Monday, July 10, 2017

Fiji Opposition Response to Expansionary and Electioneering FijiFirst Budget

Hon Aseri Radrodro gave the Opposition response to Budget

OFFICIAL OPPOSITION BUDGET RESPONSE BY HON. ASERI RADRODRO.
_______________
After much apprehension……and great expectations…..
Our national Budget was delivered with the fanfare we knew was coming.
It seemed the whole country was already talking about it.
People were predicting a flurry of activities this year.
Because next year is a special year!
The expectations turned out right.
Father Christmas came early this year.
So, no surprises there!
We have a budget of $4.35billion dollars. With a revenue of $3.85 billion, and an estimated net deficit of $499.5 million.
Madam Speaker, I take this opportunity to thank my colleagues particularly the Leader of Opposition, the Sodelpa Party Leadership and my fellow caucus members for their faith in delegating me this task to present our right of reply.
I also take this time to thank the Leader of the National Federation Party Dr Biman Prasad for his mammoth contribution in the last three years in responding to the Budget addresses on behalf of the Opposition.
We are much indebted!
Introduction
Madam Speaker, the budget debate always draws attention of all segments of our community because it affects them and this one is no exception.
For every stakeholder in this nation of ours, the budget plays an important role.
It is equally important to the every- day citizen whose food prices and bill costs is dictated by the policy of government.
And also important to civil society partners who get donor funding from government.
Or who rely on policy direction from government to assist them in the kind of programmes they can establish for the benefit of civil society.
It is important to the multi-billion dollar corporation and to the small canteen operators, whose profit margins and survival depend on government policy.
Madam Speaker whilst everyone looks forward to see how the budget announcement addresses their bread and butter issues, they are no longer illiterate to the requirements of a responsible government.
People, especially individuals now understand that for this government, budgets can remain just a beautiful plan.
They understand that those developments and hand outs have to be met from somewhere.
Our people in the rural areas are increasingly understanding that, whilst they appreciate receiving infrastructure development, it is the responsibility of every government to provide these amenities for them.
In fact, they are now asking, how government meets all these expenditures.
Where will the money come from? They ask!
They refuse to be held responsible for putting our future generations into debt.
These are the practical issues we need to “Free Fiji from”!
Our people prefer to see how government will empower them to be self reliant rather than depending on handouts.
They are intelligent.
We must give them credit for that.
They now demand to see how long term sustainable projects or programmes can be affected to ensure people’s futures are secure.
They will want to see guaranteed jobs.
No doubt Madam Speaker, they will embrace salary increments.
But they will be more concerned on whether they will still have a job next month, after their salary increase and bonus is received.
Already many are being threatened to sign their contracts or not receive any salary increments. How shameful!
Madam Speaker, our People are concerned on their ability to continue to live decent lives, which includes finding affordable accommodation, and putting decent meals on their dinner tables.
Madam Speaker there will be expectations with varied needs and priorities.
Madam Speaker, any government of the day has the responsibility to ensure equitable service provision for the nation.
And the maximization of government resources as these services or developments will be met by taxpayers.
This is not reflected in this budget.
However it will be interesting to see who will benefit the most from this budget.
Will all the people of Fiji embrace the budget or only a select few?
Madam Speaker, economists always argue that convention economies go through a “cyclical phase”.
As a layman, Madam Speaker, I see our economy like a roller coaster in slow motion.
There are periods of up-swing and times of down-turns.
The Reserve Bank of Fiji announced earlier last week that inflation has dropped.
This is due to the improvement in the supply of vegetables and rootcrops in our domestic market following TC Winston.
Government claims that we have recovered from the cyclone.
They attribute the supposed improvement in Fiji’s economic environment to their popular policies assuring a climate of stability.
We on this side of the House disagree.
We are of the view that a lot of people are weary to open resistance because government uses its hound dogs to keep people in check.
To echo Dr Vijay Naidu’s comments, government must also acknowledge that the Opposition has openly encouraged the maintaining of peace without confrontation.
We have preferred to dialogue and engage professionally in debates.
Madam Speaker, some burning issues that I will focus on today will include:
1. High debt level
2. Growth is not inclusive
3. Minimum wages increase
4. TELS Scholarships
5. Public service reform, and
6. Infrastructure Issues
And my colleagues will then delve into various sectoral allocations in detail.
Brief General Comments of Budget
Madam Speaker from the outset, we have some general comments to make of this 2017/18 budget.
Since the budget of 2015, this side of the House cannot help but comment on the inequity of the budget allocation.
It seems to favour the FF Government’s biggest beneficiaries.
An elite grouping of people who continue to earn the most, and enjoy the biggest slice of the economic pie.
They are mostly made up of Businesses, overseas contractors and consultants and those who have lent their support to the government of the day since that fateful day in 2006.
They have flourished overnight from openly courting the powers that be.
Sadly, everywhere we turn, this is the case, and there is no escaping that Fiji now has two divides.
Those that are known as either pro government, or anti government.
