Wednesday, January 16, 2008

Fiji Poor painfully pay the price

Tuesday, January 15, 2008

Where is Robin Hood now ... the increase in bus fare is set to cripple the poor again+ Enlarge this image

Where is Robin Hood now ... the increase in bus fare is set to cripple the poor again

As the 1999 general election drew nearer, political parties intensified their campaign. Subsequently, in a battle between two coalitions, it was the Fiji Labour Party led People's Coalition that included Party of National Unity and Fijian Association that triumphed with a resounding victory.

This stunning win was based upon the Labour Party led coalition's manifesto titled Strategies for a Better Future.

It focused on bread and butter issues like the $120 per week minimum or living wage, $150 per month allowance for the elderly.

Of course this was never fulfilled during the one year reign of Mahendra Chaudhry's coalition, although he had the opportunity to do so during the presentation of the 2000 Budget in November 1999.

On Page 14 of the same manifesto, Mr Chaudhry outlined his tax relief measures. He said the Labour Party led Coalition would reduce taxes and remove Value Added Tax from:

- Basic food items;

- Medical charges and supplies;

- Public transport; and

- Essential educational material.

Under the heading Adequate Social Welfare, the manifesto proclaimed that the poor, the needy and the disadvantaged in our society would be given adequate welfare support. And most importantly, Mr Chaudhry said relief for the poor and ordinary citizens would be a priority and claimed that under seven years of SVT misrule, cost of living had escalated and a third of the people were living in poverty.

On November 22, 2006, while replying to the 2007 Budget handed down by the then Finance Minister Ratu Jone Kubuabola in the SDL-Labour Multi-party government of Laisenia Qarase, Mr Chaudhry said in parliament:

"Budget 2007 was brought down against the backdrop of a mounting national crisis - political uncertainty, an ailing economy, over borrowing and burgeoning national deficit through government misrule and financial indiscipline; and increasing social hardship and suffering, with one-third of our people living in dire poverty. Yet I see little in these Budget proposals that would provide the impetus needed to spur economic recovery, restore investor confidence or alleviate social distress. Conversely, the increased taxation measures will actually hinder economic growth by stifling demand and fueling inflation. It will exacerbate poverty by forcing low income families to fork out more for basic essentials."

On November 23, 2007, Mr Chaudhry while delivering the 2008 Budget stated: "Government is conscious of the social distress of our people and inequalities besetting our society clearly evident from the fact that more than 50 per cent of our people struggle to live in dire poverty, or are at the brink of poverty."

Therefore, Mr Chaudhry in his own words admitted that poverty was not exacerbated by the SDL-Labour Multi-party government that was deposed in the coup of December 5, 2006, but by the interim regime in which he had served as Finance Minister for 11 months until then.

On November 22, 2006, Mr Chaudhry told Parliament that poverty was at 33 per cent or a third of the population.

One year later on November 23, 2007, he admitted it rose to about 50 per cent.

There was no Laisenia Qarase, no Ratu Jone Kubuabola, no SDL, no Parliament - but an interim regime in which he assumed the role of "Robin Hood", according to interim PM Frank Bainimarama.

However, in a Fiji Times advertisement on January 4, Mr Chaudhry once again claimed that the army had averted disaster by removing the Qarase led government and that in 2007 the State through prudent fiscal policies had saved $40 million.

Well done, but what are the savings for?

The cost of living is rising dramatically with sharp hikes in prices of food and other basic items despite being zero-rated (VAT exempted).

To make matters worse, the price of fuel is sky-rocketing and the 10 per cent increase in bus fares plus 50 cents increase in taxi fare flag fall rate will cripple the poor and working class.

And worse still, the salaries and wages of the working class have remained stagnant and in the case of civil servants, reduced by four per cent.

The call, therefore, by the Fiji Bus Operators Association for Mr Chaudhry to zero-rate bus fares or remove 12.5 per cent VAT makes sense. In a submission to Mr Chaudhry on January 3 this year, the bus operators suggested alternatives that would have made it unnecessary to increase bus fares.

The bus operators suggested the following:

- Remove VAT from bus fares;

- Restore the 20 cents per litre fuel grant provided by the Qarase government as subsidy to bus owners to carry elderly persons and the disabled on half bus fares;

- Reduce duty on spare parts; and

- Restore tyre rebates ranging between $25 and $50 per tyre.

The 20 cents fuel grant was reduced to 10 cents in March 2007.

It was reduced to five cents in the 2008 Budget. And concessions or rebates on bus tyres were withdrawn in the Budget.

A few days ago, Mr Chaudhry warned the bus operators that he would deregulate the transport industry if bus operators failed to carry the elderly and disabled on half fares. He said the 10 per cent fare increase was sufficient.

This essentially means the travelling public must pay increased bus fares to ensure the elderly and disabled travel at half price.

At the same time the interim Finance Ministry will continue to save taxpayers' money as much as $40 million in 2007.

But our rural children, particularly those whose parents are cane farmers, farm workers and vegetable farmers who are already struggling to put food on their tables, cannot send their children to school because they cannot afford this additional financial burden of a bus fare hike.

Can either Mr Chaudhry or bus operators confirm that a few days before the 2008 Budget was handed down, the interim Finance Minister was asked to restore the 20 cents per litre grant given by the deposed government for elderly and the disabled?

In that meeting Mr Chaudhry stated that World Bank policy dictated that concessions and grants be abolished and that government adopt a user-pay system.

Mr Chaudhry, who in the past criticised former governments for listening to World Bank and International Monetary Fund advice, has obviously changed his tune if this is correct.

Poor and developing countries rely heavily on grants and concessions.

Even developed economies like Australia and New Zealand give concessions and grants to their ordinary citizens. Lastly, apart from the $40 million that Mr Chaudhry brags about saving, what is he going to do with the revenue generated through increased duties from fuel being imported into the country?

The budgetary estimates for 2008 have already been done.

Will the revenue from duties imposed on the increasing price landing price of oil be also shown as a surplus to portray his miraculous economic policies while the poor continue getting kicked in their stomachs due to exorbitant prices of goods and charges levied on services?

This opinion is by Kamal Iyer a former journalist, who now works for the National Federation Party

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