HON. A. SAYED-KHAIYUM. – Thank you, Madam Speaker. Madam Speaker, it is my great honour to present to the Parliament the Budget for the 2016-2017 fiscal year.
This is the first time the Budget has been announced at night, and it is being carried live to people’s homes over our free-to-air TV Stations – FBC and Fiji Tv. Madam Speaker, for the first time the coverage includes a sign language interpreter for the hearing-impaired which can be viewed on FBC.
Madam Speaker, as a Government, we are acutely aware that many of the people are still reeling from the effects of Tropical Cyclone Winston. As every Fijian knows and we have directed most of our resources over the past months to the cyclone relief effort, in the task of rebuilding our nation; whether it is to the ‘Help for Homes Initiative’ or the distribution of food rations, their Government is working hard to meet the immense challenge we were presented with on 20th February this year. The effort, Madam Speaker, continues across the broad front in the announcements I will make tonight, as we redouble our efforts in this Budget to get Fijians and our beloved Fiji back on their feet.
It is also our intention, Madam Speaker, not just to present the Budget, but to present a new step in the path forward to a long-term sustainability, economic growth and effective responsive Government. No annual budget stands alone, Madam Speaker. Each budget should be seen as a step on a journey into the future as we meet basic needs, plan for growth and change, confront new challenges, and embrace and provide new opportunities. And we are determined, Madam Speaker, that this is a journey that all of us will make together with no Fijian left behind.
Most of all, Madam Speaker, tonight we would like to talk about the ways the Government will empower people, particularly the most vulnerable and most forgotten. Madam Speaker, we are talking about our fellow Fijians, who have been held back by poverty, they have been marginalised and kept in the shadows via disability, or beaten and preyed upon because they are women or children. We will outline the boldest effort any Government in the region has ever made to bring disabled citizens fully into the mainstream.
This year, as you know, we again held public consultations on the Budget directly with Fijians all over Fiji. We want to hear what they had to say. We also went a step further and for the first time, held direct consultations with high school students and persons living with disabilities. There are thousands of ideas, creative solutions and unique perspective and problems in our country, and Government needs objective input from the ground on what problem it needs to tackle, whether it is a matter of bus companies taking money from children with vouchers when we know that they should not be, or taxi drivers refusing to pick up disabled people. We have had good, frank and open discussions.
It is gratifying to exchange views with people who care deeply about our country, who could give insights into how others and their Government affect their lives, and who, at the end of the day are more interested in what was best for Fiji and their fellow Fijians.
Madam Speaker, it is particularly gratifying to engage with our 12th and 13th Year students, who are on the verge of entering university or the workforce. They are our future leaders, and every decision we make will affect them profoundly. So, Government wants to hear them and ought to take their views very seriously, and this Budget contains a number of provisions that are designed to help prepare them for the day when they will become job seekers and also job creators.
Certainly, we have had to talk about priorities in these meetings because no government, Madam Speaker, can accomplish everything it hopes to accomplish all at once. Funds for all governments are limited and neither do we have the manpower or womanpower to accomplish everything that needs to be accomplished in Fiji all at once.
We have to face economic realities in our national budget and perform the same balancing act that people perform with their family budgets. For example, Madam Speaker, in all the consultations, a student told me that the road to her school and village needed to be paved with tarseal and they also needed what would she prefer to have first-hand and without hesitation, Madam Speaker, she said “electricity”.
In making these decisions, Madam Speaker, we must be guided by equity and fairness, but also be enabled by the need to make sure that urban, rural and maritime communities are all served and by a commitment to put Government’s resources to work for as many people as possible with no group unfairly disadvantaged or advantaged. And of course, we are also guided by the need to ensure that everyone in Fiji lives with dignity.
As the Honourable Members of Parliament know, this Budget represents a departure from traditional Fiji because we have changed our fiscal year to run from 1st August to 31st July, our financial year. As we have stated, Madam Speaker, we did this for three reasons, to:
- ensure that we would be able to spend taxes we collect at the end of a calendar year within the financial year;
- avoid the disruptions and inefficiencies that inadvertently occur during the December/January season; and
- to ensure that our Budget is not hijacked or rendered moot by the need to respond to the tropical cyclones that inadvertently hit us in the cyclone season from November to April.
The new financial year, Madam Speaker, will give us better predictability, greater budget security and a much stronger ability to manage public funds. Still, this Budget would look remarkably like the budgets of last year and year before it, were it not for the need to respond to Tropical Cyclone Winston.
It is important, Madam Speaker, for governments to be serious, consistent and predictable, and not to lerg about changing priorities drastically from year to year. Of course, the Government must have a vision which we do, but it must stick to it, which we have and intend to. Our businesses, our people and our international development partners need to know what to expect of us over several years, and we need to give them a stable platform for planning, growth and confidence. That, Madam Speaker, is what we are doing.
And we intend to do that better, Madam Speaker. So, from next year, Ministries will prepare three-year and five-year budget submissions, that will allow us to make better plans, use Government finances more efficiently, and attract more international development assistance. These plans will be flexible, of course. A government cannot have rigid multi-year budgeting, but it must have a clear sense of where it is going and how it intends to get there.
A single year approach to budgeting cannot address the needs of our people, nor ultimately can it be taken seriously. Madam Speaker, the approach must not be one device as we have seen in the past, and it is still true for some quarters in our society.
As I present this Budget, Madam Speaker, it is not my intention to review the detailed programmes of all Ministries or go line by line through Departments and State Enterprises. Instead, Madam Speaker, this will be a much shorter presentation than in the recent past, and I only highlight some of the key priority areas and we will make summaries for individual Ministries available to the members of the public from tonight in the Government Facebook page, on the website, and the entire Budget Estimates, Madam Speaker, will be available online as it was last year.
Madam Speaker, be rest assured Government’s commitment to infrastructure development, national security, education, health, agriculture and the other essential Government activities continues unabated. Of course, the Honourable Members of Parliament will go through the detailed figures in the Estimates, and debate them when we meet next, after tonight.
Madam Speaker, we have achieved steady economic growth over the years, thanks to consistent, controlled and expansionary policies with the vision that have supported a strong activity in all sectors. We have achieved this, despite natural disasters that have affected the performance of the agricultural sector, damaged infrastructure and disrupted the service sector.
Despite these challenges, Madam Speaker, Government had re-prioritised its development programmes, and we have managed to sustain a remarkable level of growth for the last seven years. The Macro-economic Committee estimates our economic growth of this calendar year will be 2.4 percent. The International Monetary Fund (IMF) predicts it will be 2.5 percent and the Asian Development Bank (ADB) predict it will be 2.7 percent. However, we believe that our economic growth will be somewhere closer to 3 percent.
Tropical Cyclone Winston will have a ripple effect through the economy and has negatively affected agricultural exports and even dampened tourism arrivals for a period of time, but it has not been enough to prevent the economy from growing at a respectable rate, Madam Speaker. Fortunately, we have a sound recovery programme in place and so we expect our growth to be broad-based and sustainable.
We are embarking in the trend in the world economy which have been volatile and somewhat sluggish. We, Fijians, are resilient and optimistic people, and will take more than even the most powerful tropical storm ever in the Southern Hemisphere and the second strongest ever in the world to deprive us of the strong and healthy future we have planned for ourselves.
The Fijian economy is expected to grow by 2.6 percent in the calendar year, ending December 2017, and 3.2 percent for 2018. This will mean, we will enjoy nine consecutive years of economic growth, the longest period of growth, Madam Speaker, in Fiji’s history.
Because the fiscal year no longer coincides with the calendar year, Madam Speaker, it is important to note that the Fijian Economy is estimated grow by 3.1 percent under the new 2016-2017 fiscal year, and 2.8 percent for the fiscal year 2017-2018.
Foreign reserves, Madam Speaker, are currently strong and expected to remain stable enough to fund in excess of five months of import cover. Despite the effects of Tropical Cyclone Winston on some prices, we expect inflation to remain at a manageable 2 percent to 3 percent.
The Fiji National Provident Fund (FNPF) has played a major but largely unheralded role in Fiji’s economic performance and strength was a critical factor in our response to Tropical Cyclone Winston. The FNPF allowed members to withdraw $1,000 in Post-Cyclone Assistance and up to $5,000 for Quick Repairs Assistance. The FNPF has paid out $276 million to 180,000 members under the cyclone assistance.
Despite this massive payout, Madam Speaker, the FNPF will credit its members a higher interest rate of 6.25 percent, compared to 2015. This, Madam Speaker, the strong financial position of FNPF has only been achieved because of the reforms implemented under the Bainimarama-led Government a few years ago. The reforms adopted by the Fund that produced an extremely sound investment mechanism for Fijians and in important source of investment for the nation. This has recently, Madam Speaker, again, reconfirmed by third party actuarial assessments.