How they are treated clearly demarcates who they are.
Those who favour government would get jobs, and those who don’t agree with their draconian actions and policies, lose theirs.
We need…. to Free Fiji from this!!!
On that note, as political commentators usually say, this is a Budget for big businesses over battlers.
This Budget fails the test of fiscal responsibility.
It has failed to pursue the appropriate level of government spending and taxation which are necessary for sustainable public finances.
It fails to aid the optimal rate of economic growth despite huge government investments, subsidies and policies.
It has also failed to maintain appropriate levels of public investment.
Madam Speaker, the FF Government is collecting more tax than any other time in Fiji’s history.
They first hit the billion dollar mark in 2014. And have raised a consistent tax level since.
Yet they’ve added $5.2 Billion to Fiji’s national debt.
No other government has ever carried Fiji to a precarious level of indebtedness.
What this budget is trying to do, is make Government remain popular.
Subsequently, prudent financial policies that would otherwise be an attribute of a responsible government have been overlooked.
Madam Speaker, at a time of declining living standards… this Budget promises fewer jobs and lower growth.
It is not redistributive of wealth and income, and does not change the structure of society or move towards a more equitable and empowering one.
It is rather a desperate budget aimed at winning the hearts and minds of vulnerable people eager with promises of something better for their lives.
In reality, it is just a whole load of hogwash.
When we look at the Military budget of $175.9 million Madam Speaker, and contrast that with the productive sectors of Agriculture which got $86.3 million and the Ministry of Sugar which was allocated $60 million, the real picture of where the FF government priority lies, is clear.
This is a budget aimed at political survival.
More than ever, we must be honest about what our Budget can truly afford.
This is why we demand the FF government starts treating the Fijian people with respect.
They must be frank and upfront about their plans and not lead us based on ad hoc decisions based on the last person that whispers sweet nothings into their ears.
To turn around the lives of our people and bring back faith in our economy, we must bolster domestic growth, create more local jobs, increase foreign exports and entice value for money foreign investments into the economy.
Madam Speaker, the disappointing trend of the FF government in failed project implementation, now stands as a stark reminder.
The Waila City and 100 Sands Casino projects have all become nothing but events of grandstanding with nothing to show for it today.
[Sa vaka walega na titiro ena iloilo buwawa].
Madam Speaker, this budget simply makes family budgeting impossible to plan.
We need a budget that ensures we are building a stronger economy – without hurting the things that help it grow.
Madam Speaker I have to sound the warning that we may have a rigged economy.
One, in which we suspect figures have been inflated to project a positive outlook.
We should learn from the Asian Financial countries that experienced a recession because of such inflation of figures.
20 years later, they are still reeling from its effects.
Our Vulnerability Position
Madam Speaker, our economy is narrow based and dependant on few primary export commodities with price volatility.
It is driven by high consumption; a high importation of food; and high inflow of personal remittance.
With this kind of high expenditure budget, if we were to have another massive disaster the scale or bigger than TC Winston, do we have the ability to cope?
Madam Speaker, we must always be conservative in our approach of economic management and this budget again, is not reflective of that.
2017/18 Revenue and Expenditure
Madam Speaker, we cannot help but state that this budget is again another exercise of inflating revenue estimates.
This is nothing unusual from the past practice of this government.
Revenue collections have consistently been lower.
Madam Speaker in 2014, the actual revenue collected was $2.4 Billion against budget estimates of $2.7 Billion.
This is a shortfall of $300 million.
In 2016 Madam Speaker, the fiscal year for government was changed.
This has effectively distorted what I am sure would have been a continued decline in actual revenue collections.
Again this budget gives an estimate of $3.85 Billion.
Only time will tell the actual revenue we will collect.
On expenditure, if you look at the expenditure trend since 2012, our total expenditure has increased from F$1.96 billion to an estimate of F$4.29 billion.
This is an increase of over 100% in total expenditure.
Madam Speaker, it is interesting to note that the total expenditure is estimated to be around F$4.4 billion whilst an estimate of total revenue of F$3.9 billion.
Out of the total estimate, Capital Expenditure is estimated to be around F$1.8 billion and F$2.5 billion on Operating Expenditure with F$62.5 million of Value Added Tax and a Net Deficit of 4.5% of GDP.
Compared to the 2016/17 budget whose total expenditure was F$3.6 billion, this is an increase of F$800 million.
The total operating expenditure increase from F$2.138 billion to F$2.515 billion in 2017/18 budget, an increase of F$377 million.
Madam Speaker the 2015/16 budget estimate was $2.8 Billion whilst actual spending was $3.2 Billion.
This is an over expenditure of around F$400 million.
Madam Speaker the fiscal year for government changed in mid-2016.
I don’t recall the Minister of the Economy regularizing his over expenditure in this house as required under the 2013 Constitution.
Government must work within budgeted amounts allocated.
The message Madam Speaker is that, with such variation, both in revenue and expenditure, our deficit figures become totally distorted when comparisons are made on a 2015/16 period.
