Friday, November 26, 2010

Illegal AG Annouces Fiji 2011 National Budget

Sai's Comments:
  • When reading the illegal regime's Budget for 2011, keep their so called Economic Plan below in mind! 
  • What a joke it is!
 Their approved  ten point economic plan had the following specific targets to be achieved by 2020:

1. GDP to be increased two-fold;

2. Balance of Payments current account deficit to be eliminated;

3. Poverty to be reduced from current levels to less than 5per cent of population;

4. Visitor arrivals to increase to 6 million;

5. Financial sector to be liberalised with a view of eliminating exchange controls;

6. Fiji to grow its Communication Services sector business by 100per cent;

7. Fiji to achieve self sufficiency in rice, meat and liquid milk;

8. Fiji to convert up to 90per cent of all electricity generation from fossil to renewable sources;

9. Fiji to convert up to 80per cent of all arable land area into productive use; and

10. Fiji to reduce unemployment rate to less than 3per cent.

FBC News - 26 November 2010

Illegal Attorney General and Acting Minister for Finance Aiyaz Sayed-Khaiyum has delivered the 2011 Nation al Budget Address.

VAT has been raised from 12.5 to 15% as widely tipped to bolster falling revenue.

The 2011 budget has:
  •  a total revenue of $1.75 billion against;
  •  an expenditure of $1.96 billion;
  •  leaving a deficit of $216 million.
Compare this to the 2010 Budget which had:

  •  a total revenue of $1.49 billion against
  • an expenditure of $1.7billion ;
  • leaving a deficit of $200 plus million..
Capital expenditure has been set at $526 m with much of this also going towards the sugar industry.

On the much talked about $150 m bond debt that matures next year Sayed-Khaiyum announced that Singapore and Hong Kong-based brokers are acting on government’s behalf to refinance the bond.

"The US $150 m global bond raised in early 2006 is due for payment in September next year. Fund members based in Singapore and Hong Kong have been identified as government t international brokers to manage the refinancing of this global bond. Part of next year’s debt is expected to be financed through this global bond roll over. This strategy will release limited reserves in the domestic financial market for private sector investments and supplies."

On the sugar industry Sayed-Khaiyum reaffirmed government’s commitment saying 200,000 people or almost 20 per cent of Fiji citizens rely on the sector for their livelihood. He announced strict cost cutting measures and reforms for the Fiji Sugar Corporation and says government will work with development partners for technical assistance. The total allocation towards the sugar industry came to $123 m.

“An appropriate provision of a $110m has been allocated in the 2011 budget to support FSC - which will have an impact on the sugar industry as a whole. In addition $6m has been allocated for cane replanting, $1m for cane quality payment, $5m to South Pacific Fertilizers and $1.5m for the Committee for Better Utilization of Land, in total $123m has been allocated for the support of the sugar industry.”

On socio-economic and poverty alleviation issues – government announced a host of policies aimed at supporting the vulnerable in the community. This includes support to 10,000 new recipients of the family assistance scheme.
“In 2011we have allocated an addition of $3.6m to issue food vouchers of $30 a month to $10,000  new recipients. Within this schemes based on the means test - the elderly over 70 years of age who are currently not receiving any form of government assistance, pregnant mothers who are currently falling outside of the eligibility for receiving family assistance allowance and disadvantaged family and school children will be eligible. The Ministry of Strategic Planning will release final details of this scheme before Christmas.”

Government has also allocated $10 m housing assistance for first time home owners – a policy that was introduced last year but could not be implemented due to the effects of Cyclone Tomas and the Operation Kadivuka campaign.

A notable absence was the Governor of the Reserve Bank of Fiji Sada Reddy. FBC News was informed that Mr. Reddy is on leave.

Prime Minister Commodore Voreqe Bainimarama was on his way from Nadi to Suva when the budget address was delivered. Bainimarama has just returned from a two week trip to China, meeting industry and business leaders there.

Tough call on Budget - Fiji Times
by Elenoa Baselala
Friday, November 26, 2010

THE 2011 Budget would be presented to the public today at the Fiji Islands Revenue and Customs Authority complex in Nasese, Suva.

Last year, the 2010 Budget announcement revealed an:
  •  expenditure of $1.7billion, $1.32bn being operational costs while capital expenditures totalled $325.2m
  • government's revenue totalling $1.49billion largely comprised direct taxes totalling $424.6m and indirect taxes of $843.2m.

Expenditure was later revised in July due to the termite invasion in Lautoka as well as the damage caused by natural disasters. The revised budget totalled $1.71bn, with operational expenses totalling $1.28bn and capital expenses revised to $384.9m.

The Finance Minister and Prime Minister Commodore Voreqe Bainimarama had said that some of the recommendations of the International Monetary Fund would be considered by the Government in the 2011 Budget. One of the recommendations of the IMF include limiting the budget deficit to three per cent of the Gross Domestic Product (GDP) as well as the cost of restructuring the Fiji Sugar Corporation. This is to contain the increase in the debt to GDP ratio and reduce financing pressures. The central debt is currently 73 per cent of the GDP.

The other is to raise value added tax and excise taxes as immediate revenue measures to contain fiscal deficits and sustain public debt levels.

The IMF also recommended simplifying tax incentives and improving tax administration and reviewing the size of the civil service to contain the wage bill.

Reforms should also be accelerated to increase growth as well as macroeconomic stability. The IMF added that tariff adjustments to achieve cost recovery in public enterprises should also continue. It also recommended the removal of price controls.

Meanwhile, the budget will be announced under strict security conditions. Those in the lock-up session will not be able to carry any communication devices into the room to avoid leakage of information.

All those wanting to use the rest rooms would be escorted by police officers. The lock up session starts before the actual budget address. Participants access the budget estimates beforehand and are given time to do their analysis.

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