Madam Speaker, as we charge and execute our recovery, the international community has come together to assist us in part, of course, for humanitarian reasons. However, beyond immediate humanitarian concerns, Madam Speaker, they also want to help us stay on the trajectory we have established. Our economic policies have shown results and they won the praises of international financial institutions, development aid, Madam Speaker, it is also a bet on this country’s future and with very favourable odds too, we might have.
Madam Speaker, Government has prepared a Budget for 2016-2017; with expenditures of $3.64 billion; a projected revenue of $3.8 billion; a deficit of $468 million, Madam Speaker, or 4.7 percent of GDP. The need to pay for Tropical Cyclone Winston recovery is largely responsible for a deficit that is higher than we had anticipated, but we also know, and so do our development partners and multilateral development banks, that we have no choice and it is a trend that all countries that have a climatic event such as we did, it must have expansionary policies in order to recover the economic growth it has lost.
We must do, Madam Speaker, whatever it takes to rebuild our infrastructure, our homes and our economy, and get Fiji back to normal as quickly as possible. In fact, had it not been for Tropical Cyclone Winston, Madam Speaker, our projected deficit would be around 2.7 percent.
Government has been very prudent in its management of the economy, and this is part of that prudent management – knowing when it is necessary to assume debt because the alternative is intolerable. This deficit, Madam Speaker, is truly an investment in Fiji’s future.
Madam Speaker, the Ministry that manages robust economy, the Ministry of Finance, will change its name to the Ministry of Economy come 1st August, to reflect the more comprehensive approach to our economic wellbeing and will see to our reform, to create a modern Civil Service.
Madam Speaker, I will now talk about the Tropical Cyclone Winston Rehabilitation and Reconstruction. Madam Speaker, we all know the devastation we suffered from Tropical Cyclone Winston; 44 lives were lost and our thoughts are with the families who lost their loved ones. Damage, Madam Speaker, was caused in all four Divisions and 250 Schools, and more than 30,000 homes were severely damaged or destroyed.
The Post-Disaster Needs Assessment (PDNA) compiled by the World Bank (it was joint effort by the World Bank, the European Union, United Nations and the Australian Department of Foreign Affairs & Trade) to the total damage bill at FJ$2.8 billion.
Tropical Cyclone Winston Rehabilitation and Reconstruction, Madam Speaker, is our highest priority for the coming year, and we have pooled the Government together with private sector groups, like the FIji Institution of Engineers to be one team, dividing up the responsibilities and making sure we can rebuild and recover as quickly as possible. We wish to acknowledge and thank the support of all those engineers of the institution, who worked tirelessly to carry out the professional assessments free of charge, Madam Speaker.
One of the lessons, Madam Speaker, we have learnt is that, it is enough to simply rebuild; we have to rebuild in a way that will withstand high winds and torrential rains. We should look at this rebuild as an opportunity, as well as a challenge; an opportunity to:
- bury electrical underground so they cannot be blown over;
- learn how to live in areas that can be prone to flooding; and
- to use advances in structural engineering to build buildings that are designed specifically to withstand high winds.
Government’s immediate responsibility was to tend to the needs of the Fijian, who are affected by distributing food rations, temporary shelters, medical supplies and other relief materials throughout the country, but we have to shift quickly to recovery, to getting people out of the temporary shelters and back to their homes and villages, back to their livelihoods and the lives they had built. We will remember always that whilst Tropical Cyclone Winston recovery is a national project, it is also a deeply personal matter to every Fijian who has been displaced, whose life was shattered, who lost a loved one or whose future has changed forever.
It may take a few years in some parts of the country to bring economic activity and growth fully back to the way they were before Tropical Cyclone Winston, and Government may, according to the Disaster Recovery Framework, have to spend as much as $730 million directly to fully restore the FIjian economy.
That, Madam Speaker, is an addition to expenditures by the private sector, individuals and aid partners. In this respect, Madam Speaker, we will repair damaged schools, relocate families in hazard-prone areas and develop sustainable disaster resilient settlements.
While we have no legal obligation to rebuild private homes, the single largest expenditure that has been to help to rebuild homes was done by the Government. So many Fijians who were in such a great need, that Government simply had to act. We began quickly with the ‘Help for Homes Initiative’ which was launched by the Honourable Prime Minister and which is a critical tool for reconstruction.
Government has spent $88 million to assist people in the areas most directly in Tropical Cyclone Winston’s path, including Koro, Taveuni, Southern Vanua Levu, Ra, Tavua, Ba, Lautoka, Tailevu, Ovalau and Vanua Balavu. The initiative rests on Government’s firm belief in the wisdom and energy of the Fijian people.
We have allocated, Madam Speaker, another $20 million to continue with the ‘Help for Homes Initiative’ in the 2016-2017 fiscal year. We will repair and strengthen critical infrastructure, such as roads, jetties and bridges so that we continue to deliver basic services, such as education, health, water supply, sanitation and electricity.
We are getting significant support from both aid partners and Fijian corporations and other institutions through initiatives, like the ‘Adopt a School Programme’, but much of the burden will fall on GOvernment, Madam Speaker. So far, 38 Fijian schools have been adopted. Only yesterday, we were informed that the Indian Government would like to adopt 30 more schools.
Finally, Madam Speaker, we will work to build resilience, that is, to strengthen the ability of both our local communities and our natural environment to withstand future disasters, including training for all age groups on how to build back better. The figures tell the story. In total, $207 million is provided for rehabilitation works, and indeed, Madam Speaker, we have an allocation in the Ministry of Provincial Development where we are allocating funds and getting trained carpenters to go out to villages and other rural areas to train people as to how to build back better.
And as mentioned, Madam Speaker, we need to partner with our development partners to engage in more adapted infrastructure rebuild, such as underground cabling of electrical lines.
Under the Recovery Plan for Schools, Madam Speaker, the Government is very keen to repair school buildings as quickly as possible so that children can return to classes and regain the sense of normalcy, security and predictability that are so important to children’s lives.
A total of $142.6 million is provided to rebuild and repair all education facilities. Government has accepted request for lead consultancy proposals in the needier schools, the 250 schools that were severely damaged or completely destroyed. We have also allocated $5.2 million to rebuild 43 damaged primary school boarding facilities and upgrade or rebuild 95 damaged Early Childhood Education Centres.
In addition to the 38 schools adopted through the Adopt A School Programme, Government has allocated $132 million for the reconstruction in the needier schools, the 250 schools that were severely damaged or completely destroyed. We have also allocated $5.2 million to rebuild 43 damaged primary school boarding facilities and upgrade or rebuild 95 damaged Early Childhood Education Centres.
Regarding the recent Tropical Cyclone Winston recovery pertaining to sugar, agriculture, fisheries and forestry, Madam Speaker, sugar, agriculture, fisheries and forestry are pillars of Fiji’s economic growth and major sectors of employment for the Fijian people.
An allocation of $17.1 million is provided to support rehabilitation efforts for non-sugar sectors as part of the Ministry of Agriculture’s allocation of $74 million. Those funds will be used to:
- repair and rebuild damaged agricultural offices and quarters – $1.5 million;
- replant some 500,000 coconut trees – $250,000;
- rebuild seawall and irrigation structures and drainage systems – $179,000; and
- develop dalo – $500,000; and
- yaqona crops – $651,500.
And rehabilitate crops in severely affected areas in the Northern, Eastern and Central Divisions.
Government, Madam Speaker, will also support replanting of pine and degraded forests of $0.5 million; restoration of affected seaweed and aquaculture farms – $200,000 and the reconstruction of Fisheries and Forestry Offices and Buildings – $1.6 million.
Madam Speaker, in addition, we have received direct budgetary support of $23 million from the European Union for rehabilitation of the entire agricultural sector, including sugarcane cultivation and processing.
Regarding infrastructure and public utilities, Madam Speaker, under the Tropical Cyclone Winston Recovery Programme, of the total $47.3 million in rehabilitation costs:
- $31.8 million is to be used for the reconstruction of roads, bridges and jetties, and also Irish Crossings, many of which were damaged;
- $8.6 million for water and sewerage; and
- $5.9 million for rural electrification projects, solar home systems and diesel schemes.
Insurance Reform Madam Speaker, under the Recovery Programme: Tropical Cyclone Winston has also brought us face to face with the need to reform our insurance industry and the assumptions that underlie our insurance regime in Fiji. The uninsured losses arising from Tropical Cyclone Winston significantly outweigh insured losses which shows how vulnerable we are to these events. We need to do a better job of overseeing the insurance sector, so that we can give more protection to the Fijian people and the Fijian economy.
Frankly, Madam Speaker, the insurance industry has not been regulated well and the industry itself needs to be more creative and innovative on its own volition and Fiji-focused. Insurance companies simply need to do more. The Reserve Bank of Fiji had already undertaken with the insurance industry, a complete review of the Insurance Act in 2013, and had already identified a number of areas and the need to reform but now, Madam Speaker, we need to move more quickly, and we will soon hold public consultations on the provision of insurance services in Fiji. We must develop an insurance framework, designed to reach to the under-served in our country, in our society who desperately need protection they cannot afford and in future they have some form of protection.
