Fiji’s Prime Minister Sitiveni Rabuka says that the upcoming 2023-2024 budget, to be released tomorrow, will not be “business as usual” delivering core services to people but at the same time prioritising fiscal discipline through cost-cutting and revenue generation, potentially causing “pain for the people.”
Addressing the nation six months since the Coalition Government took office and hours away from releasing its inaugural budget Rabuka said the measures that will be implemented, some of which were highlighted by the Minister of Finance Professor Biman Prasad recently, are necessary to build on positive performances in some key sectors in the first half of the year, address the country’s debt, at 85% of the GDP, and ensure its financial stability, cushioning against future shocks in recognition of the impact of geopolitical uncertainties and climate risk.
“On a number of occasions, I have said that we will have to take some hard decisions and sacrifices that will not be pleasant but necessary for the common good,” Rabuka said. “As I have said, the primary objective of the Budget is to address the problems and challenges we face as a nation. It is not our intention, but this Budget may bring pain to some of you and your families. This is why I humbly request your understanding. It is critical and necessary that we must all come together to solve our problems, face the challenges, and rebuild our nation.”
Key initiatives of the budget include VAT simplification, controlled expenditure including in infrastructure, upgraded rural roads, increased social welfare for aged citizens, better healthcare, prioritised education, and enhanced skills training to fill gaps in response to worker migration.
“The 2023-2024 national budget has been prepared to consolidate government finances, minimise wastages, address our high debt level, allocate resources to priority sectors, and allow our people to have access to basic services. The budget will be people-centered, and adjustments will be made to ensure sustainable economic growth in the short and medium term.
“Therefore, in the immediate term, our fiscal deficit must remain close to 4% – preferably below 4%. Addressing our debt problem will require sacrifices – a painful structural reform of our social and economic system. The economy needs to switch from being consumption-driven to production to ensure private sector growth and development. This means every individual must work harder and smarter.”
The measures that will be implemented in the budget including a robust revenue collection he said will be guided through fair and simple reforms
“We are committed to transparency and genuine consultation with businesses and taxpayers. We want to make it easy for all our citizens to pay their fair share of taxes. These changes will be reflected in the new plan for FRCS and the new compliance improvement strategy. We will also make the best use of technology and analytical tools to enable compliance with tax laws.”
The new FRCS plan also entails policies that aim to address the country’s NCD crisis through reduced junk food intake and increased domestic food production. It will also offer incentives, targeting key growth sectors including new tax-free zones, and customs concessions to support economic growth.
The budget also includes initiatives to improve resource-based sectors that have remained subdued to ensure it effectively contributes to economic growth as have been some strong-performing sectors in the first half of the year, including the high level of remittances from friends and relatives abroad, that has played a significant role in boosting the economy and prompted growth projections revised upwards to 8%.
The 2023-2024 budget will be delivered at 10 am tomorrow in Suva.