At that time, the fiscal year of government was still following the calendar year.
This is why Madam Speaker we are suggesting this budget is full of deception.
Debt Management.
Madam Speaker, we note that our average domestic debts hovers around 71.56% of GDP while the average foreign debt has increased from 23.4% to 31% of GDP.
We feel this is on the high end.
What is disconcerting Madam Speaker, is that debt repayment takes first priority as required under the constitution.
Why it is that government is borrowing at higher interest rates from banks like the Bank of Malaysia Madam Speaker?
A lot of off shore banks like the World Bank offer lower interest rates of around 2%.
Is this because Fiji is not complying to the loan conditions set by these banks offering lower interest rates?
Conditions that require guaranteed media freedom and free speech, prudent financial management, human rights protection and etcetera.
And why is it that government continues to borrow when it is showing a government savings over the period including $896m in this budget year?
Are we the taxpayers being overtaxed?
What is government’s fixation on this?
Inflation
Madam Speaker, on inflation, the budget suggests that our average inflation rate will be hovering around 3% at the end of 2017.
The information provided by the RBF suggests that the surge in inflation is due to the increase in price of vegetables; yaqona; food and non-alcoholic beverages; alcoholic beverages; tobacco and narcotics; education and other domestic items.
This trend is quite alarming.
With a bullish budget of high expenditure this will surely push inflation further if not properly managed.
Liquidity
Madam Speaker, it is interesting to note that the liquidity in our banking system continue to increase.
The RBF report in May 2017 indicates that our liquidity is hovering around F$735.8m.
Again in June, it is sad to increase further and the current indicator suggests that it will continue to rise.
Whilst liquidity is increasing, the weighted average lending rate has declined to 5.8%.
The question is Madam Speaker, despite the low interest rate, why are people not borrowing??
Madam Speaker, with the kind of inconsistent policies this budget presents, it is no wonder, investors will have less confidence in investing in our economy.
One classic example of such inconsistencies is the water resource tax which is expected to collect $70 million revenue.
These expected revenue collection will surpasses all other sectors including Tourism, and becomes very discriminatory.
No wonder there is less borrowing. Perhaps Investors are going elsewhere where the business environment is more supportive.
Similarly, investment of residential homes by civil servants may be an issue in the future, now that they are only given contractual terms which is far much lesser that the normal housing loan terms, of 20 years.
Taxation
Madam Speaker on the issue of taxation, it is common knowledge that the bulk of government revenue is derived through taxation.
All developments are paid through tax collected from ordinary citizens and businesses, and in this respect, we commend that government has introduced the new $30,000 taxation bracket which is a sizeable increase from the previous bracket of $16,000.
We are happy for them, and believe it would assist mitigate increasing high cost of living which this budget has failed to address.
Madam Speaker, it seems the 2017/18 budget is in an accommodative mood.
Government needs votes for next year and the revision of taxation bracket is intended to help them get those votes.
But the sad reality is, they are deceiving the rest of our people who make up the majority of our workforce, and who are our ordinary farmers, our road side vendors, our casual workers, our taxi drivers, our house maids, and etcetera.
How do they benefit?
How do they adjust to the continued high cost of living?
Madam Speaker, the reduction in the tax bracket has repercussions on our revenue.
This will mean a loss of about $26 million on average in revenue collection.
How does government intend to replace that loss which our economy badly needs to carry out developments and ensure service provisions?
I will talk on some proposed revenue amendments and lines as highlighted by the budget:
Madam Speaker on the capital gain tax, on average we collect around F$24.8m on capital gain tax in the last 3 years.
It is estimated that in 20178/18 budget, we are going to collect F$29.8 million.
This is much lower than the original announcement made by the Minister of Economy that we will earn more than F$50m annually from capital gain tax.
Madam Speaker, this may be an indication that this capital gain tax is not working thus discouraging investment – say to home owners for eg.
Madam Speaker, it is also noted that on time bound prosecution on tax offences, this will be amended under the new tax law to remove the 7 years time limit.
Madam Speaker, it is by convention that the barred period is normally be seven years.
The Honorable Minister for Economy needs to explain to this House the rationale behind this.
Is it consistent with other existing legislations?
On the 10cents plastic bag tax, Madam Speaker, I appreciate the rationale that we all need to minimize the use of non-degradable plastic in the country.
Is this the best way in addressing the issue, how can we implement this tax efficiently and how will the collections of this revenue be administered from POS.
On Fridge benefit tax, in particular health insurance provided by employers,
It seems this exception is to re-encourage employers who provided covers for their employees through medical to again do so.
We know that employees will jump at this and it’s obviously a naked attempt at gaining popularity because many employees in government run institutions had these benefits removed just a few years ago.
How sad though for those that have since left employment, and now miss out on this opportunity.
On the new tax machines that FIRCA will soon introduce into supermarkets.
Why is government jumping the gun on this and has not tried to pilot the project for trial run first?