Climate change, Madam Speaker: We are faced with the reality of climate change and sea level rises and we must take intelligent steps to adapt to the situation we are facing; we have no choice. In fact, it would be foolhardy not to act forcefully and immediately.
First, we will continue to be a leading voice in the effort to make the entire world face up to the dire need to reduce greenhouse gas emissions. In recognition of Fiji’s desire and unique ability to be a central point for the other Pacific Small Island Development States (SIDS), to build in-country capacity to access climate fines and formulate bankable projects, I am glad to announce, Madam Speaker, that Fiji’s proposal has been accepted by UNESCAP for Fiji to be the host country for this facility, and in this respect GOvernment has allocated SID funding of $215,000 in the 2016-2017 fiscal year.
At the local level, Madam Speaker, we are helping vulnerable communities adapt to natural disasters and climate change by finding the best solutions for each community and many development partners are working with us already. This could mean building more resilient infrastructure such as seawalls, provide equipment or if necessary relocating entire communities to safer areas nearby. We have already relocated two villages and several more are scheduled to be moved in 2017.
Madam Speaker, we are also restoring and protecting the forest that absorb carbon dioxide and help absorb rainwater through the UN REDD Programme and we are working with traditional owners to develop sustainable fishing practices.
We are investing weather forecasting with new equipment and new offices in areas strategically placed around the country, in order to provide better forecasting and earlier warning systems for the residents.
The World Bank provides a grant of $2.2 million for this programme and Government has contributed $245,000. Fortunately, Madam Speaker, international aid partners have come forward with funding projects to help us deal with the effects of climate change and we will continue to pursue international support for the very important and strategic work that we are doing.
Roads, utilities and other infrastructure: Madam Speaker, three years ago, we embarked on an ambitious programme to put an end once and for all to the disgraceful state of the nation’s roads. We remain committed to a modern and robust road system that serves cities and rural areas alike and we have allocated $527,000 million to the Fiji Roads Authority for 2016-2017. We maintain a balance as much as we can between the rural roads that are less travelled but vital to so many communities as it connects them to markets, schools, services, health facilities. And the urban roads on the other hand, Madam Speaker, it served many people in a high density area and carry the bulk of commerce and trade.
Rural roads funding, Madam Speaker, will increase this year to an unprecedented $95 million. Rural projects include the eastern island roads upgrade at $6 million; (and I am highlighting only the key ones here), Rotuma Farm Roads at $3.9 million; Kilaka Road Stage III and Crossing at $3.4 million; Kiuva/Kaba Peninsula Road at $3.3 million and Marokana Village Road Stage II at $2.8 million.
Madam Speaker, $4.5 million is allocated for urgent repair of high priority bridges. Many of our bridges, Madam Speaker, are weak because of poor construction some time back, in some cases due to corruption and overloading: the Walu Bay Bridge; Tamavua Bridge; Lami Bridge; Tavua Levu Bridge; Matainavuso Bridge on the Kings Road; Vesidrua Bridge in Vanua Levu; Labasa Bridge; Nakasava Bridge on the Traninsular Road in Vanua Levu and Naiyalayala Bridge in Taveuni. All of these fall into the said category.
Madam Speaker, $38.2 million is allocated to upgrade and maintain bridges in both rural and urban areas, including the Ovalau Bridge Programme at $3.17 million and Taveuni Bridges at $9.5 million. Madam Speaker, $7.4 million is allocated to renew and maintain jetties maintenance and renewals, including Savusavu jetty, Vunisea Jetty and Natovi Jetty Stage II.
The Government Shipping Services is allocated $22.8 million to upgrade Government shipping vessels, wharves and buildings, purchase a new multi-purpose vessel and install beacon piles at Nabouwalu Jetty and Ellington Wharf.
The Street light improvement programme which is so critical to public safety will be funded at $10.7 million for urban areas and along the Kings and Queens Roads and rural areas of Vanua Levu.
Madam Speaker, $0.5 million is dedicated to the urgent repair of Ellington Wharf, a major point of embarkation and disembarkation for people travelling North and from North. Also, in the furthest of connecting our many islands, we have allocated $150,000 to work together with AFL for the expansion of the runway at Matei Airport in Taveuni to accommodate the ATR42 and ATR72 to improve connectivity to Taveuni and we hope this work will be completed within 18 months.
We have allocated, Madam Speaker, $200,000 to begin preliminary works for the development of a new airport in Seaqaqa, Vanua Levu.
Madam Speaker, we are improving the capacity of the Water Authority of Fiji to provide water to communities whose water supply is vulnerable to disruption during heavy rain and eventually restore the water systems and to deliver water to communities during emergencies. We simply have to expect to do this work every year and we still anticipate it in WAF’s 2016-2017 allocation of $308.6 million, of which operating grant is $79.2 million and capital works, Madam Speaker, is $229.4 million.
Madam Speaker, this also includes $7.5 million for the Rural Water Programme, which will provide water to 14 villages, schools and settlements in the Eastern, Central and Western Divisions and $1 million in reserve for projects that are being developed. Madam Speaker, communities no longer contribute to Government’s rural electrification and rural water programmes.
As you are aware, Madam Speaker, Government had made a policy decision unlike previous governments that the communities do not need to make a contribution. Government now bears the full cost and we have allocated $14.9 million for rural electrification. Community contributions that are previously collected for water and electricity from last year have been refunded or will be before the end of July 2016.
Madam Speaker, in the Education sector, reforming and improving all aspects of education system has been the single most important undertaking of the Government over the last few years. We have created truly free public education for the first time, increased teachers’ salaries and put our children at the centre of our efforts. This year, we will do the hard work of repairing and rebuilding our schools and school buildings in large parts of the country. We must also move ahead with the work classroom education.
We have increased salaries in 2016-2017 Budget for Teachers and Early Childhood Education at a total cost of $6.8 million. Many of these teachers were very much underpaid, there was no recognition of teachers who had Degree qualifications in Early Childhood Education, some had Diplomas and some were just simply trained on the job. There will now be a demarcation and recognition given for that. These are the teachers, Madam Speaker, who set the patterns for learning in our children’s lives and they are vital.
We have also increased grants to the Early Childhood Schools by 33 percent because $50 per child grant will now be given for three terms instead of the current two. So, we will now give $50 per term for three terms, previously we were only giving $50 for two terms and in some schools, Madam Speaker, because the teachers were not paid well, the $50 that was allocated for the child, they were using some of that money to pay for the teachers. Now, they will not have to do that because the teachers will be given their full salary and the $50 will be utilised fully for the students.
Madam Speaker, and when high school students are ready to graduate, they will find in the 2016-2017 Budget allocation, 30 more scholarships available under the Toppers Scheme at a cost of $630,000 additional. Madam Speaker, while we need our young people to study Engineering, Ocean Science, Biology and other scientific and technical subjects, such as Land Surveying, Town Planning, we also want to encourage as much as possible the increase in Toppers as these will give greater accessibility to other areas of study which students want.
The Fiji National University, Madam Speaker, will continue its physical and curricular expansion. It will receive an increase capital grant of $6.5 million to begin work on its new campus in Labasa, which will open new opportunities for the young people in the North. It will also receive a capital grant of $4.7 million for a Veterinary Laboratory and $2.5 million for the Fiji Maritime Academy for its building. Its operating grant is increased from $36 million to $45 million, to attract top lectures as well as full-time and adjunct faculties, which will increase recognition and raise the value of the FNU Degree in Fiji and beyond. This is one of the issues that we need to ensure that the quality and accreditation remains to international standards.
Madam Speaker, we are also happy to announce that FNU from the middle of next year will begin to offer Graduate Medical Programmes for those who have already done a Science Degree, for example, a fine Pharmacists maybe practising as a Pharmacist and may want to go back and get cross-credited and then be able to get an MBBS. Yes, there is a recognition of those degrees that they have committed or carried out previously, Madam Speaker. This of course, Madam Speaker, will increase the pool of doctors that will be made available to our medical system and beyond.
Madam Speaker, employment and job creation: Madam Speaker, we will revise the Employment Taxation Scheme to increase tax deduction on wages paid to first full-time employees from 150 percent to 200 percent. This is to encourage employers to hire young people, women and others who may be entering the labour force for the first time. Essentially, whatever wages they pay, they must pay the minimum wage equitable to that sector and they will be able to claim that wage as a 200 percent rate as a tax deduction.
