Budget Presentation to Nadi Chamber of Commerce By Dr Rohit Kishore Fiji National University

Purpose of Government Budgets Provide efficient management of the economy and accountability of public funds. Thus the budget should achieve the following objectives: Whether the budget achieves its fiscal objectives? Is the budget transparent and accountable; Accountability and Transparency! Is the economic development commensurate with the size of the government expenditure? Does the budget reflect the economic reality? Does the budget promote sustainable development?

Basis of 2019/20 Budget The five pillars as the key areas of focus of this budget: Strengthening Law and Order, Protecting the Natural Environment, Empowering the Young, Spurring Technology and Innovation and Building Certainty in an Uncertain World.

2019/20 Budget at a Glance

2019/20 Budget at a Glance (Con’t) Expenditure = $3.84 billion; revenue forecast = $3.49 billion, net deficit $349.2, = 2.7 percent of Gross Domestic Product Reduction in about 1 billion expenditure Reduction in number exercise and physical duties Export income incentives Full deduction for staff FNPF Introduction ECAL on cars and white goods Reduction in Plastic and Nabro Landfill Incentives First home buyer scheme continues; Loan guarantee for 1.5m loan to housing authority at 0.05% fee

Economic Issues Economic Growth Micro/Macroeconomics Factors (internal/external factors) Import and Export, Current Account Balance and Foreign Reserve Tourism Industry Sugar Industry/non sugar agriculture sector Resources Sector Liquidity Issues National Debt Budget Deficit

Problems of Small Economy of a Developing Nation Heavy reliance on government funding to provide economic stimulus/incentives, etc. High expectations from government to provide most services free Private sector is small and narrow focus Limited foreign investments and FDIs Weak manufacturing sector, every things money No social security net/ heavy reliance on FNPF High level of import with limited foreign reserve

Real Challenge of 2019/20 Budget The Real Challenge; How is the 2019/20 budget going to stimulate the much needed economic growth on the one hand, and reduce debt by cutting expenditure on the other? Expansionary Versus Contractionary budget polices And to do so without increasing taxes and charges on businesses And to continue providing all publics services; e.g.; health, education, support for low income earners, etc, etc

The major operating grants provided in the Budget include: Water Authority of Fiji - $ 89.0 million Fiji National University - $ 56.2 million Fiji Revenue and Customs Service - $ 55.2 million Judiciary - $ 54.4 million Social Pension Scheme - $ 46.0 million Poverty Benefit Scheme - $ 36.0 million Free Education Year 1-8 - $ 33.6 million University of the South Pacific - $ 32.0 million Free Education Year 9-13 - $ 30.1 million

Land Transport Authority - $ 23.3 million Bus Fare Assistance - $ 20.0 million Fiji Roads Authority - $ 19.7 million Grant to Fiji’s Servicemen’s After Care Fund - $ 11.7 million Legal Aid Commission - $ 10.7 million Parliament - $ 10.2 million Bus Fare Programme for Elderly/ Disabled persons - $ 10.0 million Tourism Fiji - $ 8.9 million Child Protection Allowance - $ 8.0 million Fiji Independent Commission Against Corruption - $ 8.0 million