Such expensive ventures will no doubt have teething problems just as we note in the bus e-ticketing program.
We truly need to get our act together when we are dealing with mechanized technologies Madam Speaker.
Government is going to continue to lose time and money, not to mention becoming the brunt of jokes if systems are not corrected first prior to jumping into projects.
They say the love of money is the root of all evil Madam Speaker and can make even the wisest person vulnerable because of greed.
So slow down and get the ground work tested first before you make grand pronouncements.
On the issue of tax amnesty; why is government continuing to extend tax amnesty?
Government should have closed it and moved on or prosecute tax evaders.
The question that arises, is for whose benefit is the amnesty for when it is continuously extended?
It will be crucial for the Honorable Minister for Economy to put a sunset to this amnesty.
On Bus concessions; Madam Speaker, we respect governments continued assistance over the years to the industry.
We note that in this budget they again have been allocated $20 million in free bus fare grant.
Likewise many of us will recall that just a few years back, the bus fare stages were adjusted resulting in substantial increases in bus fares.
It’s evident now how much assistance bus companies have been receiving when they have been able to re-fleet their companies with new beautiful busses.
But please Madam Speaker, we have to direct the same assistance to other transport modes in particular to inter island franchise services serving uneconomical routes.
Already shipping fares are controlled by Commerce Commission.
It would be only fair that the companies engaged in this service currently struggling to do so, be assisted to have zero rating on VAT, and be given fuel concessions likewise.
They should also have their franchise doubled or even tripled to assist them meet their operational costs.
Madam Speaker, there has to be meaningful and equitable assistance to all our stakeholders.
Especially when taxpayers are footing all these bills in the form of concessions or subsidies and grants given out to respective industries.
Madam Speaker, the uneconomical routes covered under the shipping franchise service cater for people who live in the fringes of society and who are almost always forgotten.
The franchise payments being received from government and paid on a periodic basis does very little to assist in the cashflow for vessel owners.
Lastly on taxation issues, government has now given additional powers to tax officials to conduct raids through search warrants.
It seems the tax office has been given the freedom to become draconian just as FICAC and other similar entities created by this government is now a source of fear for many.
Madam Speaker does governments enjoy operating in a climate of fear mongering?
If the reason for these raids is tax compliance, then the way to go about it is to build meaningful lasting relationships with businesses based on trust.
Not unwarranted threats.
These kinds of attitude drive away investors not to mention creating an unstable environment for business growth.
Madam Speaker, when Sodelpa is in government, we will ensure we treat everyone equally and such vindictive and selective actions will never be condoned.
Investment
Madam Speaker, briefly on investment, although government is boasting about the increasing registration figures, we would like to request government on the success rate of the actual implementation of this investments.
We also noted that the allocation given to Investment Fiji is around $2.6 million and last year they engaged in a couple of trade missions.
The question is how many business opportunities and partnerships have been secured through these trade missions resulting in business exports?
Effect of TC Winston
Madam Speaker, we understand that more than 50% of our population were affected by TC Winston when it struck Fiji in 2016.
It is almost two years now and those affected have not fully recovered.
Based on the Governments Post Disaster Report prepared with UNDP a, total of 540,414 people were directly affected.
Today, Madam Speaker most of these people affected are still living in tents and education facilities have not been fully improved.
Madam Speaker, whilst the victims of TCW are still suffering, we question government why they are placing a priority on marketing Fiji abroad with an increased budget allocation, and not tend to our own backyard first.
The sheer arrogance and ignorance of the FF government Madam Speaker lies bare for the world to see.
They are gallivanting around the world to champion climate change, yet our own victims still struggle to make ends meet.
Tourism
Madam Speaker, Tourism is one of Fiji’s main GDP contributors and is also one of the backbones of our economy.
But it is a volatile industry which is susceptible to external and internal shocks like natural disasters, political instability, and global financial meltdowns.
It is an industry that must be protected and cushioned as much as possible.
Madam Speaker, I know my colleague will further elaborate on the taxes this industry now has to bear and its encompassing environment of challenges.
But, I just want to briefly highlight the plight of backpacker closures which has been brought to my attention by aggrieved locals who have lost their jobs and business as a result.
Madam Speaker, we understand that from the 42 backpackers opened in Yasawa’s under the SDL government start up assistance for local business participation, only 12 remain open today.
The tax office has effectively closed down the rest of the 30.
To name a few of the backpackers that have also been forced to close recently are the
• Coconut Bay resort in Naviti,
• Otto and Family in Tavewa owned by locals who have been forced to sell to Americans,
• David’s place in Tavewa which was the first backpacker in Northern Yasawa
Madam speaker we need to be supporting our local entrepreneurs.
They contribute immensely to our economy through foreign earnings and much needed employment opportunities for our people.
The Opposition has always pressed for an equitable share of the government assistance for all our people and in this respect.
We urge government to consider assisting our backpackers with grants just as they have done to sugar.
A Sodelpa government Madam Speaker is going to review all these support incentives and business assistance policies.