We are also proposing, Madam Speaker, a new scheme. Also, a 200 per cent tax deduction on wages paid to students under two different scenarios. One would be on job replacement, that is part of the course required for students for up to six months in a year before graduation. This is to bring employers into the education process and gives students an opportunity to apply their learning and perhaps, get a leg-up on their first job. So, there are some courses, Madam Speaker, that require you to do some practical before you actually graduate. If they find a job to do their practicals, Madam Speaker, the salaries that they receive, their employer can claim a 200 per cent tax deduction.
There are some courses, Madam Speaker, where you have to do some work, some employment, some practical work during the course of your degree, or certificate or diploma, they will also be able to claim the 200 percent tax deduction.
We have gone another step, Madam Speaker, and there maybe students, for example, their courses may not require them to do any practicals but even then, if they do work part time whilst they are studying, they will also be able to claim a 200 per cent tax deduction for up to three months. So, to take a scenario, if a person may be studying a degree course at USP or FNU, and if they are for example studying accounting, they may not have lectures for two days in a week and they find part-time work in an accounting firm, they will get paid and of course, that paid salary they get, their employer will be able to claim as a 200 per cent tax deduction. This will encourage, Madam Speaker, our students to go out and to look for work. This will encourage employers to give work. It will also mean that at the end of their studies, these students will be able to say that they have job experience, which will make them better placed to get full time employment.
Madam Speaker, we will also encourage employers to provide what we call in-service education to their employees by increasing the tax deduction from 100 percent to 150 percent. If I am working for someone and they think that I need to go and be better qualified and still continue to work for them, if they pay for my Diploma, if it is $2,000, they can then claim that as a 150 percent tax deduction when they file their tax returns. This will also encourage them to do so, they will be able to get an employee who is better qualified, get better output and we have an individual, a Fijian student or a Fijian employer/employee who will be much better qualified.
Madam Speaker, we are also pleased to report that we have allocated a $1 million contribution to build a world class pilot training academy, with two full flights simulators in Nadi by the end of July 2017. Madam Speaker, this is some work that has been going on behind the scene and this is a partnership between Fiji Airways, Airbus and Boeing and a stimulator company, CAE. It may well be that FNPF will join them as a shareholder. It will offer, Madam Speaker, this flight simulator course, introductory training on Airbus A330 and Boeing 737 full flight simulators.
FNU, Madam Speaker, will be invited to partner with the Fiji Pilot Training Academy to offer undergraduate and bound degree programme for pilots as with universities elsewhere in the world. FNU already has a small campus in Nadi which does a form of aircraft engineering. This will be a perfect opportunity for our students to be able to piggyback on this international flight training centre that we intend to set up in which we expect to be fully operational by the end of 2017 calendar year.
Madam Speaker, we want international cadet pilots to begin their training here. There are many pilots going from Australia and African countries to Singapore. There is an opportunity for them to come to Fiji. Our hotel rates are much cheaper than Singapore. They are a lot more competitive, so there is no reason as to why they cannot come to Fiji and by having Airbus and Boeing partner with us in this particular project obviously gives us that international recognition.
Madam Speaker, we expect the academy to inspire young Fijians to pursue careers in civil aviation industry and we also expect international airlines to send their pilots to Fiji for their compulsory simulator training.
Sugar, Madam Speaker: The impending end of the European Union sugar subsidy at the end of 2017 has caused some anxiety in the sugar sector, however Government is on top of this matter. Indeed, Government is closely monitoring how challenging an opportunity in the sugarcane industry has been again politicised in the back of the two Sugar Bills before Parliament. Government will continue, however to focus on its work. Government will continue the fertiliser subsidy with an allocation of $9.7 million; upgrade cane access roads at a cost of $3 million; an increased allocation for the very successful sugarcane development farmer assistance programme up to $11 million.
Government will continue with the digital mapping of the sugar sector, Madam Speaker, is in GPS, in order to develop better statistics at a cost of $600,000. Madam Speaker, Government is a solution driver and remains positive, there is a pledge to look after the interests of the sugarcane farmers and their wellbeing and we are very much focused on that.
Madam Speaker, State assets and services: Improving the quality of essential State services and making them more accessible, easier to use for all Fijians and more resilient in the face of natural disasters is one of the Government’s long-term commitments and the 2016-2017 Budget continues this effort. It is important to decentralise Government services so that people can use them without having to travel long distances.
Madam Speaker, this may seem self-evident, where we can tell you it was not always the case. About three or four years ago, we opened new BDM offices and formed BDM mobile teams. This is Births, Deaths and Marriages. And then we launched a campaign to encourage people to register and we got an astonishing 70,000 Fijians who were not registered. You may recall this, Madam Speaker, in your previous role. People simply had not reported births, deaths and marriages,where people who are 65 years old who did not have a birth certificate because it was too much of an ordeal and too expensive to make the long trip to Suva or Lautoka and maybe Labasa.
Government is moving its services to where the people are because it simply make sense, Madam Speaker. We will establish new offices, refurbish existing offices and upgrade special equipment in offices throughout the country. Priority will be given to improving public health, particularly maternal care, reducing crime and increasing access to courts, decentralising immigration and other vital services, develop its ports facilities and institutions, restoring services to sectors like agriculture and fisheries and protecting Fijian heritage sites.
Madam Speaker, as I mentioned, BDM offices, we will in the 2016-2017 fiscal year establish four new ones in Nabouwalu, Navua, Korovou and Sigatoka, at a cost of $244,000.
Madam Speaker, legal aid services throughout Fiji have shown their value and empowers ordinary Fijians and will receive a funding of $5 million. Madam Speaker, just to put it into perspective, the Legal Aid Commission which commenced or was created in 1998, right up to 2008, had only three legal aid offices in Fiji: Suva, Lautoka and Labasa, in the whole of those 10 years.
From 2008, Madam Speaker, Government has continued to increase allocation to the Legal Aid Commission. As a result, we now have offices in Nasinu, Navua, Sigatoka, Nadi, Ba, Rakiraki, Korovou, Nausori and Savusavu. All of these in the last eight years since 2008 and in this coming fiscal year, Madam Speaker, we intend to open more legal aid offices in Taveuni, Rotuma, Levuka, Nabouwalu and Kadavu, making it a total of 18 offices throughout Fiji, providing greater access to justice to ordinary Fijians and in particular, the most vulnerable and those with low income.
Madam Speaker, major expenditures to improve access and quality health services include $13.4 million to complete construction of the new Ba Hospital; $4.1 million to complete construction for the new Naulu Health Centre in Nausori; $2 million to upgrade the Rotuma Health Centre; $3 million to extend the Colonial War Memorial Hospital Maternity Unit; $2.3 million to complete the low risk Makoi Maternity Unit; and $6.3 million to upgrade the Keiyasi Health Center to a sub-divisional hospital. The people in the interior of the hills in Navosa, Madam Speaker, need a sub divisional hospital and they will get one in this fiscal year.
In the interest of bringing the Judiciary closer to the people and preserving the law and order, Madam Speaker, preparatory works will begin for the new Nasinu Magistrates Court and Lautoka High Court in the upcoming fiscal year. Construction of the new Ba Magistrates Court will also be completed and upgrading of the Magistrates Courts in Taveuni, Nabouwalu and Tavua will be undertaken.
We will create two new Labour Tribunals; one to be permanently based in Nadi, at the moment there is only two Labour Tribunals, both of them are based in Suva. So one will now be based in Nadi and the other one, Madam Speaker, will be a mobile tribunal, so it can go up to Vanua Levu, it can go up to Ra, Tavua, Ba and other parts of Fiji, including Ovalau where there may be employer/employee grievances that need to be dealt with efficiently and they will travel into those places. This, Madam Speaker, will help clear the backlog of cases surrounding employer/employee grievances. The tribunal will come under the magistracy once we enact amendments to the relevant laws, Madam Speaker.
Madam Speaker, works will also include the construction of the new Remand Centre at a cost of $4 million, and the new Women’s Correction facility, both of them in Lautoka for $1.4 million, which are set for completion in the upcoming fiscal year. An additional $1 million has been allocated, Madam Speaker, for the new staffing requirements for the new facilities in Lautoka.
Madam Speaker, to increase police presence in short term response times in the heavily populated Nasinu corridor, a total of $2.85 million is allocated to construct the Valelevu Police Station, and to begin preparatory works on a new police station in Nakasi. Works will begin in the new fiscal year on a new police station in Lautoka at a cost of $1 million, and upgrade works would also commence in the Nadi Police Station and others as need arises. The construction of all new police stations, Madam Speaker, will now be standardised.
Also, Madam Speaker, through the Government’s Leasing Vehicle Programme, the Police Force in the next few weeks will have full complement of vehicles for response times and the morale in the Police Force again will be uplifted.
An allocation of $7.5 million, Madam Speaker, is provided to the Fiji Military Forces which has been playing a pivotal role in the recovery and rehabilitation efforts to build capacity and upgrade military facilities and the procurement of specialised vehicles.
