The Fiji Times »Putting People First – Unity’s Alternative Budget for 2022
I present the Alternative Unity Budget 2022 at a very dangerous time in our lives. Never before have we lived in great fear of contracting the deadly virus and even death. Daily cases are now close to 800. Deaths are increasing rapidly. With our small population, the whole country is at risk of being destroyed by the virus.
The virus is out of control and more and more lives will be lost. The saddest thing for me is that this loss of life could have been avoided. I have said it and I will say it again, our fight is not so much against the virus, but against the ego and the pride of this government.
Alternative Unit Budget 2022
Inspired by the spirit of unity and what I believe to be the will of God, Alternative Unity Budget 2022 presents the country with a credible plan to help us through this crisis.
If a government puts people first, then it must listen to the people.
The theme of our 2022 Alternative Unit Budget is “Put People First” – not profits, not just cohorts, not just close friends, not just one race, but all people of all races, all races. religions and all places.
Budgeting is about financial resources. Unfortunately, the financial resources are what this government does not have. When we don’t have the money, we have to be innovative and focus heavily on a few immediate priorities.
Unit budget pillars
The Alternative Unity Budget 2022 reorganizes our priorities. We need to highlight the need to stop the virus and support livelihoods.
Our first pillar is therefore to stop the virus: We clearly recognize that this is a health crisis, and our first priority must be to stop the virus as quickly as possible. A protracted economic crisis will hurt everyone.
Our second pillar is to increase aid to the people. Unfortunately, the help provided by the government is symbolic. This budget brings cash and food assistance to our people to $ 600 million.
Our third pillar is to support resource-based industries and small businesses: Unity Fiji stressed that we must look within for immediate solutions for the economy.
This 2022 alternative unit budget provides $ 100 million to revive our resource-based sectors. At the same time, the budget allocates $ 100 million to help small businesses.
Our fourth pillar is to adequately finance our priorities in the first three pillars: The government is already facing a debt crisis and it is essential that its borrowing be moderate.
The 2021 alternative budget of the unit will focus on re-prioritizing spending away from non-essential and unnecessary spending to provide adequate assistance to the population and stop the virus.
Our final pillar is to stabilize our fiscal situation: Fiji is facing a financial crisis unprecedented in our history. We must prevent the country from falling from the financial pit, which will aggravate our suffering.
The Alternative Unity Budget 2022 begins the long journey of stabilizing public finances by halving the deficit from the level budgeted for this year.
Economic growth and projection
The economy shrank 2% in 2019 and collapsed 19% last year. We can say goodbye to the Bula bubble or any bubble for that matter. We expect the economy to shrink another 5% this year. It will take seven years or more to get back to where we were in 2018.
It is estimated that $ 3 billion has disappeared from the economy. We need to put some of this money back in our pockets to revive demand that will benefit everyone, people, businesses and government.
The government made a lot of bad judgments which contributed to the precarious situation we now face.
Eggs in a basket
The first bad judgment puts all its eggs in one basket. If you look at the performance of sugar, timber, gold, and peach in the budget documents, they are dismal.
There are other crops like dalo and cassava that have higher yields than sugar cane and deserve to be supported. This budget provides $ 100 million in assistance to this important sector.
Poor access to credit
The second mismanagement of this government is its hypocritical position on private sector development.
Fiji’s ranking in the World Bank’s Ease of Doing Business index fell from the top 50 in 2006 to 102 last year.
Fiji’s credit rating has deteriorated from 79th in 2015 to 165th last year. Only twenty countries in the world are worse than us.
Surprisingly, the interest rate differential is widening, implying that banks are protecting their bottom line while the whole country suffers.
I therefore ask the Reserve Bank of Fiji to undertake an in-depth study of why Fiji is poorly ranked in access to credit.
Private sector confidence is low, not only because of the COVID crisis. It has been low for a long time due to the heaviness of government in the private sector.
This divide and conquer that the government has exercised in the private sector creates uncertainty and discourages investment.
This budget proposes to help businesses’ cash flow by freeing over $ 100 million in unpaid VAT returns.
We are also asking for more transparency in the tendering process where the Minister is required to publish all exceptions to the rules of the tendering process.
Poor tax management
The great weakness of this government is that it thinks that money grows on trees. The government believed that spending was the solution to all of our problems. They have embarked on a spending spree.
To make matters worse, the government has spent most of the money in the wrong places. In addition, to improve the appearance of the budget each year, the government has inflated its revenues at budget time.
This serious financial mismanagement has led us to the mess we are facing today.
This Alternative Unit Budget corrects these budget errors by eliminating waste, setting the right priorities and reducing the deficit.
Right now the country needs a stable pair of hands and an experienced leader to guide us carefully through these rough seas to calmer waters. Cutting spending because of our debt level is not smart. Giving income when we desperately need funds is not smart.
So this budget proposes to do two things. First, the government must reallocate spending from non-core areas to immediate priorities. Second, the government must reallocate savings to fund priority areas.
We have identified savings of $ 1.1 billion, details of which are in the budget. Our messages are clear. We need to share the burden fairly and take bold action now to clean up spending.
Finally, we must tackle debt and the high risks it poses to our future. Fiji’s debt level has increased by more than 400% since 2006. Debt payments represent over 60% of our operating revenue and already crowds out essential health and education spending.
To add to our precarious debt situation, government guarantees are increasing rapidly.
The risks of these guarantees for our financial situation are multiplied by this crisis. If we add contingent liabilities to debt, the total debt liability rises to over 100% of GDP.
The country is in a very precarious economic and financial situation. Our work is tailored for us.
We have to start now. I think the Alternative Unity Budget 2022 struck the right balance. We put people first.
At the same time, we are beginning the process of healing our economy and restoring financial stability.
- SAVENACA NARUBE is the head of Unity Fiji and former Governor of the Reserve Bank of Fiji. The opinions expressed are those of the author and not necessarily of this journal.