We will ensure the equal participation in business of all communities and not just a select few.
Basic Minimum Wage
Madam Speaker, democracy is an amazing venture.
It enables anyone who feels they can contribute to nation building to get into the House of Representatives, or Parliament.
As a result, over the years we have had a mixture of representatives.
We have had Accountants, lawyers, businessmen, teachers, doctors, and soldiers as well as farmers representing our people.
I don’t mean to be condescending, but we accept that not everyone is professionally qualified.
Sometimes, qualifications in fact do not matter when we have experienced people who have the passion to serve or work.
History has proven that some of our best contributors are these unskilled people.
On the increase of basic minimum wage by 36 cents from $2.32 to $2.68, this is simply hypocrisy of the FFP government when we draw an analogy on equality.
Particularly when we imagine what our Cabinet, who has some farmers amongst them, pays itself.
They earn high salaries of around $36 an hour on average against the new proposed $2.68 an hour for wage earners.
Just a side comment, even with that hourly rate, members of that side of the House did not even contribute to the TC Winston appeal unlike this side of the House.
Madam Speaker the question is; how much difference will an additional 36 cents an hour make in an unskilled workers life?
With this increase, they are after-all going home with just over $100 a week in take home pay.
When you talk about empowerment of people, you don’t empower workers by paying them $2.68 an hour.
That’s just token empowerment, not real terms.
Public Service Reform
Madam Speaker, I would now like to address the public service salary increments as offered by the Budget announcement.
This is a very important component of the whole package of Public Sector Reform.
Despite the claim by the FFP government of the successful implementation of public service reforms, the recent major increases in staff remunerations indicates the reforms concept for maximum accountability and productivity has been shelved in this Budget.
Taking its place is politics of desperation.
Civil servants have over recent years been exposed to bullying, high amount of non-renewal of contracts, unfair promotions, nepotism, and favoritism to name a few.
These actions by government have led to an overall environment of mistrust for government.
But Madam Speaker, let me not be a party pooper though.
Any salary increases overall must be commended when it’s long overdue.
After all, in civil service life, they work on a sense of patriotism and pride.
Their comparative salaries are often less than that earned by the private sector.
Civil servants have the institutional memory of the service which is a crucial part of government servitude.
They are the ones that have a sense of responsibility unlike fly by night expatriate workers, and favored civil servants who have recently ascended to positions of authority.
Civil servants deserve to be remunerated appropriately.
We also commend that the nurses are finally getting some well-deserved raise which our side of the house have raised consistently through this House in the last three years.
We applaud as well the increments announced for the Fiji Police, Teachers and generally most civil servants.
We note that government is now implementing 15 new salary bands to replace the 31 occupational scales of all jobs in the civil service.
Government has categorized them into three trenches with civil servants now being coaxed into moving into these bands from July, August and September of this year.
For the Ministry of Infrastructure, I have been informed that staffs were offered to sign their contracts last Thursday.
But most of them have not done so, as they felt the announcement of 15.8% increment for civil servants in the common cadre band for example during the budget was deceptive.
If we take for example, a person sitting on just over $19,000, with the salary increase of 15.8%, they should have gone to a little over $22,000, but in reality, they have been offered just a little over $20,000.
That’s quite disappointing for staffs Madam Speaker.
There are so many examples of similar distortions.
Clerical officers in the same Ministry, sitting at a band of $12,679, after these salary adjustments have moved up to $14,095.
But the confusing issue is that those sitting on salaries of $13,191 move up to the same level of $14,095.
Instead they should have received $$14,682 and $15,275.00 respectively.
Madam Speaker, such grand pronouncements, has nothing real to show for it.
Just more deception by the FF government!
I mean, a $10.4 million allocation has been allocated for Salary Adjustments Madam Speaker!
This is to accommodate these increments being given to the whole of the civil service. How can that be?
It will certainly cost more than that.
So what happens to the balance of what is needed?
Will some have to lose their jobs further to accommodate the increase for others Madam Speaker?
Is that why contracts are being re-advertised so people naturally are weaned off?
Just last week Madam Speaker we noted that in another Ministry, a memo that came out is now forcing its staffs to sign their contracts or lose out on the new salary bands that come with a pay increase.
This is not only draconian but is intimidation and against general labor laws.
In the Ministry of Justice, their contracts have been offered for just one year.
What’s with the inconsistency Madam Speaker?
You do not enforce your will on your human capital.
You negotiate reasonable conditions of a contract that does not victimize workers and you get their buy in.
This is what a Sodelpa government would have done. That is what we will do!
Madam Speaker, whatever government does, is often reflected in government funded institutions.
Madam Speaker, FNU affected increments a fortnight ago.
Government had allocated a grant of $9 million for this exercise after evidence based evaluation by Price Waterhouse Coopers.
Following the JE, almost 1/3 or 700 staffs got no increment; whilst only 2/3 get to share the $12 million budget.
FNU provided $3 million to complement the grant of $9 million.
