneficiaries: Fijian Government will pay the full cost of 34.01 cents for approximately 50,000 households at a total cost $11 million dollars.
  - Condition: This policy depends on vaccination rates climbing, so it will be reviewed in six months’ time.
  - Additional Benefit: Subsidized domestic customers will get six weeks to pay their electricity bill without disconnection.
    - Non-subsidised domestic customers will get four weeks for their bill payment.
    - This extended bill payment will be provided for six months from 1 August 2021 to 31 January 2022 before it is reviewed.

Market Vedors – Full-time or Casual:
- Full market stall fees for one year from 1 August 2021 to 31 July 2022 paid for.
- How? $2.6 million is allocated for this
- Beneficiaries: Around 8,000 vendors.
- Why it Matters? Assisted vendors can keep more of their income, use it to sustain their family, use it to build their business, and lower their prices if it helps them sell and earn more.

Paid inshore fishing licence fees and other associated MSAF fees for the local fishing industry for the next two years
- Beneficiaries: All fishing licence holders and registered boat owners with an allocation of $200,000 for the benefit of more than 3,000 license holders and boat owners.
- In addition:
  - Registration fees, annual boat survey fees and boat master licenses are also now valid for five years for fishing boats shorter than 15 meters.
  - To grant more certainty to fishers, the Offshore Fisheries Management Act 2012 will be amended to extend the terms of offshore fishing licenses from 36 months to a maximum of 20 years.
- Why it Matters? If you are fishing for a living, you know you will be licensed for up to two decades so you can make investments, or take out loans, that are more suited to a more certain timeline.

5% subsidy for investments in fishing boats with value above $1 million to $2 million dollars with funding allocation of $500,000.
- Eligibility: The boat needs to be in accordance with low-carbon standards.
- Why it Matters? We want there to be more opportunity in our blue economy but that does not come at the cost of rising emissions. We are a country committed to net-zero emissions by mid-century, and we have to encourage that transition wherever there is an opportunity to do so.

Security Guards Licence fees:The government will also pay security licence fees for security guards for the next 12 months.

Incentive for Budding Seafarers: Government will also pay for training and certification fees for those Fijians who wish to become seafarers through an allocation of $100,000. A total of $500,000 has been allocated as a 50% partnership contribution for the government for the purchase of a boat and engine by individuals and community groups.
- Eligibility: This initiative will be made available on an equitable basis to maritime islands based on population size, their current fleet of fibre-glass boats, and other factors like willingness and ability to meet the remaining 50% of the cost of the vessels.

50% Waiver of the additional penalty charged on Traffic Infringement Notices (TIN)
- Eligibility: For personal motor vehicle infringements incurred from 15 July 2021 for unemployed Fijians. These are for basic infringements such as overspeeding, red-light traffic infringement and other infringements that do not involve illegal operations.
- How Does it Work?These individuals will be given a grace period from 1 August 2021 to 31 July 2022 to come forward and clear their principal TIN amounts.
- Why it Matters? This will significantly reduce the penalties for people who have so far been unable to pay their TINs. Pandemic or not, many Fijians still need to drive to shop or travel to a COVID-safe place of business, and fines and fees associated with driving can be an unbudgeted gut-punch for many unemployed Fijians awaiting the chance to work again.

Civil Service Pay and Hiring Freeze:
- No further salary cuts
  - Why It Matters? We are committed to making the civil service the premier employer of choice in Fiji. A good number of civil servants are working harder than ever to maintain the Government’s services, especially through this latest outbreak, and they should not and they will not see their salaries reduced further.
- Hiring Freeze Except Essential Ministry Needs:
  - Why it Matters? To save costs, hiring for new positions in the civil service have been frozen except for the ministries of Health and Medical Services, Communications, and Local Government as well as the Police.
- 6–month Review Mechanism/Conditional: Position about salary cut may change.
  - Why it Matters? This will be reviewed in the event Fiji’s borders do not reopen and the economy does not shown measured signs of revival.
  - We have gone more than a year without making serious cuts to salaries. However, that commitment does hinge on government revenues being restored within six months, and that depends on more of us being vaccinated.