Repúblika | Nov/Dec 2013 | 2014 National Budget special

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BUDGET 2014 SPECIAL

EDUCATION

REVOLUTION n 19% of expenditure on edcation sector n ‘No child left behind policy for smarter Fiji’ n New schools and scholarship scheme

PRIORITY SECTORS EDUCATION Education will be a major priority for government in 2014, with $541.5m allocated for the sector. The fee grant to all primary and secondary schools (excluding 21 privately run schools) is aimed at a fee-free childhood education.

Primary school fee grant: $250 per child per year.

Secondary: Year 9 & 10 - $440; Year 11 & 12 - $485; Year 13 - $610.

Scholarships: $26m Tertiary Education Loan Scheme: $52.5m ($40m for new scheme)

Vocational training: $5m Bus fare assistance: $20.8m New funding model for institutions: $80.8m - USP, FNU, UniFiji, Centre for Appropriate Technology Development, Corpus Christi, Montfort Boys Town, Fulton College, Sangam Institute of Technology and Vivekananda Technical College.

New campuses/schools: New FNU Labasa campus - $3m, New FNU Navua campus - $2.5m, Bau Central College - $1.3m, St Francis, Nakorotubu, Ratu Lalabalavu - $0.7m

HEALTH Upgrading of hospitals and health centres a major focus. These major investments aim to decentralise and improve accessibility to health services 200 more nurses, 155 more doctors: $10m CWM Hospital operating theatre: $4.9m CWMH maternity unit extension: $3m Upgrade Lautoka Hospital: $5.9m Sigatoka Hospital extension: $1m Upgrade

Valelevu and Keiyasi health centres: $1m Relocation Naulu health centre: $0.25m New hospitals: Ba - $7.9m, Low Risk Makoi Maternity Unit $0.6m, Nausori Hospital - $2m Vaccines: $3.5m Consumables & laboratories: $3 Dental equipment urban & sub-divisional hospitals: $0.4m Bio-medical equipment for urban & sub-divisional hospitals: $4.75m

PUBLIC UTILITIES Fiji Roads Authority: $474.1m Major road projects: renewal and replacement - $90.9m, bridge renewals $50m, rural roads upgrade - $15m, Nakasi-Nausori four-lane project - $10m, Nadi four-lane project $10m, Jetties maintenance - $8.9m,

Nabouwalu-Dreketi upgrade $74.9m, Sigatoka-Serea upgrade - $27m, Buca Bay-Moto improvement - $22m Water Authority of Fiji: $139.6m Extension of power grid along King’s Highway from Tavua to Korovou: $9.4m Rural electrification project: $10m Somosomo hydro project: $1.3m

AGRICULTURE Sugar Ministry: $19.9m Upgrade of cane access roads: $2m Kavanagasau bridge: $0.6m Agriculture Ministry: $62.4m Food security programme:

FISHERIES More emphasis to deter illegal, unregulated and unreported fishing (IUU) activities.

Coastal fisheries: $0.6m. Completion of multi-species hatchery in Ra: $0.5m Seaweed development, pearl and oyster production, freshwater aquaculture, brackish water, and mariculture $2.2m Ice plant in Gau $0.6m

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$1m Export promotion programme: $1m Fertiliser subsidy for non-sugar farmers: $1m Agriculture scholarships: $1m

MINING A total of five new mining permits are now in place: Viti Mining Limited, Vatukoula gold mine, Xinfa-Aurum bauxite mine, Wainivesi zinc mine and Amex iron sands mine. At September 2013, a total of 74 exploration licenses were issued, compared to 60 in 2012. This also includes 16 exploration licenses for deep sea mining.

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2014 ELECTIONS $15m to cater for ongoing prepatory works for 2014 general election. In addition, Parliament office has been provided with $7.1m to provide secretariat support and services in order to perform its functions.

LAW AND ORDER Budgetary provisions for the major law enforcement agencies have increased by $82.2m. Fiji Police Force: $111.8m Fiji Military Forces: $94.2m Fiji Corrections Service: $35.7m Construction of detention centre: $0.45m Legal Aid Commission $4.4m Upgrading existing court complexes $2m New Nasinu courthouse $0.5m Extension of Lautoka High Court $5m Rural and small town court services $0.5m Relocation of Ba Magistrates Court $0.3m Island Court Sittings $0.3m DPP $5.5m Ministry of Justice $4.9m Small Claims Tribunal $0.89m Peacekeeping missions $71m

GOOD GOVERNANCE & ACCOUNTABILITY Auditor General’s office $4.02m Human Rights and Anti-Discrimination Commission $0.55m Accountability and Transparency $0.64m Freedom of Information $0.1m Fiji Independent Commission Against Corruption $8.6m

