Poverty and Destitution

Fr Kevin J. Barr

It was of great concern to learn that the Ministry for Social Welfare plans to remove over 3,000 recipients of the Family Assistance Programme (FAP). The Permanent Secretary, Mr Govind Sami, was reported as saying that they were disqualified on the grounds that they “were no longer eligible to receive welfare assistance” as per the existing social welfare criteria.

It is important to note that the recent positive statements of the World Bank Social Protection Team concerning the administration of the FAP were based (a) on those existing criteria, and (b) on the current allocation of government for the scheme.

However it is very important to clarify a number of important issues which constantly cloud discussions about poverty in Fiji:

• Recent reports based on the 2007-8 Housing Income and Expenditure Survey indicated that roughly 32 - 35% of our population was in absolute poverty. This means that at least one third of our total population are unable to meet their basic needs of nutritious food, proper housing, health care and education. Another way of putting it is that a third of our population have incomes below the current established poverty line (income poverty). In addition others may not have access to proper education, health care, transport, and markets for their produce (poverty of access).

• Moreover everyone seems to have forgotten that, since the data was analysed from the 2007-2008 Housing Income and Expenditure Survey, we are living in the aftermath of two recent disasters for the poorer section of our nation. The first - the 20% devaluation of the Fiji dollar in 2009 - meant that the purchasing power of existing low wages decreased because food increased by 36% and building costs by 29%. The second was the increase in VAT from 12.5% to 15% in 2010. Being a regressive tax it had serious effects on poor and low income families. Everyone seems to gloss over these disasters as though it is all “water under the bridge” and no harm done. But a lot of harm has been done to the quality of life of poorer people in the nation and nothing in the recent budget really addresses the effects of these disasters on the 71% of those earning incomes below the tax threshold of $15,600.

• For many years Government has a “Family Assistance Programme” (FAP) for those extremely poor people who are in desperate situations. It is administered by the Ministry for Social Welfare and covers about 22,000+ people or about 3%-4% of the total population. It used to be called the “Destitute Allowance” because, in reality, it covers those who are destitute or the worst cases of those in absolute poverty. The allowance is given according to very strict criteria – single mothers, those with serious disabilities, the elderly without other means of income, those whose husbands are in prison etc. They may receive monthly payments of between $60 and $100 a month as well as special assistance at hospitals and are now eligible for $30 worth of food stamps.

• It is extremely important to note that the Family Assistance Programme (FAP) does not cover all those in absolute poverty – only those considered to be the worst cases of those in absolute poverty (or some of the poorest of the poor). Of the 35% of those said to be in poverty in Fiji, the programme covers only 3%-4% of the population. The other 31%-32% is not covered. In addition some very serious cases who may be on the long waiting list for FAP may now benefit from the food stamp program.

• The recent World Bank study said that the FAS was well administered by the Social Welfare Department and successfully reached 72% of its target group. In other words 72% of those on FAS were truly destitute and met the strict criteria demanded by the scheme. Unfortunately this was interpreted by some senior officials as meaning that the other 28% were not poor and should be excluded from assistance. But the Report did not say this. In fact they were poor but did not fit the strict criteria of the scheme because of various changes in their family circumstances. On those grounds perhaps some could be excluded.

• At least four previous reports on the FAP had pointed out that:

1. The criteria applied for the FAP were far too narrow and needed to be broadened to include other categories of people who were destitute;
2. The allowance provided was “totally inadequate” to meet the needs of the recipients (and consequently required additional assistance from other sources);
3. Government needed to increase its budgetary allocation for the programme because the allowance was so small and there were so many on the waiting list.

• The 2011 budget did provide an additional $30 in food stamps for those on the FAP as well as some other serious cases on the waiting list. However for some time (a) not every recipient of FAP received the promised food stamps; (b) some of those who did receive food stamps found that their basic monthly allowance was decreased because they were receiving food stamps (yet the food stamps were supposed to be additional to the allowance).

• We know that a lot of effort is put into trying to set up small business enterprises for those on the FAF and so help them “walk out of poverty”.

These have been laudable efforts but past reports have shown that a high percentage (up to 90%) ultimately fail and very few actually get out of poverty. But, at least, they have tried. Even the recent studies of the Grammeen Bank have shown that so many laudable efforts to get poor people into small business enterprises have ultimately failed. So, of course, we don’t give up but we should realise that this is not the panacea it has often been made out to be.

Unfortunately when the National Budget and some other government Ministries talk about poverty alleviation and the poor they think mainly about those covered by Social Welfare (the 3%-4%) and not the whole 35% of those in the country who are living in absolute poverty and cannot meet their basic needs. Many of them are in full-time employment but are earning wages well below the poverty line. They are often referred to as the “working poor”.

The vast majority of those who are poor hardly feature in our economic planning even though they are a huge percentage of our population. They need better incomes, reasonable food prices and better, more affordable housing. To this end I suggest that VAT needs to be removed from all food (except luxury foods and food bought in restaurants). Also housing needs to be subsidised in varying degrees for those earning below the tax threshold and the $10m allocated for first home owners needs to be restricted to low income earners – those earning below $10,000 or at least $15.600.