A number of stringent measures have been announced by the Interim Finance Minister, Mahendra Chaudhry in the 2008 National Budget Address.
Chaudhry has revealed a number of measures to ensure that the public sector reforms gain momentum, a number of initiatives to ensure that exports are increased, import levels are decreased, our net budget deficit is maintained at 2 percent, debt levels are controlled as our debt is now reaching unsustainable levels.
We start off direct and indirect taxes.
All items that have been levied fiscal duty of 3 percent will increase to 5 percent. Fiscal duty on mobile phones have been increased from 3 to 15 percent, the duty on laptops has increased from 0 to 15 percent while the duty on imported coconuts, pineapple, guavas, mangoes, oranges, mandarins and lemons have all increased from 3 to 15 percent.
However there is some good news as fiscal duty on cement, beef, pork and chicken has been decreased from 27 to 15 percent. All imports of plastic bags will be banned.
Chaudhry has also revealed that duty rates on certain basic food items have been reduced.
Its bad news again for smokers and alcohol drinkers as the excise duty has been increased by 3 percent. This comes into effect immediately.
Income Tax threshold has been increased to $9,000 from $8,840 to relieve taxpayers whose income is less than $9,000 from paying PAYE.
Meanwhile Chaudhry has also announced a new Tourism Sector Incentive Package.
However there is an increase in the Hotel Turnover Tax rate from 3 percent to 5 percent.
Chaudhry has also announced a number of duty rate changes for vehicles.
A number of changes have also been announced in relation to the importation of new buses and duty rate changes for the bus industry.
Chaudhry said this is not a populist budget, it’s a responsible budget to ensure that we have sustainable growth.
Interim Finance Minister, Mahendra Chaudhry has announced that the interim government will now speed up the public sector reforms which would see a number of works outsourced to the private companies.
While delivering the 2008 National Budget address, Chaudhry has announced that the interim government has decided to outsource selected government services which include roads, water and sewerage infrastructure. Chaudhry said this is necessary and the works outsourced will be maintenance of the current infrastructure and new projects.
Chaudhry has also revealed that the ministries will be reduced from 17 to 13 and further reforms are also necessary. He also said that the interim government main aim is to right-size the civil service and there will be emphasis on reducing the recurring expenditure and reduction of expenditure in the non-critical areas.
Chaudhry said all the ministries have already been directed to identify and reduce expenditure by ten percent in each ministry.
The theme for the 2008 National Budget is Building a Platform for Quick Recovery and Sustainable Growth. Chaudhry said for six years we were living beyond our means where expenditure was high, and our exports were just one third of the total imports.
He said immediate financial stability has been achieved by the interim government after the measures were implemented from the 2007 Revised Budget. He said the Rescue Operation is successful and our economy is now on the mend. He also said that the 2008 budget is a budget of hope.
However Chaudhry said they are now looking at measures to ensure that our debt levels do not continue to increase as it is now at an unsustainable level. He said this necessary as by just increasing debt levels will affect our children.
He has also revealed that the interim government has agreed to establish a Financial Services Commission.
They will soon formulate a legislation to establish the commission which will monitor the bank interest rates, fees and charges.
On to the allocations:
The 2008 National budget Allocation has been announced.
The Education Sector has been allocated a total of 296 million, a decrease from their allocation of 320.6 million dollars last year. Of this total amount, 36 million dollars will be going to the University of the South Pacific, 8 million to the Fiji Institute of Technology and for the first time 1.8 million dollars will be going to the University of Fiji.
The Health Ministry has been allocated 139.5 million a decrease of 11.3 million dollars from the revised 2007 National Budget. A total of 9.5 million dollars will be allocated for pharmaceuticals, 500 000 dollars for the fight against HIV and 2.5 million dollars has been put aside for the Fiji School of Medicine.
For the upgrading and maintenance of roads, a total of $40million has been given to the Ministry of Public Works and a total of 56 million dollars for water supply.
The Fiji Police Force has been allocated 70.5 million dollars which is an increase of 0.6 million dollars from last year and the RFMF has received a total of 81.5 million dollars, 23 million of which has been set aside for overseas UN peacekeeping missions. Chaudhry has highlighted that the money set aside for overseas mission of 23 million dollars will be repaid to the Government by the United Nations.
3.5 million dollars has been allocated for the 2009 General Elections and Chaudhry has called on the international community to try to assist Fiji in ensuring that we have elections by March 2009.
The fight against corruption has received a timely boost with the Fiji Independent Commission Against Corruption receiving a total of 3 million dollars and the National Council For Building a Better Fiji has received a total of 400,000 dollars.
Chaudhry has also revealed that 18 million dollars has been allocated for Family Assistance. 1.1 million dollars has been allocated for the Ministry of Women and a total of 5 million dollars for squatter upgrading and resettlement.
After announcing a projected 10 percent increase in tourist arrivals for 2008, the Interim Administration has allocated a total of 12 million dollars to the Tourism Industry.
Turning to the Fisheries Department, Government has given them a total of $800,000 of which $400,000 will be used for the upgrading of Fish hatcheries around the country.
The Interim Administration has not forgotten Rural Development as a total of 2.5 million dollars has been allocated towards that and a total of 5 million has been allocated for the Northern Development Project.
Turning to sports, Fiji's preparation for the Beijing Olympics has been boosted by a 250,000 dollars allocation with $200,000 dollars for rural sports development.
Chaudhry also revealed that the National Youth Service Scheme would be allocated a total of 1 million dollars.
5.6 million dollars has been allocated to cater for the after care for senior citizens and retired soldiers.
Stringent measures in 2008 Budget
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