$3.4 billion budget
November 6, 2015 4:38 am
The Government has announced a $3.4 billion levy for 2016.
In an address that spanned almost three hours, Finance Minister Aiyaz Sayed-Khaiyum laid down government’s plans for next year.
Fiji’s economy is expected to grow by 3.5 percent next year.
“Government’s broad fiscal policy remains focused on growing the economy through investment while at the same time ensuring fiscal sustainability. This strategy insures that resources are adequately provided towards priority and growth sectors – such as infrastructure, education, agriculture, housing and social protection.”
Net Deficit is set at $285.8 million or 2.9 per cent of the GDP next year slightly up from the 2.5% for 2015.
Total revenue is projected at $3.13 billion and total expenditure at $3.41 billion.
“Capital investments, Madam Speaker, provide returns not only to government but also to all Fijians. The Capital to operating expenditure mix has significantly improved in recent years from a mere 40 percent in 2007 to 40 per cent in the 2016 budget. The expenditure mix in 2016 has been maintained at 60 percent operating and 40 percent capital – the higher the proportion of capital expenditure to total spending, the higher the quality of the budget deficit.”
Overall debt is decreasing – it’s estimated to be around 48.1 percent of the GDP next year.
Fiscal deficit for 2017 and 2018 is forecast to 2.5 percent and 2 percent of GDP respectively. As a result, debt is expected to further reduce to around 48 percent of GDP in 2017, and 47 percent of GDP in 2018
The Finance Minister also announced that Value Added Tax will be reduced from 15 percent to Nine percent.
The government has also introduced two new levies, the environment levy and health levy. The environmental levy of six percent will be imposed on tourism related activities and is expected to generate $69.6 million revenue in 2016.
The health levy of six percent on tobacco and alcohol and an increase on sugar sweetened drinks from 5cents per liter to 10 cents per liter will gain $5.4 million revenue.
His address also dwelled on reforms, restructures and improvement of services beginning with a major overhaul of the public service.
“First, we will to develop our human capital – that is – the people we need to carry out the work of government at all levels. The reform of the civil service will create a Ministry of Civil Service that will set a standard for organization, hiring, evaluation, discipline and emoluments.”
Aiyaz Sayed-Khaiyum says the 2016 budget will benefit the people.
“The 2016 budget Madam Speaker makes a bold statement to the Fijian people. It says, “Your government believes in you. It will do everything it can to help you be successful It will help you live a productive and balance life and ensure that your country stands as an equal to any country in the world, large or small. We will do all we can to root out unfairness and to eliminate undue burdens particularly on those unable to bear those burdens. We will build a society where people have more options and a greater opportunity to make their choices for their own good.”
Prime Minister Voreqe Bainimarama has hailed the 2016 budget as ‘The People’s Budget.
“All have heard the budget. It’s the people’s budget like previous years, we always look after both sides of the House, the people in the rural areas, the poor people and of course the business sector so that we can all move together.”
The theme for the 2016 budget is The Future: A strong Fiji, A Fair Fiji, A Health Fiji.