Staffs of the FNU I understand were very hurt and frustrated when some people got to enjoy thousands in back pay whilst many others got nothing at all.
Like I said, we get to look up to government for guidance and if they are messing up contracts for workers, you can imagine where the private sector and government funded or assisted institutions will start taking their cue from.
In this 2017/2018 Budget Madam Speaker, $56.1 million has been allocated to FNU, and $30.1 million to USP, University of Fiji has been allocated $3.4 million.
This is tax payer’s money Madam Speaker and requires accountability and transparency.
So we strongly urge that the government auditors [Auditor General’s office] also be allowed to audit how these grants are utilized in these Institutions.
The double standards occurring in these tertiary institutions are questionable.
It’s like a cartel for some.
One University of the South Pacific, Director, Head of School and a many with so many roles has recently got USP staffs to pay for rental increase despite the rental freeze by government.
If the argument is that it is a regional institute so the Fiji law does not apply to them, this cannot be allowed.
This is the host country and the laws of this country are applicable to those that work here unless they are on diplomatic immunity.
A Sodelpa government will never allow such practices to thrive.
We will conduct a performance audit in these institutions’ to ensure optimal value for money and fairness for our children’s education and the staff’s welfare.
Madam Speaker, tax payers of this nation continue to fund commercial institutions like Fiji Airways. They continue to receive an allocation of $18 million.
Also Public Service Broadcast, with an allocation of $11 million.
Despite not bringing their annual reports to this House Madam Speaker, they still receive these funding.
Why? Where is the transparency?
Back to reforms in general, Madam Speaker, being championed by government.
You will agree with me that the public service reform also being conducted through PWC and Strategic Pay NZ has to be about efficiency and effectiveness.
It has to be focused on service delivery based on merit and at a reasonable cost.
As long as the distortion experienced by FNU and becoming prevalent in the civil service reforms now, it is checked.
Someone has to authenticate the work of this so called reform agents Madam Speaker, and not just take their word for it.
On that note I urge our government leaders to refrain from interfering in the day to day running of Ministries and entities.
Whilst we appreciate that the role of Ministers to interfere and oversight into daily operations of workers is now in the 2013 Constitution.
We will caution that generally such actions are not advisable.
The democratic principle of separation of powers is advocated strongly to ensure the non-politicization of government service delivery.
Madam Speaker, a SODELPA government is going to do away with the current contractual system of government.
We will reintroduce our policy of permanent status up-to 60 years for all civil servants.
And we will ensure our investment sectors are supported and grown to accommodate employment opportunities for our younger graduates.
There is so much opportunity in this country to be realized, but the restrictive climate of fear is what is holding us back.
We must Free Fiji again.
Social Welfare
Madam Speaker, every month end, more than 54,000 of our people redeem their personal dignity and cue up at various outlets around the country.
They do so to access their social welfare assistance, whether for child protection allowance, social pension scheme, food voucher or poverty benefit.
The increase in their allowances is acknowledged as much needed.
But Madam Speaker, not many of our people should forgo their dignity for such assistance.
This is the social cost we have to experience because of the forced 55 years retirement age directed by the Fiji First government for example.
This is also because of the drastic and illegal changes to the FNPF pension scheme.
The numbers do not have to be so high.
It will be a wonder for government to investigate how many of our former civil servants are on these social pensions Madam Speaker.
People who have been robbed of their dignity because of the unfair policies suddenly forced upon them.
The social breakdown signs of our nation are evident when we have about 75% of our youths make up the number of total prisoners in goals around the country.
This is close to about 1,700 of our youths Madam Speaker, languishing away in prison at the prime of their lives.
Majority of them I-Taukei!
Why is prison the first option in our justice system?
Are we about rehabilitating offenders or simply punishing them and creating a cycle of re-offending?
Sugar Industry
Madam Speaker, the budget for sugar has been doubled from $27 million to $60 million.
Perhaps this increase comes at the back of increased displeasure by farmers especially those with sentimental ties to the industry.
Those who expressed concerns and anger at the close of the Rarawai Mill.
We all agree Madam Speaker that more than 200,000 of our population depend on the sugar industry for livelihood.
I think it is important Madam Speaker that the people of Fiji should know the truth on how the industry has evolve in the last decade and why we continue to fail today.
Madam Speaker, the loss of preferential price had been on the table for at least the last 20 years.
The previous government fully recognized the severity in the loss of the preferential price agreement with the European Union.
Therefore, the SDL Government through the visionary leadership of Qarase did consultation with all stakeholders including civil society organizations.
They initiated programs to ensure the industry continues to be competitive and relevant after the expiry of the preferential price agreement.
A well thought out package and systemic approach was put into place to minimize the risk and the adjustment that needed to be implemented.
First Madam Speaker was the alternative livelihood project with the total cost of $104.38m which was supported by the Asian Development Bank.
The bank agreed to pay 93% ($31.4) and the balance is shared among all the stakeholders.
To complement this loan, the EU provided Fiji $350m grant to support its adaptation strategies which was aligned to the alternative livelihood program.