Madam Speaker, we have directed our attention to those Fijians in the Lami-Suva-Nausori corridors who cremate their loved ones. Most of our Hindu brothers and sisters, and up to now, Madam Speaker, they have had no decent place to cast the ashes of their loved ones in the sea as part of the funeral rituals. We have allocated funds to build a cart or a walkway to the sea that will give them a quiet and dignified site, where they can perform the sacred funeral ritual of casting the ashes of their loved ones into the sea.
Government maintains cemeteries, Madam Speaker, through the Correction Services and it is a matter of fairness, as well as respect that we provide such a site, for which we will spend $100,000.
Madam Speaker, we will continue to fund Municipal Council initiatives such as markets, through the Challenge Fund, including the completion of this wonderful Albert Park that we see outside this building, and providing a clean image of our new towns and cities. For example, Madam Speaker, in the next year’s Budget, we will be introducing new vacuum street cleaners for Suva, Lautoka and Nadi at a cost of $540,000, and developing Waste Management Systems at a cost of $4.2 million. Madam Speaker, we find that increased urbanisation and more rural and semi-rural areas are now becoming part of the towns and cities we live in.
Micro Small and Medium Enterprises (MSME): Madam Speaker, the Government has consistently put its faith on the Fijian people to produce, innovate and to strive to improve the situation. Fijian people are very hardworking, Madam Speaker, resourceful people, and the Government needs only to provide a level playing field, the right fiscal and economic incentives and occasional boost, and they will respond with energy and optimism. We have done those things and the Fijian people have neither been disappointed nor have they disappointed us. The fact is, Madam Speaker, that grassroots entrepreneurship drives the economic growth and employment all over the world, and Fiji is no exception. So, Government will continue to do all it can to foster the development of Micro Small and Medium Enterprises.
Madam Speaker, Government’s current support of MSMEs is currently delivered through different programmes in various Ministries and Departments, including the Ministry of Agriculture, Rural and Maritime Development, Industry and Trade and Tourism, Fisheries and Forests, Women, Children and Poverty Alleviation.
Madam Speaker, however, we are determined to strengthen the support to the MSME sector by combining all those efforts together. So, Madam Speaker, we are determined to strengthen our support for this sector by taking a robust, comprehensive and strategic approach to developing the sector. Government will establish a National MSME Council to be chaired by the Honourable Prime Minister and a new MSME central coordinating agency which could have Board Members such as the Governor of the Reserve Bank and various other people involved in the financial sector. The Council will provide policy directions to support the MSME sector and the new agency will monitor and evaluate MSME needs and provide financing, training, mentoring, advisory support and business incubation and also collect data, and also support and evaluate data for the purposes of assessing new businesses, help them to be tied in the Fiji Development Bank (FDB). As mentioned in this honourable House before, Madam Speaker, we also carry out a review of the FDB to ensure that going back to its roots and becomes a truly Development Bank.
Madam Speaker, we will also use its unique position to give the MSME access to economies of scale which can be critical to the development. The new agency, Madam Speaker, will work with both the formal and informal sectors, and will work to empower informal operators and bring them fully to the mainstream economy. Some of this work is being done but by different agencies as highlighted. In the future, it will be part of a comprehensive effort to build the MSME sector.
Several programmes will come under the umbrella of the Council and the new agency. We have allocated, Madam Speaker, $300,000 to carry out the scoping works and the regulatory framework for this umbrella body.
Madam Speaker,on a separate note, the Small and Medium Enterprise Credit Guarantee Scheme which gives MSMEs greater access to credit by sharing the risk with lending institutions will continue and Government’s funding is channelled through the Reserve Bank of Fiji where we guarantee loans that are taken by the small businesses through the mainstream banks.
Since the Scheme began in 2012, it has covered more than 1,350 loans valued at approximately $80.5 million. This is an astonishing figure, Madam Speaker. It shows clearly how ordinary Fijians with ideas and ambitions which they have hungered for, and not for a hand our are able to perform well, but for their Government to believe in them and invest in them. We are proud to be part of the Government that has said “yes” to them and they said “yes” tp is/
Madam Speaker, the people have proven us right. In all of these loans that have been given out, Madam Speaker, the defaults out of the $80.5 million has only been $38,250. This is in the bank. There is not a bank in the world, Madam Speaker, that would not accept this risk. So, in the 2016-2017 Budget, Madam Speaker, Government has allocated $1.5 million to keep funding the scheme and it is obviously a bargain for us.
Madam Speaker, the Micro and Small Business Grant which provides financing for entrepreneurs who wish to start a business or expand an existing small business has assisted more than 5,853 applicants with a total budget of $5.5 million. The initial budget allocation was for $1 million, but his programme, Madam Speaker, attracted so many applicants, more than 26,000 applicants and we found an additional $4.5 million to meet this grant’s swell of demand.
This is tremendous value for the taxpayer, but we will need to shift the focus of the fiscal year 2016-2017 to small businesses that have been severely affected by Cyclone Winston. We have concluded a thorough review of Damage Assessment Reports and have allocated $6.4 million, Madam Speaker, to help these businesses rebounds and we have identified and approved 3,172 recipients.
Madam Speaker, the Indian Government has seen the value of this programme and has just, committed, only a couple of MOU to provide an additional $4.7 million for the new recipients.
Madam Speaker, we also remain committed to the Northern Development Project (NDP) which is focused specifically on MSMEs in Vanua Levu’s rural communities, and the Integrated Human Resources Development Programme (IHRDP) which aims to boost small scale economic activities among community groups through projects that generates a sustainable income. The NDP has benefited more than 2,000 Fijians and the IHRDP will encourage residents of marginalised communities to work together productively to produce a single commodity. For the 2016-2017 Budget, Madam Speaker, a sum of $1.5 million has allocated to the NDP.
Encouraging business and investment, Madam Speaker: Government continues its commitment to export businesses in Fiji through the National Export Strategy (NES). Many successful exporters can credit the NES for helping them to expand their businesses to overseas markets and create thousands of jobs for Fijians. This is a lot of subsidy, Madam Speaker, to businesses. It is an investment in Fijians, to benefit all Fijians and helps create opportunities throughout the economy, companies like Ben’s Trading Ltd., that have benefited immensely from this and they are now doing a wonderful job in being a major exporter of crops such as dalo.
Tourism is the biggest sector of the economy, Madam Speaker, and the grant for Tourism Fiji will increase from $32 million to $36 million. Our reputation as a tourism destination has not suffered due to Cyclone Winston. Fiji is strong and the people want to come here. This additional budgetary allocation greatly assisted Tourism Fiji to work with all its partners to secure and improve our market position.
Government also needs to be creative to bring more people to Fiji without compromising our quality, without compromising our standard. In one way, Madam Speaker, which we are announcing today is to eliminate the departure tax for visitors who stay in Fiji for less than 72 hours, so with the attractive routes such as which Fiji Airways now offers to LA, to Hong Kong, to Singapore, to Australia, to New Zealand and the various cities in those two countries, Madam Speaker, now of course, we are flying to San Francisco, we will be able to package Australia, for example, who wants to go to LA to fly via Fiji, spend two days without having to pay the departure tax and Fiji Airways of course can partner with these travels, like with many other hotels, Madam Speaker. So with the attractive routes, Madam Speaker, this will become even more attractive for visitors to come to Fiji for short stays and when they do, Madam Speaker, of course, they will get cheaper tickets, attractive tickets and Fiji Airways are obviously as keen to package such trips.
Madam Speaker, nonetheless, Tropical Cyclone Winston was a wake-up call, reminding us that our economy cannot rely on one or two sectors. Imagine, Madam Speaker, what might have happened if Tropical Cyclone Winston had followed its earlier predicted course, ripping through Suva, the Nasinu corridor where nearly one-third of our total population lives and where a number of manufacturing plants are located, if it went the same path affecting all the major tourism areas like Nadi, like the Coral Coast, our economy could have been completely wiped out and we obviously, Madam Speaker, cannot let that happen. This is why we say that we are a vulnerable economy where we have one climatic event that can set us back for decades. It is therefore, Madam Speaker, critical for Government to ensure that we expand our economic base. We simply do not rely on just one or two sectors to contribute to the economy.
Madam Speaker, as a result of that, of course, Government is increasing its allocation to Investment Fiji to $2.2 million, to encourage the investment in new industries. Government will develop a modern services and manufacturing plant in the Western Division, with all infrastructure in place for investors, domestic and others and preference will be given to domestic air industries first, it can begin operations immediately and start employing Fijians. We have allocated $0.5 million to begin this project and sites have already been identified in Drasa and Wairabetia.
Madam Speaker, we nearly doubled funding for Tourism Fiji to $1.9 million because every film or television programme that is filmed here stimulates businesses, creates jobs and promotes Fiji as a place to live, work or visit. We are assisting ordinary businesses through the national Fijian-made, buy Fijian-brand in campaign, raising awareness to the quality of Fijian-made products and the importance of supporting Fijian businesses, $0.5 million, Madam Speaker, is allocated for this wonderful initiative.
Madam Speaker, informed and empowered consumers are a vital part of the free market and Government is increasing support of the Fiji Commerce Commission to $2.5 million and the Consumer Council of Fiji to $1.3 million.
Madam Speaker, one other way to help ordinary businesses and their customers is to eliminate the archaic legally mandated limits on commercial hours for ordinary shops. They are arbitrary and out-of-date for today’s modern Fiji and are source of inconvenience for many people who cannot find enough hours in a day to manage work, home, family and other responsibilities, but still take care of essential services. Businesses and citizens alike had pressed Government to allow the market and that means businesses and their customers to determine when businesses can open their doors to customers 24 hours a day if they wish if it make business sense. We agree and we are happy to give the average working person more hours every week to supply the home, maintain their car or take care of financial businesses.
We also think, Madam Speaker, that visitors will also be tempted to buy more if it is more convenient for them to do so at hours that may be outside of the normative hours. This measure, Madam Speaker, is good for people, good for business and good for jobs – it just makes sense. By repealing this archaic law will also provide greater legal protection to thousand of Fijians, Madam Speaker, who work as shop assistants in retail stores throughout Fiji.
If one were to read this archaic law, Madam Speaker, one will be astounded. So, Madam Speaker, with the repeal of this law and the replacement of it with the new Bill, it will not only create the opportunity for shops to stay longer, and we know many shops actually, Madam Speaker, do stay open illegally at the moment, there are shops we can go to and buy yaqona or buy chinese lolly at 2:00 a.m. in the morning, but those are all illegal operations. This will now allow them to be legally operative but, Madam Speaker, also at the same time, the new law will set out the rights and privileges of workers prescribed in the retail sector. They do not have the specific coverage at the moment.
It is also very interesting, Madam Speaker, that the retail sector is one sector where they have an absence of union so Government has stepped in to protect these workers by repealing this law and making sure that retail workers or workers who work in the retail sector as shop assistants, et cetera, are covered by the ERP and are covered by the Health and Safety Work Act.
Madam Speaker, furthermore, the Honourable Minister for Local Government also, through the regulations that will be passed from tomorrow, will remove the very archaic law provisions pertaining to the number of car parks as required development. Technology has changed, the requirement have changed, so now we want to encourage the construction of modern commercial, industrial complexes, Government relaxes requirements under the Town and Country Planning Act for car park space which will allow developers more flexibility to use land in the most logical and efficient manner for their building projects.
Information, communication technology, Madam Speaker: The Government has been determined from the beginning to use technology to integrate Fiji more effectively with the rest of the world, to connect Fijians and to deliver information to every corner of every island in our beloved country.
Government will also work to improve service delivery in the sector so that ICT can play a larger role in stimulating Fijian economy. To provide added stimulus, we will eliminate import duties on components and materials that are essential to ICT developments. This include modems, duties have been reduced from 5 per cent to 0 per cent; telecommunication batteries, duties have been reduced from 32 per cent to 5 per cent; and 5 optic cables, where duty has been reduced from 5 per cent to 0 per cent.
The use of five optic cables, Madam Speaker, will boost internet access speed and deliver e-services more efficiently to more Fijians throughout Fiji.
Madam Speaker, the capital expenditure for all ICT programmes is $30 million, which includes, Madam Speaker, $9.2 million that is dedicated to connecting Vanua Levu to the Southern Cross Cable through a link from Samoa to Vatuwaqa, which will pass between Vanua Levu and Taveuni.
Madam Speaker, this is a project that holds enormous potential to create jobs, promote investment and improve Government services in Vanua Levu. Residents will be more connected with the rest of Fiji and the world, which is good for business, good for education and good for families. This is an investment in our country that we will pay back many times over in a very short period of time.
Madam Speaker, $400,000, has been allocated for the Central VoIP Platform, which will reduce communication costs within Government; $1 million has been allocated for the Government Fibre Network Project, which will boost internet speed, access and deliver services more efficiently to more people throughout Fiji.
We have a Bill before Parliament to establish a national switch or the Fiji Interchange Network to connect all online payment services with Fiji’s financial institutions. The National Switch will combat anti-competitive measure, reduce costs of financial delivery, reduce our dependency on cash and give consumers better access to financial systems, and we have allocated $600,000, Madam Speaker, for this purpose.
Women, children and the elderly: Madam Speaker, it should come to us as no surprise to anyone in this Parliament or to the nation that advancing the welfare of women and children is one of Government’s highest priorities. The Honourable Prime Minister has spoken out forcefully and repeatedly about the need to end the shameful and destructive violence against women and children that exists in our country, and Madam Speaker, I am sorry to say that it is not just the violence that causes shame, it is equally shameful that civilised, educated and wealthy Fijians, even good and honourable people are making excuses for it. When we excuse violence, we teach generations of Fijians to be violent and to see women and children as property to be used and abused. It is a plague, Madam Speaker, that ignores and tears away the very fabric of our society and we must unite to stop it.
Ending domestic violence, Madam Speaker, is one important part of our effort to protect and empower women and children two of the most vulnerable groups in Fiji. The Ministry of Women which oversees the mainstreaming of gender and is the primary advisory body of women and gender development issues is allocated $3.4 million for this particular aspect.
We will provide a 24-hour Domestic Violence Helpline at a cost of $170,000 to provide both emergency and non-emergency counsel and assistance to victims of abuse. This Helpline will bring domestic violence out of the shadows and let women and girls and boys know that they are not alone. It is a free call, Madam Speaker, and even a 10 year old girl can pick up the phone and get the help and protection she needs.
We will also continue to fund the Women’s Action of Plan at $1 million, the Fiji Women’s Federation at $200,000, the Fiji National Women’s Expo at $0.5 million and the Food Voucher Programme which attempts to ensure that pregnant women in rural areas receive adequate nutrition and is allocated at $0.5 million.
The Care and Protection Allowance Programme, Madam Speaker, which assists children from low income families and single parent families, prisoner dependants, children living with disabilities and children under residential care will also be funded at a substantial level, receiving $3.5 million including $300,000 for the 250 new recipients.
We have raised pensions for widows, children and other dependants of deceased members of the RFMF. Widows’ pensions will increase from 33 percent to 40 percent of a full pension and an adult dependent’s pension would increase from 12.5 percent to 40 percent.
Madam Speaker, the Government has made an allocation of $14 million, an increase of $1 million to the Social Pension Scheme for the 2016-2017 fiscal year, and the age of those who can apply for this Scheme has been lowered as an undertaking by Government from 68 years now to 66 years. It started off with 70 years and it will now be 66 years.
In total, Government Social Protection Programme has been allocated $40.7 million, which is an increase of $2.5 million. In addition to our social protection programmes, Madam Speaker, Government has allocated $0.5 million to assist lease payments for tenants who are in abject poverty or disabled and who cannot make their lease payments whether it is for iTLTB or to the Lands Department.
Madam Speaker, regulations governing the labelling of baby formula has had an unintended negative consequences for women and children. Ironically, they were intended to ensure the quality of baby formula in Fiji, but the effect has been to keep some of the best baby formula in the world out of Fiji because the manufacturers were unwilling to pay for special labelling for such a small market. We will change the labelling required, Madam Speaker, which comes into effect from tomorrow and also require however, the same time the current code extenders which will allow Fijian mothers who cannot lactate or babies who are lactose intolerant or have other problems or women who choose at some point to use formula. The code extenders, Madam Speaker, are basically the same formula that applies to the milk that mothers use in New Zealand, Australia or the United States of America.
Madam Speaker, persons with disabilities: People living with disabilities everywhere face serious obstacles in their everyday lives, but we are a developing country, and the life of people with disabilities in Fiji is probably harder than life for people with disabilities in Canada, Australia, Finland. But we do not want any of our fellow Fijians to be or accept second class status. If we seek the best for ourselves, we cannot leave any of our citizens behind because of their disability. It is up to Government representing the entire Fijian community to put forward policies that give people with disabilities the foundation to have ambitious plans, achieve and live fulfilling lives.
Madam Speaker, there is no reason why people living with disabilities cannot make real contribution to the economy and society in general, if only we can level the playing field.
Madam Speaker, perhaps the best single thing Government can do is to raise the condition of disabled and bring them into the mainstream is to encourage companies, businesses to hire them as employees to mainstream them. Therefore, we are giving a 300 percent tax deduction on wages paid to disabled employees for the first three years of employment through revision of the employment taxation system.
Madam Speaker, just to digress in our consultations, we met with a gentleman in Lautoka who works for a printery shop. He is completely deaf, completely abled bodied otherwise. He works in the printery shop, they do not pay him the same rate or salary that other people get paid who can hear, when he is sick they do not give him sick leave, they tell him, “you can leave.” We obviously need to ensure that these people are protected. We obviously want to ensure that these people who are employable are employed and we encourage them to be employed by potential employers and sometimes we need to give the carrot, and the carrot is the 300 percent tax deduction.