YOUTH & SPORT Engagement of coachs $2m Youth Capacity Building and Training Programme $0.6m Sports grant $1.1m Infrastructure upgrading at Naleba, Naqere, NYTC, Yavitu Training Centre and National Youth Band Centre $0.765m

HOUSING City-wide squatter upgrading project $0.5m Squatter upgrading & resettlement $2m Lagilagi housing development project $3m Town-wide informal settlement upgrading project $1m Public Rental Board - Kalabu and Savusavu $4m Sustainable income generating project $0.7m Housing Authority social housing policy $1m PRB subsidy $1m Direct payments Exim Bank China PRB $10m, HA - $12m Housing Assistance for first home buyers $10m

November/December 2013

BUDGET 2014

A people’s budget ‘The people of Fiji must be taught that they deserve a Government that serves them. Not them serving the Government.’ ~ Bainimarama WHAT’S GONE UP n Airport Departure Tax from $150 to $200 n Increase excise duty on tobacco and alcohol by 10%. n Imported CD duty increase from $1 to $2

WHAT’S GONE DOWN n Corporate tax rate for SPSElisted companies from 18.5% to 10% n Duty on food supplements, baby bottles, adult sanitary diapers from 32% to 0%. n Duty reduced to 0% on importation of spare parts for maritime vessels, agricultural items, n Duty on prefabricated kit home products reduced from 32% to 3%

Budget aims to build a smarter Fiji Prime Minister Commodore Voreqe Bainimarama’s 2014 budget prioritises education with almost 19% of expenditure on the sector.

“E

ducation is the greatest investment a nation can make in its future, and we cannot shortchange our future. Everyone benefits when we fully commit to the education of our children.

Education produces a competent and competitive workforce, a responsible citizenry, and people who will do everything from build our homes to cure our illnesses.

I am pleased to announce that education in the 2014 Budget takes up the largest share of Government spending – nearly 19 percent of the total Budget – and receives the largest share of the additional allocations. A total of $541.5 million is budgeted for the Education Sector.

And it involves major initiatives in primary, secondary and tertiary education that will radically overhaul the manner in which we educate our people.

For too long, we have talked about

November/December 2013

making education more accessible, especially for those from poorer families.

But unlike our wealthier neighbours, Fiji has never had truly free education for all children. Many parents have had to live through the anguish and uncertainty of how to get their children through primary school, let alone secondary school and a tertiary education.

But all that is about to change.

Ladies and Gentlemen, it gives me great pleasure to announce that for the first time in our nation’s history, my Government will provide truly free primary and secondary school education for all Fijian children. No child will be left behind. And no Fijian parent will ever go to bed again worrying about how they will meet their children’s school fees or any other fees. And far more children will now be able to go on to secondary school and tertiary education than at any other time in our history It is not only the right thing to do.

We are now obliged to do so under our new Constitution. And each tier of the education system is set to benefit from our massive investment in the future of our children and our nation.”

WHAT’S NEW n 150% tax deduction for voluntary cash contribution by businesses from $10,000 to $100,000 towards a disaster fund. n Income tax exemptions for backpacker operators with annual sales turnover less than $1m. n Expansion of Tavua to Korovou tax free region to include other commercial activities along with dairy and agriculture. Sunset clause extended from 2014 to 2018. n 150% tax deduction for sponsorship between $100,000 and $200,000 towards hiring of international sporting coaches. n Seven-year tax holiday for shipping companies servicing uneconomical routes. Ring-fence uneconomical routes to include Lau group and Rotuma. n Waive withholding and capital gains taxes on interest income to investors of Unit Trusts.

Increase SME tax exemption threshold from $300,000 to $500,000. n Citizens over 55 years and pensioners are exempted from resident withholding tax on interest income of up to $16,000 from bank deposits provided this is their only source of income. n Introduce new excise duty of $1 for locally produced CDS. n Duty exemption on the importation of raw materials and equipment used for the establishment used for the establishment of a backpacker hotel. n Allowable quantity of cigarettes to be purchased at duty free shops will be reduced from 250 grams to 200 grams. The minimum age for persons eligible to purchase cigarettes from duty free shops to be increased from 17 years to 18 years. n Duty concession on importation of household effects and vehicles by returning residents.