In addition Madam Speaker, export strategies was also developed and the revitalization of the sugar industry was given priority.
It was agreed for an annual allocation to be determined based on the gap and need.
To complement the alternative livelihood program Madam Speaker, the Rural and Outer Island (ROI) project was also developed and approved in 2005.
This was for a 5 years period costing around $229.1m to support the diversification away from the sugar industry with a multi sectorial approach (Livelihood development and infrastructure).
Out of this total amount, $34m was allocated for rural infrastructure alone.
All these efforts Madam Speaker were thrown out the window by the Bainimarama government.
The alternative livelihood project was cancelled and the ROI project was shelved.
Instead the Bainimarama government engaged Deloitte at the cost of $1m to prepare a restructuring program of the sugar industry.
Recommendations by Deloitte were much similar to the alternative livelihood project which was implemented on piece mill basis.
Madam Speaker on that note, we cannot overlook Government’s injection of over $400m into the FSC in the last 10years.
Out of this amount, $240m was spent on cane growers.
The result Madam Speaker is appalling.
Despite the substantial injection to the industry, the performance of the industry continues to decline.
In 2006, Madam Speaker, we had 18,636 active growers compared to only 12,872 in 2016 and this trend will continue.
In terms of cane crushed, it has decline from 1.38m tons in 2016 compared to 3.226m tons in 2006.
In terms of sugar production Madam Speaker, it declined from 310,140tons in 2006 to 139,502tons in 2016.
Who is to be blamed here Madam Speaker?
Madam Speaker, earlier this year, the leader of the National Federation Party put forth a motion in this august house.
It recommended a bipartisan approach to address the declining performance of our sugar industry, but sadly this was rejected by government.
Problems and challenges faced by the sugar industry today Madam Speaker was not caused by the previous government.
It is directly due to the lack of direction and vision on the FF Government who should have taken a more holistic approach through dialogue and consultation with those stakeholders who know the industry better than them.
Non-Sugar Agriculture
Madam Speaker, there is no doubt that the contribution of the agricultural sector to GDP continues to decline while other sectors are emerging.
Agricultures contribution had decline from 15% in 2005 to only around 6% today.
However, it will continue to be a major back bone of our economy.
And remain very important for food security, acting as a safety net and buffer for majority of our population Madam Speaker.
Whilst there is a rapid decline in the contribution of the sugar industry in the economy, non-sugar agriculture continues to increase.
It continues to provide employment opportunities, foreign exchange earnings and remains a constant reliable source of survival for us all.
But the budget allocation given for it does not reflect this compared to the injection in the sugar industry.
We note that whilst the allocation for the sugar industry is mostly capital grant and has continued to increase.
The allocation for non-sugar however has remained flat for the last three years.
This year for example, this crucial sector only received a mere increase of about a little over $9 million from its budget of $74 million last year.
This is another example of lip service to the non-sugar agriculture despite the fact that 70% of employment is provided by non-sugar sector in our rural areas.
It becomes questionable when important products like Cocoa, vanilla, dalo, ginger, yaqona that can be alternative crops to sugarcane, have been granted a measly $12.3 million.
Government needs to secure importers and markets for non-sugar products at a volume that will ensure growth and sustainability.
Government has a responsibility to offer incentives and assistance packages for genuine participation in this industry.
Government needs to make available necessary capital to boost participation in this sector.
Madam Speaker, when subsidies provided are not equitable for respective sectors, it can suggest bias on the part of decision makers.
Following TC Winston for example, dalo, ginger, cocoa, yaqona, kumala and other cash crops equally faced damages on their farms.
They did not receive the kind of assistance and subsidies or loan write offs as sugar cane farmers received.
Why couldn’t the fertilizer subsidy be also extended to other farmers in general?
Why a discriminatory policy?
We assure you Madam Speaker that a Sodelpa government is going to provide equal assistance and equitable subsidies to all sectors and products and not just a select few.
Madam Speaker, another issue that government has failed to address is the inconsistency in price of alternative crops like dalo, cocoa, yaqona and ginger, kumala for example.
These crops will continue to face challenges with farmers often being disillusioned because the prices of these products continue to fall without warning and are not set by government to cushion fluctuation in market prices.
For example, on good days, price of dalo is $5 per kg.
On bad days, it fetches a price of $1.20 only per kg.
Government has not seen it fit to provide non sugar farmers with a set product price that is attractive enough to encourage more sustainable commercial farmers.
Sugarcane has a set price by government.
Madam Speaker, I also wish to speak briefly on the issue of agricultural road accesses.
As stated earlier, despite this sector employing 70% of our rural workers.
Road access provision in the budget received only $2.5 million whilst sugar cane access roads got twice what was allocated last year amounting to $6million.
You cannot expect improvement when what farmers used to experience 30 years ago, is still experienced today.
There has to be equity Madam Speaker in the allocation of government resources.
All taxpayers equally, fund government’s coffers.