Madam Speaker, this will encourage employers to hire people with disabilities who are most capable and are able to carry out responsibilities and even do better than many of us, supposed able bodied Fijians. The disabled person must be given a chance to have a meaningful work. This incentive will encourage employers and also compensate them for accommodations they might need to make for disabled employees.
Madam Speaker, Government has launched a number of initiatives for the disabled including the subsidised bus fare concession which fully waives bus fares for persons living with disabilities. Currently, 2,419 individuals benefit from this. Grants are also provided to voluntary organisations through the Ministry of Women, Children and Poverty Alleviation and the Fiji National Council for Disabled Persons. These organisations support the blind and hearing impaired, person with learning disabilities and the physically disabled.
The Rights of Persons with Disability Bill is currently before Parliament which captures the most significant features of the UN Convention on the Rights of Persons with Disabilities which Fiji has signed but has yet to ratify. We are in fact ahead of this Bill in a very practical sense. Madam Speaker, we will allocate $1.6 million to fund NGOs that support the disabled such as the Spinal Injury Association, Fiji Association of the Deaf, United Blind PErsons of Fiji and the Fiji Disabled People’s Federation and others.
Madam Speaker, the disabled persons in the Western Division do not have a central place to go to as we have in Brown Street in Suva. This facility, Madam Speaker, will cater for persons with disabilities in the Western Division. It would be ready by September of this year. Government would also, Madam Speaker, provide for a new bus for the those disabled persons in the Western Division. At the moment they do not have any form of transportation. When they want to have their meetings, they cannot get together; when they want to have training, they cannot get together; when they want to get a wheelchair, they have to come specifically each time to get a wheelchair from Suva. This will also provide them with some storage facilities.
Madam Speaker, as highlighted, the facility in Lautoka will allow disabled persons in the Western Division to conduct trainings, meetings and store equipment. Government will also pay for the vocational teachers in Suva who are currently being paid as volunteers. There is a wonderful vocational training course and only three of the teachers who are currently paid by the Ministry of Education, Government will pick up the other six or eight teachers who are qualified to take these courses.
Madam Speaker, the Land Transport regulations will also be amended, and the Honourable Minister responsible for Transport will be doing that very soon, where we will make an amendment to the regulation that the first two row of seats must always be reserved for disabled persons. Of course, if there is no disabled person in the bus, than an able bodied person can sit there, but should they come on board, then we have to move away, and give them that right to sit there. This, of course, will be put in place in regulations from tomorrow.
Madam Speaker, of course as you have said that with this broadcast today, we have a sign language interpreter and we are also working behind the scenes with the International Telecommunication Union and other partners to ensure that sign language or other forms of messaging becomes available in our television in the future. Of course, this comes on the back with the fact that we are now carrying a digital television works and which will make it lot easier to do so.
We are also working with FRA and Municipal Councils throughout the country to retrofit public toilet facilities to accommodate the disabled and also retrofit many of the footpaths that we see that does not have a ramp. Many of the footpaths were built years ago and they do not have wheelchair access.
Madam Speaker, revenue collection capacity and tax incentives: All of these expenditures cannot be possible without tax revenue and our ability to obtain funds we need to build this country. To stay in that path for a future that is prosperous, free, sustainable and fulfilling depends on both the Government and the people. Government must do a better job of collecting taxes that requires a combination of improved services to the taxpayer, a growing economy that broadens the tax base and better enforcement of tax laws.
Unfortunately, Madam Speaker, though, not every Fijian pays his or her taxes gladly. When someone avoids paying taxes altogether, while reaping the rewards of assistance and enjoying the protections and programmes funded by public funds by the taxpayers who actually do pay the taxes. Indeed, many interested parties publicly always blame taxes for the increased taxes, we will find so much lower compared to other countries. Yet, these very people who complained are the ones who do not want to reduce the exorbitant margins or give up the exclusivity, if they do not understand finance at all and the need to provide for all Fijians.
Madam Speaker, revenue collection increased notably after we reviewed and began reforming our collection mechanisms in 2013. In 2015, Madam Speaker, the total projected revenue collection stood at $2.8 billion around 30.7 percent of GDP. Last year, we changed the tax code to lower VAT and import duties on a number of items and we warned retailers, Madam Speaker, that we would find, and if necessary prosecute anyone who did not pass the lower VAT on to the customers. As of today, FRCA has completed 32 cases and collected fines of amounting to $700,000 mostly from supermarkets, a cinema company, book stores, restaurants and car dealers who did not pass on the VAT reduction to their fines to their customers and they were all been fined and they have all paid up.
In the next fiscal year, Madam Speaker, we will focus our reform efforts on putting in place simple streamline and Ministry processes and doing a better job of assisting taxpayers. Processing applications for investment projects and recovering outstanding taxes. Machines linked to cash registers as highlighted last year to monitor retail sales will be deployed this year and will combat internal fraud. We will implement data warehousing and accommodate taxpayer and Government needs and improve access to services through e-processing.
Madam Speaker, as we become more efficient in collecting revenue, we also must become better to be able to use tax policy to improve people’s lives and encourage healthy lifestyles, ensure greater equality and create more opportunity. We have mentioned the tax break for employers who hired persons with disabilities but we have proposed a number of other measures that will make a real difference in people’s lives.
Government is also proposing to arrange new revenue policies that lower some duties and excise taxes to prioritise areas of development, wider the tax base to fund government initiatives and provide incentives to limit carbon emissions, improve public health and employ disadvantaged groups. The World Customs Organisation has recommended changes in the harmonised system are faced most recent periodic review, and I will be bringing a Bill to Parliament later this year to make those changes and this needs to be implemented by 1st January, 2017, Madam Speaker.
In order to allow Fijians to have cheaper, cleaner running vehicles and to reduce our carbon footprint to meet Fiji’s global commitment, all new hybrid vehicles will continue to attract zero duty for the next two years. However, with effect from 1st January, 2017, second-hand hybrid vehicles will attract a modest duty increase as of engine size. Six months’ time therefore, Madam Speaker, is due from now until the end of the year for all those Fijian who would take advantage of this reduction if they are interested in purchasing second-hand hybrid vehicles.
Furthermore, Madam Speaker, as we know, the markup on vehicle has been very high. We have discovered that vehicles that land in Fiji at the cost of about $8,000 are actually sold in the market to ordinary Fijians at about $22,000. The markup is about $15,000, $20,000 or $10,000 on a vehicle.
So whilst we are foregoing duty in the hope that the price for the consumer will be reduced, the business people, the importers are actually jacking up their margins. So in order to address these issues, Madam Speaker, FRCA from August of this year will start publicising through the media the prices at which vehicles are landed in Fiji and at the price at which they are sold, for all the companies. So then the consumers will be able to know which company is charging what mark-up and they can make their choice.
Unfortunately, Madam Speaker, it will take up FRCA’s resources but it would also mean that we will hopefully can get better pricing and better margins being pushed for the benefit of the consumers in Fiji.
Madam Speaker, but we also need, if we want to go the electric way, we need to build an infrastructure to support those electric vehicles. So equipment for charging stations will also enter duty free. Charging station businesses will enjoy a seven year tax holiday and be able to carry forward 8 years of losses. There are also eligible for rebate to 5 percent on investment of $3 million or more and 7 percent on $10 million or more, Madam Speaker.
Madam Speaker, alcohol and tobacco are major factors in the prevalence of noncommunicable diseases in Fiji, as is overconsumption of sugar, sweetened drinks which can be linked directly to obesity and diabetes. In order to reduce consumption of these products and help improve the health of Fijians, Government is increasing the physical and import excise tax on alcohol and tobacco products by 15 percent. I believe that we can stick to this rate for the next three years. We have received many request from the private sector and NGOs to help Fijians control the intake of sugary beverages. So the excise tax is being increased by 20 cents per litre.
Madam Speaker, because of the rationalisation of our taxation regime and now because we have a better arrangement framework for the fair reporting credit, the credit card levy will now be eliminated to simplify the taxation system.
Madam Speaker, regarding capacity building and salaries: Madam Speaker, the nation here becoming requires us to step up to a game, to invest in the people we need to deliver services; to build infrastructure and to generally improve the quality of life in Fiji. Our Civil Service is improving rapidly as we set high standards and provide our Civil Service with the guidance, structure and training they need to do their jobs well. While we carry out a Civil Service Reform we are also putting into place regulations and procedures that will improve the checks and balances in management and compliance with Ministries standards for disbursements.
Madam Speaker, Government will provide $90,000 to professional and trade bodies such as the Architectural Organisations, Engineers, Builders and even Hairdresser Organisations to help them develop capacity, professionalism and high professional standards. We expect these organisations, Madam Speaker, at the same time to be accountable, keep proper records, hold regular elections and meetings, and we will seek to engage with more associations in the coming years that meet the standards.
Madam Speaker, we are also introducing major improvements in the terms and conditions of Government employed doctors. In order to improve efficiency, the budgetary allocation and the responsibility for the administration of these doctors will now be transferred to the Ministry of Civil Service, pending the completion of the Civil Service Reform in the Ministry of Health. There are a number of works on foot that we need to address, Madam Speaker.
Madam Speaker, at the same time, we are giving a healthy pay rise increase to Government employed doctors in order to attract and retain talented doctors and reward them fairly for their skills and services. The increase salary ranges from 56 percent to 81 percent, depending on the specialised area of practice which should give everyone an idea of just how underpaid they work.
We would also pay for the postgraduate studies, Madam Speaker, at FNU (Fiji National University), in order to help them stay abreast of their advances in medicine and ensure that the public gets the most advanced care possible in Fiji. The current on call race, Madam Speaker, for doctors is being there for a while which is now being completed changed with this announcement, used to be about $12 for the whole night. Locals, Madam Speaker, were not allowed, but locals were actually available.
So, Madam Speaker, an allocation of $40 million has been set aside to meet doctor’s salaries. We also believe there is an opportunity for a lot more collaboration and synergy between what we call ‘public doctors and private doctors.’ Indeed, Madam Speaker, we hope to in the next few months calling further consultation, merge the two professional Medical Associations. One is the Fiji College of General Practitioners which is only the private sector doctors and the Fiji Medical Association, which is only the public health doctors.
There is no reason as to why this should not be merged. There is no reason as to why private sector doctors cannot, for example, come in and serve for three to four hours in the peak period in the public hospital. All of these is possible, Madam Speaker, and this part and puzzle of the review process that is taking place.
Madam Speaker, also we set aside $250,000 to set up and open a transparent complaint system and create a mechanism for any Fijian to seek resolution of complaints about the treatment by any medical or health institution.
Madam Speaker, this will give you a direct hotline to them, they are able to pick up phones whether the nurse may be talking to them in a rude manner or whether it is a complaint about a particular service of a doctor or whether it is anything to do with the health service. We, then Madam Speaker, expect to extend these complaints protocol systems that we put in place to another, what we call “high public impact areas” of Government services.
Madam Speaker, we will continue to help the iTaukei landowners become land developers. If they choose the wherewithal to install basic infrastructures such as water, sewerage, electricity on the land that they plan to lease and even become partners in that development whether residential, commercial or light industrial, Madam Speaker. This allows landowners to add value to their property, negotiate it for better lease terms and become partners in the development of their land throughout as passive lease holders, rather than simply holding assets but without cash. The Government, Madam Speaker, has further and continues to allocate $10 million for this purpose. Four projects have already been approved, Madam Speaker, and works has already started in Wairabetia, Saweni, Vuda and Yadua from Nadroga and we hope to identify more in the next few weeks, there is a few more in the Central Division.
Madam Speaker, in the wake of TC Winston, a number of people who experienced difficulties in complying with the requirements under the Land Sales Act sought extension for compliance because of the inability to build because of Cyclone Winston. In order to address these concerns, we will amend the law by establishing a review committee to assess the non-resident owners request for extensions in relation to the requirement to build on the land within two years. Madam Speaker, $25,000 has also been allocated for monetary compliance with the Act and to ensure that the land is being utilised.
The Human Rights and Anti-Discrimination Commission is funded at $1.5 million – an increase of $30,000. This will allow the Human Rights and Anti-Discrimination Commission to receive and investigate more complaints from the general public. This was seen in the Budget consultations that we held in particular with persons with disabilities.
The Accountability and Transparency Commission will receive an allocation of $635,000, Madam Speaker, and we look forward to the Standing Committee reporting the Information Bill and the Code Of Conduct Bill. The Information Bill, 2016 gives effects to the right of access of official information which is a clear indication of the Government’s commitment to open governance and the core principles of democracy, human rights and of course transparency. The Code Of Conduct Bill, Madam Speaker, provides the codes which must be complied with by those in public offices to ensure the proper conduct of those in public service and the protection of public interest.
Madam Speaker, FICAC has proven itself to be capable and scrupulously independent in pursuing cases of corruption. For instance, it has instituted proceedings in court only recently against an Australian company called Prime Fiji Limited that was contracted by FRA to source street lighting. Success not only roots out corruption that has occurred, they uphold the principles that dishonesty will not be tolerated by us and that gives people faith to trust our legal system, work hard and invest. It is funded with $8.5 million, Madam Speaker.
Madam Speaker, a modern country needs an equally modern Police Force, one that protects and serves the community. We must equip our Police and give them the technology, equipment and trained, they need keep us safe. The Fiji Police Force will receive an allocation of $131.7 million – an increase of $5.5 million. Madam Speaker, we have also increased the salaries for Special Constables by 20 percent. Their pay was set based on unrealistic assumptions about how much they would work and what they would be required to do. Over the years these Special Constables were supposed to work on a part time basis in basic policing have acted as full time Constables and they should be paid accordingly.
So Special Constables and Sergeants’ payment rise from $5.17 and hour to $6.85 an hour. Corporals paid from $4.95 to $5.19 an hour and Constables from $4.05 to $4.86 an hour. Madam Speaker, we’re also increasing pay for civilian Police Force employees and for the senior levels of the Police to levels that commensurate with their duties and responsibilities.
Madam Speaker, in one of the concluding areas, now I would like to say that we all know that all of us in this room including all Fijians who are watching us tonight love sports. We will celebrate the national holiday dedicated to sports in less than two days’ time and Fiji is also an international destination, people love to come here and we are fast becoming an international sports destination. We will once again host the Fiji International Golf Tournament in Natadola and we just finished hosting the Pacific Islands and Australian Tournament in weightlifting and swimming. In a few days we will host the Crusaders versus Chiefs. Indeed hosting such events or meets not only provides exposure to our athletes and our youths, but it also has a multiplier effect on our economy. As an example, the President of the International Weightlifting Federation who was here recently for the Oceania Weightlifting Competition was so impressed with our country, our organisation and our facilities that he is now talking to our equivalent organisation in Fiji, the Weightlifting Association about hosting the World Weightlifting Championship in 2018. Madam Speaker, we have budgeted $1.9 million to host various other international and regional meets in the 2016/2017 Budget.
Madam Speaker, we will watch our main Sevens Team and our Fijiana team compete for gold along with our athletes in football, archery, judo, shooting, table tennis and weightlifting at the Olympics in Rio. Our athletes do not need an extra incentive to go for gold but we think they might appreciate a reward. So we have set aside funds for cash reward up to $30,000 to any Olympian who brings home a medal, just to show how their country appreciates their dedication, Madam Speaker, a total of $0.5 million has been set aside for this incentive.
Madam Speaker, I could not end this presentation on a more positive note than to wish our Olympians great success in Rio de Janeiro for their fellow Fijians who will be following their every moves for the glory of their country and for themselves. It takes great dedication, Madam Speaker, and sacrifice to be an Olympian and a medal or not that is worthy of our respect and the remuneration.
Madam Speaker, we dedicate ourselves to building a Fiji that gives everyone the right to work to be an Olympian or whatever his or her ambition is. I say ambition and not dream, Madam Speaker, Fijians are and must be doers not simply dreamers. The Government will do all it can to create and maintain a Fiji where anyone of good faith and character who preserves can achieve his or her goal.
Madam Speaker, as I mentioned earlier, I do not want to take a lot of time, we have the Budget details publicly available on our website, we have gone out specifically and printed, as I said earlier on, specific expenditure requirements under the four sectors is available for members of the public outside the room. When you step out it will be available on our webpage and also on Facebook, Madam Speaker. And of course, the entire Budget Estimates, Madam Speaker, will also be available online as it was available last year and we will also be placing inserts of these expenditure costs to go out to members of the public in the Fiji Sun.
Madam Speaker, I also note, tonight there is an important State of Origins rugby match, so I do not want to eat into people’s prime time television. Accordingly, Madam Speaker, to summarise, this Budget is focused on broadening our economic base and Government at the same time is committed to creating more opportunities in the education labour sectors, in particular for our youths and not forgetting our elderly and of course our disabled.
Madam Speaker, as a result of that, if you look at our budget spent, we have stuck to the formula that has worked well and that is 40 percent of the amount money that we are spending in this Budget goes towards capital investment and 60 percent goes to operational costs. If you were to go back to 2005, Madam Speaker, the mix was 85:15, now there is 15 for capital expenditure, 85 for operational. What are we doing, Madam Speaker, of course is building for the future. We are building for our youth, we are building for our young people, we are building for our people who are disabled and our women and children.
So Madam Speaker, it is with great pleasure that I hereby commend the 2016-2017 Budget to this Parliament with the approval of Cabinet. Vinaka, thank you.