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BUDGET 2014

STATE OF THE NATION

$m

GROWTH RATE GROWTH RATE

%

6 6 4 4 2 2 % %0 0 -2 -2 -4 -4 GROWTH RATE GROWTH GROWTHRATE RATE -6 -6 6 6 -8 6-8 4 4 4 2 00 01 01 0202 0303 0404 0505 0606 0707 0808 0909 10 10 11 1112 1213 13 14 14 15 15 16 16 2 00 rev rev proj est est for for for 0% 0 2 rev rev proj est est for for for 0 % -2 Budget Actual -2 Budget Actual -2 -4 -4 -4 -6 -6 -6 -8 -8 -8

00 01 02 03 04 05 06 07 08 09 10 1110 12 13 13 14 14 15 16 00 08 09 1111 12 0001 0102 0203 0304 0405 0506 0607 07rev 08rev 09rev 10proj 12 for 13 for 1415 151616 est est est for for rev proj est for for rev

n The government debt estimate up to September 2013 is $3,718.10 million. n It is projected to be 48.3% of gdp in 2014 and forecasted at 47.3% of gdp and 45.9% of gdp for 2015 and 2016 respectively.

Estimated revenue

$2,721.8m

Estimated expenditure

$2,883.3m

Estimated net deficit As a % of GDP

$161.5m 1.9%

%

rev proj

Budget Budget

est

est

for

for

Actual Actual

for

Actual n 2014 = 3% (2013 Revised BudgetBudget = 3.6 %) n Real gdp GOVERNMENT EXPENDITURE GOVERNMENT EXPENDITURE forecast of $4,848 million in 2014. n Tourist arrivals of 60% 60% 694,016 (2013 revised – 673,802) and sugar export of 189,100 50% 50% tonnes expected for 2014 (2013 175,100 tonnes).

40% 40%

%% 30%

30% GOVERNMENT EXPENDITURE 20% GOVERNMENT EXPENDITURE 20% GOVERNMENT EXPENDITURE 10%10% 60% 60% 60% 0%00 01 01 0202 0303 0404 0505 06060707 0808 0909 10 1011 1112 1213 1314 14 15 1516 16 50% 50% 0%00 50% 40% 40% %% 40% 30% 30% 30% 20% 20% Wages & salaries Interest Wages, salaries andand interest 20% Wages & salaries Interest Wages, salaries interest 10% 10% 10% 0%00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 0%00 0% 0406 05 07 06 08 0709 0810 09 11 10 1211 13 12 14 13 15 14 16 15 16 0100 0201 0302 040305

Wages & salaries Wages & salaries Wages & salaries

Interest InterestInterest

Wages, salaries and interest Wages, salaries and interest Wages, salaries and interest

n The gross deficit for 2014 is projected at $385 million and n The wages, salaries and interest component of total the net deficit for 2014 is budgeted at $161 million or 1.9% of government expenditure is expected to be 37% for 2014 then nominal gdp. In comparison, the initial forecasted 2013 net increase to 44% and 45% in 2015 and 2016, respectively. deficit of $219 million has been revised to $275 million.

A win for consumers: council

By PREMILA KUMAR Consumer Council of Fiji Chief Executive Officer

T

he 2014 National Budget is a ‘winning budget’ for consumers. The Consumer Council of Fiji is particularly happy with the two key policy announcements by the Government that would address some problem areas for consumers.

One is the establishment of the Consumer Compensation Tribunal and second is the establishment of a taskforce to monitor prices of duty-reduced items.

The Consumer Compensation Tribunal will adjudicate over claims on third party insurance and other consumer complaints.

The price monitoring taskforce which is to be formed in few weeks time will be monitoring prices of prod4

ucts that have had duty reductions.

The Council has long argued that duty reductions often do not translate into lower retail prices for consumers. The Council also welcomes various other initiatives announced in the Budget to assist consumers to cope with the rising cost of living.

The biggest win is Government providing ‘free education’ for all children in both primary and secondary schools.

With this, parents will no longer have to worry about education costs which they used to bear in the past . They do not have to spend on school fees, tuition fees or any other fees.

Parents and guardians will be under less pressure with the Government’s policy on fundraising.

The Council is happy that the bus fare scheme, which has received extra funding from the Government, would mean more eligible students will be

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able to benefit. The Council also applauds the pay increases for the civil servants – this yet again means less pressure on their pockets and more money to spend.This is not only positive for these consumers but for businesses as well.

The Council overwhelmingly welcomes zero per cent duty reduction (from 32 per cent) on food supplements, baby bottles and adult sanitary diapers. Among other initiatives, support has also been provided to shipping operators in the uneconomical routes.

The Council believes this will benefit consumers in the outer islands.

The Council is encouraging consumers to make use of these initiatives to bring about a change in their living standard. We also remind them to continue exercising prudent financial management when spending their money.

November/December 2013