Government is fond of bragging that their policies will not leave any Fijian behind.
They must walk the talk and not just provide lip service.
If the 2017/18 Ministry of Sugar budget got over 100% increase, give the same to non-sugar.
Dairy
Madam Speaker, let me also point out that in the non-sugar industry, we also have our dairy farmers.
Madam Speaker, this industry needs to be reflected in this Budget as a key area, but it is not.
The 2017/18 budget allocation for dairy development received only $800,000.
Our dairy farmers have been receiving a gate price of around 80 cents per litre of milk.
And the high handed requirements now mandated by Milk Chilling Centres are causing a loss to many dairy farmers.
Their milk gets turned away with no proper explanations.
This is an industry with sentimental value to many.
Treat them like the important economic contributors they are.
Madam Speaker, I would like to give a brief history of some concessionary measure given to this industry so that it gives us an idea of where we are.
Madam Speaker in 2012, the import duty regime on dairy imports were as follows:
15% import duty on imports by resellers of milk powder,
7.7% (concessionary) import duty on imports by approved re-packers of milk powder (under Code 260 of Tariff Act) Butter, Ghee, UHT Milk (Life) and other dairy products all had 15% import duty.
Rewa Dairy Co-operative paid 0% import duty to protect the Dairy Industry.
It should be noted that the differential of duty rates between Rewa’s 0% rated duty was necessary to boost its production at the time.
It should also be noted that the total market for dairy in Fiji was 75 million litres of milk, and local production was 13million litres.
The difference is imported.
From November 2012 Madam Speaker, as per the Budget announcement for 2013, those above import duties were raised to 32% after 80% of Rewa Dairy Co-operative was sold to Southern Cross Foods (a subsidiary of C.J.Patel), company being called Fiji Dairy Limited.
The other 20% of Fiji Dairy Limited remained with Rewa Dairy Co-operative.
Some questions to determine will include the conditions of agreement between Southern Cross Foods and Fiji Dairy?
Also, how much commission on sales are charged by Southern Cross?
And how much management fees is charged by Southern Cross Foods to Fiji Dairy as marketing fees?
And how much dividend has been paid to Rewa Co-operative todate?
No one knows these issues Madam Speaker unless the Agreement is tabled for the sake of transparency.
An urgent audit also needs to be carried out to determine this very suspicious arrangement Madam Speaker!
It should be noted that in the 2009 Budget announcement stated that the duty concessions to Rewa Dairy Co-operative will phase out in 2 years!!
What happened? That was supposed to occur in 2011 if we have to believe in what was announced.
So who is favouring who?
Since Fiji Dairy was formed in 2012 and controlled by Southern Cross Foods, local production of milk has dropped from 13m Litres to less than 8m Litres.
It seems FDL is more interested in importing milk powder, UHT milk, butter etc. and reselling them instead of investing in practices to increase local production of fresh when they acquired 80% of Fiji Dairy.
Currently all importers of milk powder, UHT milk and butter are subject to stringent price control by the Fijian Commerce Commission whilst Fiji Dairy is exempt from wholesale price control.
This is day light robbery Madam Speaker!
It is protectionism but unwarranted because the entities involved are not totally all state owned.
Why does Fiji Dairy Limited have to specially benefit from continued concessions?
Madam Speaker, with the inflated price of dairy products in retail outlets, these profits need to trickle down to the farmers.
Madam Speaker, it would be fair for government to consider giving dairy farmers an increase in milk gate price of at least $1.50/ liter.
Imagine Madam Speaker, this nation is being held to ransom by a commercially owned private company at the expense of consumers and hardworking dairy farmers.
How sick!
Infrastructure & Transport
I will focus a little Madam Speaker on my other shadow portfolio which is Infrastructure and Transport.
FRA
On Fiji Roads Authority, Madam Speaker,we could not ignore easily the quiet and fast exit of the CEO of FRA recently.
It’s laughable when three years ago in this very house, I had highlighted that these expatriate consultants were chewing up a good chunk of the FRA budget and their assumption of responsibility was always going to be questionable.
FRA continues to receive big budget allocations and this year is no different, with $527 million.
What is of concern, is that a similar amount was captured as their allocation in the 2016/17 budget which was later revised to $461 million in the $2017/2018 budget book.
Madam Speaker, I’ve already stated earlier, that this government has a habit of making grand pronouncements, when in reality it’s a different story.
No wonder, our roads are in deplorable condition, and development is concentrated where the eyes can see daily.
Sadly for most of our people who still have broken bridges and damaged roads, the out of sight and out of mind platform is obviously at play.
There is an urgent need to review the current outsourcing arrangements in FRA & conduct a value for money audit of the entity.
What SODELPA will Offer;
With a Sodelpa government we will do away with the outsourcing arrangements currently practiced by FRA who use re-contracting through third party contracts to carry out works.
We will heightened the training of our locals to better manage our r


CLICK TO READ THE FIJI VILLAGE NEWS REPORT


No comments: