Friday, November 30, 2012

News and Comments Friday 30 November 2012

Daniel Urai
UNION TO FORM  POLITICAL PARTY. The news that the Fiji Trade Union Congress will disassociate itself from the Fiji Labour Party, the party it helped found in 1985, and form its own political party for the 2014 election, comes as no surprise. Nor does the reaction of the FLP's Mahendra Chaudhry  who dismissed the news as "basically the creation of the two unionists, and they do not even represent Fiji's union movement." Although, with the FLP almost a Chaudhry family affair, this does seem to be a little like the pot calling the kettle black.


FTUC President, Daniel Urai told ABC's Pacific Beat on Tuesday that the FLP has betrayed its foundation values and "has seemed more like only looking after one ethnic group and just one group of farming community."



Urai denies he is giving the Bainimarama government legitimacy by forming a party to stand at the 2014 elections. He says he and his supporters are "between the devil and the deep blue sea ...You don't partake, things still move on  ... if we partake, then we may be able to have some say in the formation of the next government."


The name and office holders of the new party will be announced in around two weeks time.



BUS CARDS FOR ELDERLY AND DISABLED. Over 30,000 identification cards have been distributed since March 2011 to individuals with disabilities and the elderly  according to the Ministry of Social Welfare, Women and Poverty Alleviation.The disabilities have red IDs that entitles them to free bus travel and the elderly over 60 have yellow ones that entitles them to a 50% discount. Both groups can also get a 20% discount for the first 20 kilometres if they travel in taxis."



The Ministry's Permanent Secretary Govind Sami said the allocation in next year's budget will

permit them them distribute more IDs to those who are yet to receive the cards. He commended government for its $11million allocation in the 2013 budget.



POVERTY BENEFIT SCHEME. In April next year a new Poverty Benefit Scheme (PBS)  will replace the Family Assistance (FA) scheme to benefit 13,000 of the poorest households in the country. The Social Welfare ministry says the existing food voucher scheme is poorly utilised, and with welfare covering all family assistance recipients, they are only able to assist 2000 people.



The new expanded food voucher program will target three groups: those over 70 years, children attending schools in rural areas, and pregnant mothers using rural stations.



All current social welfare recipients will continue to receive assistance but the new scheme will target households with a maximum of four members. Maximum payment will be $150 inclusive of a $30 food voucher, and able-bodied individuals in the households will undergo some skill training to help "graduate the family out of the system."


MORE HOME LOANS WRITTEN OFF. Nineteen families from the central and northern divisions have had their home loan accounts written off as part of the Housing Authority's new social housing policy that applies to H.A. homeowners who have paid one and a half of the principal loan amount, are unemployed because of advanced age or disability, and can prove genuine financial difficulty. To date, some 239 families have benefited from the scheme.



NEW DEVELOPMENTS FOR NAUSORI. The market and service town of Nausori was the fourth town, after Levuka (1879). Suva (1881), and Lautoka (1929), to be incorporated as a town in 1931. Today's population is about 6,000 with a further 16,000 in the surrounding urban area.


Located at the eastern end of the so-called Suva-Nausori corridor, it has not seen the development that one might have expected from its early start. But three impending developments could see this start to change.



First, is the significant upgrading of King's Road that should see greater investment in farming and tourism in eastern Viti Levu. Second is the planned doubling in size of the Nausori market that will cater for over 1,200 vendors (presently 770). Government has allocated $1.5m for the development over the next two years, and the Town Council will contribute $6 million from bank loans.



Airport upgrade

The third development is the start of the ten-year upgrade of Nausori airport. The first phase of the upgrade is expected to be worth $20.7million, and will involve improving the operational safety of the current runway at the airport. This will entail widening the runway, strengthening the adjacent grass runway strip, building internationally required runway end safety areas, and installing approach lighting to allow for night time operations.



In stage two a new international terminal is to be built on a site where the hangars are now

located to provide much improved passenger services. The present terminal will then be refurbished for domestic commercial use and private jets. Stage two will also include the construction of a new control tower.



An extension to the runway from its present 1,868m to 2,300m that will be long enough to accommodate larger aircraft is scheduled in stage three of the development. The total redevelopment program is estimated to worth $60million.




NEW CURRENCY NEXT YEAR. The portrait of Queen Elizabeth will be replaced next year with a new series of banknotes and coins that depict Fiji's flora and fauna



Reserve Bank of Fiji Governor Barry Whiteside said members of the British Royal Family have featured on our currency since 1934 and the country is grateful to have had the privilege of this association over the past 78 years. He said that while it is sad to see the transition taking place, it is time to move forward and promote Fiji’s unique national treasures and the biodiversity that lies around us. The new notes and coins will start to come into circulation from 2nd January, 2013.

Thursday, November 29, 2012

News and Comments Thursday 29 November 2012


FREE INTERNET ACCESS FOR FIJI. Fiji’s Government is soon expected to provide free internet and data access for Fijians across the country. The move was announced yesterday at the opening of  the Tele-centre at Nukuloa School along the Lautoka/Ba corridor by acting Prime Minister, Aiyaz Sayed-Khaiyum. Another seven Tele-centres will  be opened at other locations around the country in the coming weeks.

This is one of the Government’s most important initiatives – to provide free access to the internet for ordinary Fijians. This is a way we can bridge the digital divide between rich and poor and rural and urban people in Fiji,” he said. 

Aiyaz Sayed-Khaiyum said that ten more centres would be established in 2013 as part of the Government’s ongoing efforts to forge a smarter, better connected and more modern Fiji. “Only about 25-thousand Fijians have regular access to a fix-lined internet connection at the moment and we believe that this initiative will improve that figure dramatically,” the he said. As well as all the necessary hardware and software, the Government is also providing security for the Tele-centres and an assistant to help users learn how to use the services. The first lot of Tele-centers were launched by the Prime Minister, Voreqe Bainimarama, in October last year, at Suva Sangam College, Levuka Public School, and Rakiraki Public High School.

Related story.  US expert says  Fiji should develop its own net.

CONSUMER COUNCIL CONCERNED ABOUT COUNTERFEITS. Council CEO Premila Kumar has accused  "many traders and service providers (of) unfair trade practices which includes selling of counterfeit products as genuine.She gave one example of Czech Cebo sandals being sold as genuine when investigations found they were made in China and sold at a price that matches the price of the genuine sandals. So far the Council has received nearly 2,000 complaints involving goods worth over $2 million.

MORE SQUATTER AREA UPGRADES. Upgrading works  will be carried out on three squatter settlements  (Nasinu, Ba and Savusavu) next year, and work will continue at Caubati, Sasawira, Narere, Cuvu and Ledrusasa. The 2013 Budget allocated $1 million for squatter upgrading and resettlement projects. A 2007 survey showed that 15% of the population live in squatter settlements but this figure excludes areas on  native and private land where people have been given some sort of permission to build without any recourse to building standards.  Squatter is not a useful term in Fiji. The terms "informal housing" and "informal settlements" are more appropriate.

NEW VUNIVALU IN MID-2013. The chiefly clan in Bau Island will announce the name of its new Vunivalu next year although a decision has been made on the incumbent for the position.The new Vunivalu of Bau, the paramount Chief of the Kubuna Confederacy that has been vacant since 1989 was put on hold earlier this year. The four male candidates are Ratu George Cakobau Junior, the son of the late Vunivalu, his brother Ratu Epenisa Cakobau, Ratu George Kadavulevu Naulivou, and former Vice-President Ratu Jope Seniloli. The head of the Tovata confederacy is the Tui Cakau, currently Ratu Naiqama Lalabalavu, and the head of the Burebasaga confederacy is the Roko Tui Dreketi, Ro Teimumu Kepa, both former SDL Ministers and both sworn enemies of the Bainimarama government.


HEALTH MINISTRY BALANCING ACT. The ratio of money allocated to capital works and operational costs will change from 20:80 to 30:70 next year, and perhaps 40:60 later on. The 2013 budget has allocated an additional $15 million to the Ministry of Health, amounting to a total grant of $167 million. The additional funds will allow the ministry to cover operational costs and improve existing services, equipment, and infrastructure. Health Minister  Dr Neil Sharma said, "All these years, the ministry had built many institutions and facilities but had not been able to maintain all of it. We have not provided it with a coat of paint, when you go out to the Eastern Division, you will find that there are health centres with no paint, the gutters have fallen off, no more water left there, the poor nurse is trying to do her thing, the machine is broken down. So what she is able to do is a big issue.

FOUR YEARS WORK ON ROAD UPGRADES. Fiji Roads Authority manager Mike Rudge believes that all road works and other road maintenance that needs urgent repairing will be done successfully, with the $422 million budget allocation by the government for next year.

"The FRA is delighted with the budget that the government has provided. This budget achieves a good balance of improving the road network with the new capital projects in Suva, Nadi and Vanua Levu and sustainable funding for roads and bridge renewal and maintenance," he said.

He said if the government and other donors continued to assist FRA with similar funding for the next four years, FRA would be able to maintain maintenance and renewal of more than 500km of reseals, more than 85km rehabilitation works, 80,000km of unsealed roads grading, 300km of new gravel on the unsealed road, all potholes filled within a week maximum response time, pavement repairs, improved pavement marking and delineation, shoulder maintenance, drainage maintenance (cleaning and upgrading), signs maintenance, routine bridge work (excludes major structural work), vegetation control, initial emergency response (excluding full reinstatement to be funded separately) and improved standard of traffic management.

Mr Rudge said government was aware of similar level of funding for the next few years in order to sustain road conditions that had been repaired and those that were currently being fixed.

"The FRA believes that the level of funding the government has provided for maintenance and renewals of roads and bridges will allow us to make a difference to the roads that most need it," he said.

FRA received $27.3 million for its operating grant and $395.1 million as its capital grant.

Wednesday, November 28, 2012

News and Comments Wednesday 28 November 2012



Fiji Times publisher Hank Arts, me, and editor Fred Wesley
FIJI TIMES PLEADS GENUINE MISTAKE. Lawyer John Apted  said the FijiTimes would print a front page apology for publishing a a story from NZ's Sunday Star Times that questioning the integrity of the judiciary. [Readers should be aware that while anyone can criticise a judicial judgement, no one anywhere can criticise the integrity of the judiciary without breaking the law.]

Apted explained that the deputy sports editor had reviewed the story and made a wrong decision as he was not aware of the legal implications.Following the incident, the newspaper has instituted further training and constant newsroom meetings.He said the rule of the newsroom now is that if you cannot get a story reviewed, leave it out of the paper. Apted said further steps are being taken to strengthen the system.He said that every day at 8pm, the general manager and the publisher are sent a list of stories with a summary.

The Fiji Times position was made more difficult because of its failure to attract staff at the editorial level and recent losses of senior people. Justice Callanchini said the systems should have been in place before this incident took place. Apted asked that the penalties should not be excessive and there should not be any imprisonment as this was a mistake by a third party.

Acting Solicitor-General Sharvada Sharma asked the High Court to impose a $500,000 fine and six months imprisonment for  publisher Hank Arts and Editor-in-Chief Fred Wesley.  Sharma said The Fiji Times ccommitted a similar offence in 2009 where they were fined $100,000. he said an appropriate penalty needs to be imposed on the company to ensure that it serves as a deterrent for would be offenders.The judgement will be delivered on notice by Justice Callanchini.

Comment
I think the judge should impose a notional fine, say $10,000 as Apted suggests, and move on. The evolving situation in Fiji calls for more freedom, and more responsible reporting, A significantly larger fine —and any imprisonment— will seem unnecessarily vindictive and be unhelpful as Fiji struggles to move forward.   Click this link for fuller Fiji Times coverage.  I will report on my interviews with the Fiji Times and the Fiji Sun sometime soon.


HELLO FIJI. ARE YOU STILL THERE? At long last Fiji has resurfaced in the NZ media but guess what they have published? Radio NZInternational quotes the National President of the Farmers Union, Surendra Lal, on the proposed tax free zone along Kings Road from Korovou to Rakiraki, saying he doesn’t think there is much opportunity for huge developments. And Michael Field says the Fiji Government wants the Fiji Times Editor jailed for re-printing a story first published in New Zealand's Murdoch-owned Sunday Star-Times that claimed there was "no judiciary in Fiji and that the place was run by a military regime."

Not reported was  anything substantial on the Budget.  Or  Fiji's standing by the Kyoto Agreement on climate change, that NZ has all but abandoned.  Or that a prominent blogger was recently in Fiji and has some things to say contrary to those typically published in the NZ media. My golfing friends, thanks to old TV film footage, remain unconvinced  the military is not still occupying Suva. I'm sure, had I denounced Bainimarama or said anything to support  the false TV images, the phone would not have stopped ringing.  So much for media freedom and responsible reporting in NZ.


MILITARY YET TO GIVE SUBMISSION. Chief of Staff, Brigadier General Mohammed Aziz, says the submission will be given to the Constitution Commission and arrangements are being made. But why so late?The deadline for the submissions ended in early October, and the Commission is expected to complete its draft before Christmas. The draft will be presented to the President in early January before being put to the Constituent Assembly,

THE CONSTITUENT ASSEMBLY. Government has said the composition of the assembly shall reflect the diversity of the people of Fiji and include but not limited to the government, registered political parties, faith-based organizations, employers representatives, trade unions, farmers and members of the rural community, the military, national organizations, women, persons with disability, youth, pensioners and other civil society groups.

Once approved by the Assembly, the document go to a tribunal that will consider whether the immunity provisions and other matters are contained in the draft. Within seven days of receipt of the draft constitution and the report of the tribunal, the Constituent Assembly shall make the necessary amendments in accordance with the report of the tribunal and shall present draft constitution back to the President.The new constitution shall come into effect on the day following the date of assent by the President, subject to any provision in the constitution that postpones this date.The work of the Constituent Assembly is expected to be completed by late March 2013.

Tuesday, November 27, 2012

News and Comments Tuesday 27 November 2012

A leopard never changes its spots

WHERE IS THE TUI CAKAU? In 2001 Ratu Naiqama Lalabalavu, the Tui Cakau and head of the Tovata confederacy, was elected to parliament as a leading member of the ultra-nationalist CAMV party many of whose members had supported the 2000 Speight Coup  that overthrew the democratically elected coalition government led by Mahendra Chaudhry.

Following the 2001 election, the CAMV joined a coalition led by Qarase's SDL party, and he was appointed Minister of Lands and Mineral Resources. Ratu Kamisese Mara's daughter, Adi Koila Nailatikau, spoke up against his appointment, saying she held him responsible for the burning of her father's cane farm at Matailakeba in Seaqaqa in the midst of the army mutiny at Sukanaivalu Barracks in Labasa on July 29, 2000. He denied this and other charges that claimed he supported the mutiny, saying but for his intervention mutineer supporters would have ransacked Labasa but he spent a short time behind bars.

In 2003, 129 years after the Deed of Cession, Ratu Naiqama said political authority should be returned to the chiefs because it was the chiefs who had ceded Fiji to the British Crown.  He wanted Senate to be abolished and its duties taken over by the Great Council of Chiefs.

As the 2006 elections approached, the CAMV party declared itself bankrupt and prominent members, including Ratu Naiqama, joined the SDL party. He was appointed Minister for Fijian Affairs and Minister of Lands and Provincial Government,and in the months leading up to the military coup in December 2006, he was a strong advocate for the three bills, opposed by the military and many other citizens,  that would have given the Speight plotters immunity and iTaukei further rights over their land and fisheries.  Qarase's refusal to permanently withdrawn these Bills was the reason given by Bainimarama to carry out the Coup.

Since the 2006 Coup he has opposed each and every move by the Bainimarama government. He told iTaukei not to sign the People's Charter and Cakaudrove chiefs to oppose any land being made over for land bank development.

He is clearly a man who believes chiefs are born to rule and lead their people. With these thought in mind, and not forgetting his political record and ministerial responsibilities, we ask how the situation described below could have occurred in his province under his leadership and how his people can possibly have benefited.

The agricultural situation
Senior Agricultural officer Savusavu, Esava Tuimoala, told the Cakaudrove Provincial Council
last week that fewer Taukei were "planting on the land around them as the source of their food ... [they] opted to eat commercially manufactured food sold in shops rather than plant their own fresh produce."

"The ministry," he said, "is setting its target at reducing the purchase of imported goods when they can be produced locally and consumed directly from farms. We are encouraging people to grow their own food for personal consumption, for occasions and for commercial purposes. Government is concerned about who will take over from farmers in using land that is currently lying idle. Hence we are encouraging farmers to use the empty farm land that we have."

As Fiji braces itself for the cyclone season from November to April, the agricultural officer asked about "local and traditional knowledge to conserve food and store supplies."

He could also have asked (but being iTaukei, was probably too respectful of chiefly authority, to ask) what Ratu Naiqama has been doing to encourage the fuller use of land, more self-sufficiency, cyclone preparedness,  and other measures to improve the  living standards of his people.

How could a worthy Tui Cakau allow such a dismal under use of resources by his people!

CAKAUDROVE MATAQALI REJECTS WATER AUTHORITY REQUEST for the lease of land at Savusavu for the construction of a sewerage plant. Tui Nasavusavu Ratu Suliano Naulu said the decision by the mataqali did not mean they disagreed with having development in Savusavu. The only reason for not agreeing to the proposal, he said, was because they wanted the mataqali members to make use of the land because of its small size. He said the piece of land wanted by WAF was not sufficient for such a development.

He did not suggest another, large and more suitable, piece of land. Which raises the question: Genuine response? Or an ingenious (clever at contriving) Ratu Naiqama-style refusal?

UNION LEADER SAYS WAGE INCREASES OKAY BUT ... Fiji Public Service Association General Secretary, Rajeshwar Singh has welcomed the pay increases for established and unestablished Government workers but said other civil servants should have also been given a pay rise.

All established civil servants with an annual salary below $10,000 will get an increase to go to the $10,000 level while unestablished workers or government wage earners will get a 10% pay rise. This will benefit 4,541 government employees. The pay increments will be effective from January 1st next year and a bonus system will also be introduced for the civil service.

Meanwhile, as announced in this year’s National Budget, there was a 3% pay increase across the whole of government from 1st January this year.All nurses and doctors also received an additional 3% pay increase which means that they received a 6%increase in total in 2012.Police officers also received a 9% pay rise this year. Government said the increase in salary for unestablished workers and civil servants at the low scale is to balance economic and social development.The cost of the pay increase is $5.7m

FNPF BIG GAIN. The Fiji National Provident Fund has recorded a net surplus of $115 million, even after paying out $127 million to pensioners who opted for a lump sum withdrawal.CEO Aisake Taito
said the pleasing result was due to strong performances from the Fund’s investment portfolio. Total members balance grew by $200m to $3.2b compared to $3blast year.

SOMETIMES THE ANTI-GOVERNMENT BLOGS ARE PATHETIC. There are sound reasons to criticise the Bainimarama government on a number of counts as this blog has shown, but criticisms of the anti-government blogs sometimes verges on the imbecilic.

Two recent examples, from Sai Lealea's Fiji Coup 2006 and copied by Matavuvale, concern the promotion of Lt Col Inia Seruiratu from a permanent secretary to Minister for Agriculture, and Fiji's rugby loss to Ireland.

On the ministerial appointment Sai reminds us that Bainimarama swore no military officer would benefit from coup but now military personnel "are inhabiting government roles without proper procedures being followed." He claims they all are unqualified for the positions because they lack academic training and qualifications.  They have "just military experiences. And much more experienced and academically qualified people have been overlooked, dismissed or run out of the civil service by the Bainimarama thug machine."

He finds it "sad and disgusting" that the appointment was made with all the trappings and ceremony as if they are legal and proper. Even worse when the person in question and the family thrive and lap up the limelight of such contrived occasion.

Sai seems unaware that officer training includes far more than "experience" and that senior officers have passed examinations as rigorous as many academic examinations. He also seems unaware that permanent secretary (but not ministerial) positions are advertised, and the processes of appointment are as transparent as they always were.  The truth is Sai does not like the Bainimarama government and he would find fault with whatever it does.

Military "torture man" causes rugby loss
This is even more obvious is in his posting blaming the team manager "military Torture Man, Major Aseri Rokoura" for the 53:0 loss against Ireland and the earlier 54:12 loss against England. Sai put the losses down to low morale caused by the imposition of Rokoura's "enforcing military-style discipline on team members."

Not to waste an opportunity Sai adds: "Rokoura is just being a carbon copy of his tyrannical master, Dictator Bainimarama whose every order he follows to the letter, including the torture and abuse of innocent civilians taken up to the military camp in Suva." Huh! Who? When? 2007 or later?

Sai seems a little out of touch with news from Fiji but he's up with the play trying to make some money out of advertising on his blog.  Go there if you are a 53-yr-old woman who wants to look 25 ("Mom publishes 1 simple wrinkle trick that has angered doctors) or visit "Zoosk Personals. Still single? So are we? Browse free."

Sai,  I don't like to be overly critical. We have mutual friends.  But if you intend to continue publishing,
criticise the Bainimarama government on important issues, check your facts and try to keep up to date. Take a check on your anger.  Use your head.

Sunday, November 25, 2012

Let's Be Honest: Address by the PM



I announced one of the biggest spending programmes in Fiji’s history. We’re providing more money for families in need, for the elderly, for housing, for education, for our police, our prisons and for access to justice for all.

More money for rural communities, for sport and to teach young people new skills. And we’re also putting more money into the hands of many ordinary Fijians by raising the tax threshold – the point where tax kicks in – to $16-thousand a year.

We’re also cutting the price of electricity by five cents a unit so that families don’t have to be so anxious about their power bills.

WHY ROADS MUSTBE FIXED NOW
But there is one item of spending in the 2013 budget that outstrips all others. And I want to explain to Fijian families why it is necessary and what it will mean for us all.

Every Fijian knows how bad our roads are. It isn’t just the time it takes to get anywhere or the punishment our vehicles are receiving.

The dreadful state of our roads is holding the country back. It is hampering our economic development. They must be fixed.

Successive governments have put this in the “too hard basket”. But my government has decided to act. And act decisively.

We are not going to continue to have road crews filling in pot-holes just to have them reappear again every time it rains. We are not going to have corruption and incompetence blocking our path any longer.
We are going to start from scratch and give the whole country the same standard we are seeing on the Kings Road in northern Viti Levu – an international standard.

Roads that boost both the local economy and the national economy. Roads we can all be proud of.

 USING KIWICOMPANIES
I signed contracts with three overseas companies – all of them from New Zealand – to upgrade our roads using foreign expertise and local workers. Many of these workers are coming from our Department of National Roads. We are insisting that they train Fijian workers in the latest road building skills so that the work can continue when they eventually leave in five year’s time. It isn’t going to be cheap. This year alone, we are going to spend $422 million resurfacing and fixing our roads. Yes, it’s a lot of money. We’re increasing the deficit from 1.9 per cent to 2.8 per cent. But this is not short-term spending for spending’s sake. It is a massive investment in Fiji’s future. And it will pay dividends in terms of the rest of the economy for years to come. It needs to be done and every Fijian knows it.

It WILL be done because my government is determined to deliver.

THINGS TO BEPROUD OF
As your prime minister, there are many things I am proud of in this budget.

These include our $110-million commitment to provide communities with clean water … the health workers we are putting into rural areas … the access to free legal aid that we are giving many Fijians for the first time … and the pay rises we are giving to low income civil servants.  But I’m proudest of all about the investment we are making in our future through our young people.

We have already provided free bus fares so that our children can get to and from school every day. It’s a great pity that some people have abused the system. But for the vast majority of parents, this scheme has been a valuable contribution to making ends meet and it will continue.

EARLY CHILDHOODEDUCATION PLANS
We all know that a child’s education begins well before primary school but when it comes to pre-school education, Fiji has lagged behind many other countries. We are providing more money in this budget to build and upgrade kindergartens in rural areas and are also increasing the salary grant for early childhood teachers.

To help fulfill our vision to be a smarter country, we are giving generous tax concessions to individuals and companies willing to donate new computers to schools. They will get a tax deduction of 150 per cent if they spend between $10,000 and $100,000 on computers for urban schools and 200 per cent if the computers are for rural schools.

FARMING, VOCATIONALEDUCATION THRUST
I am especially proud to be able to provide new scholarships to encourage our young people to become farmers. Fifty Form Six and Form Seven graduates will undertake a 12-month certificate course at the Fiji National University in various farming disciplines.

And at the end of that they be given land and money to buy a house and shed, a tractor and other equipment, plus $2000 to get them started. We are giving these young people a sustainable future while helping to reduce the money Fijians spend on food imports.

Our other big initiative is to spend $5 million in 2013 to provide more than one thousand young people with vocational scholarships to take up specialist trades. At the end of their courses, they’ll become certified plumbers, electricians, mechanics, deckhands and all manner of other trades.

We are not just helping these kids. We are increasing the nation’s skills base. All this is also an investment in the future. These young people carry the hopes of all of us for a smarter, more efficient Fiji.

RESTRUCTURING OUR SOCIAL WELFARE
The other areas I’m especially proud of are the Government’s efforts to relieve poverty and to create equal opportunities for all Fijians.

I reject the claims of some of our critics that we are not doing enough to help the poor. This budget provides for a complete restructuring of the social welfare system in Fiji. The very poor will get the most assistance, which is how it should be. In the past only three per cent of low income families qualified for assistance. Now, ten per cent of families will be covered by our social welfare programme.

We are also continuing the Government policy of writing off loans for people living in public housing. We’re relieving them of the worry of having to pay a debt that they cannot afford. This initiative compliments our decision to forgive the water bills of thousands of Fijian households and institutions.
We’re also providing money to either upgrade squatter settlements or put these people into proper housing. These are all practical measures to assist low-income families.

HARD WORK,NOT HANDOUTS
But I want to stress that this Government believes in hard work, not handouts. We need to create more jobs so that more people get work and provide for themselves and their families.

The global experience shows that you can only do this by creating the conditions for jobs to be created. Government has to provide incentives for people to invest. And so on top of our existing incentives, we are further reducing the corporate tax from 20 per cent to 17 per cent for overseas companies that are prepared to base their headquarters in Fiji. We support business because it is by far the best way to tackle poverty.

STRENGTHENING OUR SECURITY
Guaranteeing the security of every Fijian is my government’s most important responsibility. So we are spending $8 million more than last year on the police and $3 million more on our prisons.  There is no excuse for the shortcomings in the system that we have all seen in recent weeks. Finally I want to say something to all of you about what we expect from every Fijian as we move towards a return to democracy. We have tackled the corruption that was destroying our national life. Now, I want everyone to think about what we can all do in our personal lives to build a stronger, fairer nation.

BUILDING A NEWAND BETTER FIJI
The manager of one of our biggest resorts tells me that of all the places he’s worked, Fiji has the highest rate of theft by the staff.

Such a statement shames us all. We need to reaffirm basic standards of honesty, decency and goodness in our homes, schools and workplaces. These standards are not old fashioned. They are timeless and we need to work much harder to uphold them.

Being honest means many things. It means being an honest person and an honest citizen. Our tax rates are among the lowest in the region, lower than Australia and New Zealand. So there is no excuse not to pay your tax.

I’m especially disappointed when I hear about those in the business community not fulfilling their tax obligations or not passing on reductions in duty to their customers. I appeal to everyone:
When you see something you want that isn’t yours, resist the temptation to steal it. Parents, I ask you to set an example for your children that they will eventually pass on to their own kids.

We are building a new Fiji for everyone, a Fiji in which every person is equal. We also want a nation where honesty is valued, where we can leave our doors unlocked again, just like our grandparents did.
And we want a nation in which people are more considerate and caring, where we treat each other more like brothers and sisters in an extended family than strangers.

This is an important part of my vision for the new Fiji and I invite you all to share it.

Saturday, November 24, 2012

The Fiji Dollar


Dilemma to raise our dollar*

By Dr TK JAYARAMAN
Professor at the Fiji National University’s School of Economics, Banking and Finance, Nasinu Campus.

As usual, there were several 2013 Budget submissions in the last few weeks. One of the submissions was that government should raise the value of the Fijian dollar by five per cent to 10 per cent for reducing inflation. It was argued that both businesses and consumers rely more on imported products, from manufacturing to retailing and more expenditure is incurred by businesses and consumers. The submission stated that if the value of the domestic currency is increased, the imported items would cost less. It was also claimed that relief in terms of lower import costs would be welcomed by consumers and manufacturers alike.

The 2009 devaluation
A foreign exchange crisis led to devaluation in 2009. There was a rapid decline in foreign reserves by end of 2008. They were about FJ$560 million, sufficient for two months of imports.  The decision was taken on April 15, 2009 to devalue the Fijian dollar by 20 per cent. The Fijian dollar was US$0.57 before devaluation. After devaluation it was US$0.45, the drop being 12 cents.

Consequent to devaluation, rise in earnings from commodity exports and services including tourism led to growth in foreign reserves in the next three years. By end of October 2012, foreign reserve levels rose to FJ$1.581 billion, which were sufficient to cover five months of imports in current prices. No doubt landed prices of imported goods of all sorts, food, fuel and raw materials and capital goods went up as a result of devaluation, whether or not the imported materials were imported before devaluation.

In the 12 months following the April 2009 devaluation of the currency, inflation was over 10 per cent.  However, it moderated to four per cent by end of 2010. During the 12 months ending September 2011, consumer price index rose only 3.7 per cent. Price controls imposed on many food products since 2009 contributed to low inflation. It is reported that 24 food items, 460 hardware items, 74 pharmaceuticals, utility rates, wholesale cement and steel, fuel and rental properties were covered under price controls.

Purpose of devaluation
Devaluation is an adjustment measure to correct balance of payments disequilibrium. The disequilibrium is reflected in widening trade deficits and current account imbalances.
In a country under a fixed exchange rate regime, as in Fiji, an adequate level of foreign reserves is needed to defend the fixed exchange rate.

Only under a flexible exchange rate system, is  there  no need to maintain reserves. Fiji cannot afford to have a flexible exchange rate system. Fiji’s exports earnings are determined by a very limited range of exports. These include sugar, tropical fruits and vegetables, tourism and remittances. Further, the export earnings are seasonal and are not steady throughout the year.

On the other hand, imports of Fiji are not only steady but they exceed exports in certain times of the year. In such circumstances, a floating regime would play havoc: High volatility in exchange rate would affect investment decisions.

A fixed exchange rate regime has served the country well. A steady exchange rate requires adequate level of reserves.

The devaluation of April 2009 was resorted to correct the fundamental disequilibrium. High trade deficit (31 per cent of national output) and current account deficit (18 per cent) necessitated a drastic remedy.

If the country had borrowed funds for structural adjustment to improve balance of payments from IMF, austerity measures would have to be implemented as part of conditionalities.

Uncertain world economy
Presently the US economy is in doldrums ever since 2008. The euro crisis is continuing. Only mineral exporting economies including Australia have done well.Bilateral exchange rates react in a predictable fashion. The Fijian dollar declined against Aussie dollar; and appreciated against US dollar. In the uncertain circumstances, the competiveness of Fiji’s exports is of paramount concern.

One measure is real exchange rate (RER), which is the product of nominal exchange rate and ratio of the domestic price level to world price level. Given the nominal rate, a rise in domestic price level relative to the world price level, would result in an increase in RER.

Increase in RER would hurt the competitiveness of exports and tourism.
Fiji needs to protect the level of resources in an uncertain world. A recent IMF study shows that Fijian dollar is broadly in line with fundamentals with no deviation of any significant concern.

With a benign world inflation outlook, there is no need to effect any change in nominal exchange rate.


http://www.fijisun.com.fj/2012/11/24/dilemma-to-raise-our-dollar/

Lockington's Everyday Fiji ... Life Goes On

Civil Servants and Pensioners

Civil servants will soon be getting merit payments. I must congratulate those who will receive the increment and wonder whether the Cost of Living Adjustment (COLA), will be included.

If COLA is included,  will pensioners who are on government pensions also receive it? And what about those on FNPF pensions?  The  FNPF could put aside some amount of money earned from investments to facilitate this payment. After all, FNPF pensioners face the same price of goods others face. I think it is only fair.

And may I suggest that pensioners who reach seventy years of age get some kind of reasonable increase> Their pensions  are smaller than today's pensions very because they are based on the lower incomes and cost of living when they retired.  Yet, today,they pay the same bills and other expenses as all others.
 

Allen Lockington is a self-employed customs agent and business consultant who has regular articles published in Fiji. I thank Allen for permission to reprint some of them in this political blog. They remind us that life goes on, whatever the political situation. And it's good to know that.

Thursday, November 22, 2012

2013 Fiji Budget Speech

PM BAINIMARAMA - 2013 FIJI BUDGET SPEECH




PM-2013-2
“INVESTING IN OUR FUTURE”
FIJI BUDGET SPEECH 2013
COMMODORE JOSAIA VOREQE  BAINIMARAMA, OStJ,MSD,jssc,psc
Prime Minister and Minister for Finance, National Planning, Public Service, Peoples’ Charter for Change, Information, Sugar, Foreign Affairs, International Co-operation and Civil Aviation, Indigenous and Multi-Ethnic Affairs and Provincial Development
FRCA Building, Nasese, Suva     Thursday, 22nd Nov, 2013

Cabinet Ministers;
Your Excellencies;
Members of the Diplomatic Corps;
Distinguished Guests;
My Fellow Fijians:
It is my task today as your Prime Minister and Minister for Finance to present to you the 2013 Budget.
Next year will long be remembered as the year that Fiji made a bold investment in its future.
For today, I am announcing a budget that decisively tackles some vital areas of need in our nation and especially one of its biggest challenges – the state of our roads.
Only by an ambitious spending initiative can we overcome our greatest infrastructure problem and one of the biggest barriers to Fiji’s economic development.
So we will do a lot more to fix our roads by increasing our national deficit - from 1.9 per cent to 2.8 per cent .
Yes, it is an increase. But it is not reckless spending. It is a focused and disciplined approach to building the nation’s economic capacity. It is a long-term investment in infrastructure that will bear fruit for us in greater productivity.
It is a responsible way to solve a long-acknowledged problem, and every Fijian knows that it is necessary.
We intend to build on my Government’s proud record of service delivery to the Fijian people- not only in roads but in a host of other areas that have been neglected for far too long.
Ordinary people will see a difference. This budget will affect every household.
What are we promising? A Government that works for all Fijians. That means that we will push relentlessly for equality of all Fijians.
We will push relentlessly for opportunity and justice for all Fijians. And we will do our best to keep all Fijians safe and secure.
Regardless of religion or ethnicity, whether male or female, urban or rural, young or old, we are all endowed by our nation with the same rights, privileges and opportunities. And this budget reflects that.
Our overall aim is to modernise and streamline all the instruments of government. Civil servants need to be better servants of the people. And they need to be supported by strong institutions, better rewards and more efficient processes.
This budget will strengthen law and order. It will make justice more accessible. It will encourage investment and economic growth. And it will make Fiji stronger and smarter.
It is a budget for the people. And it will set the stage for what we are all working towards in 2014 – the full restoration of parliamentary democracy.
Since I presented the budget last year, nearly half a million Fijians have registered to vote in the election, and we expect to register many more. We are formulating a new constitution with a set of unassailable, universally-accepted principles. Our economy is stable and growing.
They said we couldn’t do it. We have.
They say we will never have parliamentary democracy. We will.
We are on our way. And it will be a fairer democracy; a more equal democracy; a democracy that is built to last.
Ladies and Gentlemen and my fellow Fijians, there is one big difference between my Government and those that came before it. We deliver. And we deliver for all Fijians.
In return, we expect all citizens to meet certain standards of behavior.
There is too much personal dishonesty and abuse of the system. We see it in all areas, from those who abuse the free bus vouchers for school children, to those who abuse the social welfare system, to those who continue to break the law by not paying taxes and customs duties. It is also unacceptable that importers and traders continue to charge ordinary Fijians and our visitors exorbitant prices even after Government has zero-rated or reduced duty.
We will not tolerate tax evaders, welfare cheats, or those who unfairly deny ordinary Fijians access to affordable goods - just as we won’t tolerate corruption. It is the Government’s obligation to the majority of law-abiding and decent Fijians.
RESPONSIBLE ECONOMIC MANAGEMENT
Ladies and Gentlemen and my fellow Fijians, in 2011, the Fijian economy grew by 1.9 per cent. The economy is projected to grow by 2.5 per cent in 2012. Forecast growth for 2013 is 2.7 per cent.
For 2013, we estimate total revenue of $2.1 billion and a total expenditure of $2.3 billion. The estimated net deficit for 2013 is $218 million - or 2.8 per cent of GDP.
The provision for operating expenditure is $1.55 billion. $722 million is budgeted for capital expenditure.
We are proud to have increased the proportion of the money that we spend on capital projects.
Previous budgets set allocation for capital works at 20 per cent of the budget and 80 per cent on operational costs.
This year capital expenditure will hit the $700 million mark for the first time. This represents a budget increase to 32 per cent spent on capital works. That means more money for development projects and initiatives
Inflation is expected to continue to decline during the remaining months of 2012 to around 3.5 per cent.
Our reserves are at comfortable levels at $1.58 billion, sufficient to cover 5 months of imports of goods and services.
We have eased certain exchange controls, a sign of confidence in the strength of our economy, which investors will find attractive.
This year we refinanced several high-interest loans, with a combined value of $51 million, which will lead to a saving of $5.2 million in interest payments next year.
Building on our prudent financial management, we have so far built up our offshore sinking fund to 95 million US dollars. This is expected to surpass 100 million US dollars by the end of this year.

The FNPF reforms have been on-going after the budget announcement in 2010. Since then, significant progress and reforms have been made to ensure the sustainability of the pension scheme and to improve governance and transparency of the only superannuation fund in Fiji.
The recent recognition by the International Social Security Association is a testament to the success of the reforms in FNPF. The announcement of the FNPF annual results only yesterday further shows the strong position of FNPF within the financial sector in Fiji.
However, FNPF is faced with the continuing challenge of finding new investment opportunities that provide adequate returns to its members. It also has the task of turning around some of its non-performing assets. In this regard, I am pleased to announce that Stage One of the Momi Resort Development will commence at the beginning of the second quarter of 2013. Accordingly, FNPF will complete the development of the resort with an estimated investment of $150 million. Government will assist this initiative by ensuring that the project is completed expeditiously.
As part of Government’s collaboration with FNPF, it will sell its overseas mission properties to FNPF and lease them back. This will provide FNPF offshore investment opportunities with attractive and sustained returns while reducing the operational costs for Government.
FNPF will also explore opportunities within the region to ensure that it not only continues to provide better returns for its members, but also diversifies its investment portfolio, thereby reducing its risk.
We have already begun to reap the results of the bold tax cuts I announced last year, which reinvigorated the economy, as expected. Investment levels have reached 18 percent of GDP.  New investment lending is growing and consumption is buoyant as a result of the rise in disposable income.
And this will continue.  We have added more incentives to attract investment and help our economy grow. We will continue to position Fiji as one of the most preferred locations in the region for both foreign and local investment, through an attractive taxation regime, and investor-friendly and consistent policies.
In a global context, we are faced with many of the same challenges that I outlined last year. Global growth has been revised downwards from 3.9 to 3.6 per cent. The sovereign debt crisis in Europe continues. There is weak demand in the advanced economies, and many developing countries continue to face strong inflationary pressures.
Globally it remains a volatile situation. But we have managed our economy responsibly and well. And we have done so in such a way that is fairer for every Fijian.
We haven’t been a business-friendly Government at the expense of the rest of the community. We provide targeted assistance to the poor, the disabled and the disadvantaged.
We support business to sustain and create jobs. Because only by growing our economy and attracting new and re- investment can we raise the living standards of ordinary Fijians. We don’t only need to create jobs, we need to create opportunities for ordinary Fijians to have sustained livelihoods.
Our vision for the modern Fiji is for Government, employers and employees to work together to raise living standards, not let political or personal interests, cronyism or corruption get in the way of our development.
We are a small country and cannot escape the impact of what happens globally. That is all the more reason why we need sound policies that respond not just to the requirements of the international marketplace, but also to the needs of our people.
Ladies and Gentlemen and my fellow Fijians, I now have much pleasure in announcing the details of the 2013 Budget.

PREPARING FOR NATIONAL ELECTIONS
We are preparing in earnest for a return to parliamentary democracy in 2014.
As you know, the Constitutional Commission’s work will come to an end at the beginning of January, 2013. Following the submission of the draft constitution by the Constitutional Commission to His Excellency our President, a Constituent Assembly will review the draft constitution before final adoption.
The 2013 Budget provides $1 million for the work of the Constituent Assembly.
The Budget also provides $11 million for the Elections Office to prepare for the 2014 parliamentary elections.
In preparation for the first sitting of Parliament under the new constitution, $1 million has been allocated to refurbish and upgrade the existing parliamentary complex.

SERVING THE FIJIAN PEOPLE
Nothing is more important to my Government than to fulfill our promise to deliver basic services to all Fijians.
Given our current resources we can’t pretend to provide all of the services that we would like to.
But that doesn’t mean that we can’t be smarter and make more of the limited resources we have.
We need to stretch our dollar further. And in this budget, we have.

EDUCATION
Increasing the skills base of our country is the key to its development. We need better educated workers for Fiji to be internationally competitive. And it is a great tragedy that we lost so many of our best people because of the political instability of the past 25 years.
We need to rebuild this capacity, so we will continue to expand access to education and remove barriers to learning.
Our commitment as a Government to education begins in early childhood and remains firm right up to the tertiary level.
This year, the Ministry of Education will receive a budget of $268 million, representing an increase of $12 million.
It’s not enough to just send our children to primary school. We also need to develop a much better pre-school system.
In 2013, we will increase the salary supplement for early childhood teachers to $3.3 million, from $1.3 million.
We will allocate $150,000 to upgrade more kindergartens in Fiji’s rural communities, and $100,000 to buy new equipment for these pre-schools.
Currently, there are a number of children in Classes 1 to 3 who are boarding in order to get education.
We will build new classrooms for Classes 1 to 3, so that these children – at such a young age - will no longer have to stay away from their mums and dads. $1.2 million has been set aside for this purpose.
A cornerstone of my Government’s policy is that education should be accessible to all Fijians. We are committed to making education affordable, especially for our families who would otherwise not be able to send their children to school.
The free text books and bus fare assistance schemes will continue. We have allocated $11 million to the bus-fare subsidy program.
$7.6 and $11.7 million have been given for tuition-fee assistance for primary and secondary school students, respectively. We will ensure that remote and disadvantaged schools will be given adequate funding.
We also need to encourage our students to stay on at school. That is why we are increasing funding for vocational training. $1.2 million will be spent on bolstering courses such as carpentry and plumbing that provide our teenagers with practical skills that will allow them to get jobs. This will cover all the costs for setting up these vocational programs in 124 schools across the country.
Today, I announce a major initiative to expand the nation’s skill-base by providing us with more trades people and creating more employment and business opportunities for young Fijians. We will allocate $5 million, in 2013, for a new scholarship program to cover tuition fees for more than 1,000 students to undertake vocational courses, through Fiji National University (FNU), to help them acquire specialised trade skills. To enable them, amongst other things, to become certified plumbers, electricians, deckhands, carpenters, mechanics and engineers.
In addition, we will continue to support FNU’s vocational training for those living in rural and maritime communities.  We will allocate $1.8 million to this initiative.
We are also committed to continue to expand access to technology in our schools. My Government truly believes that an educated and empowered younger generation, with knowledge and access to technology, is a key to Fiji’s future success and prosperity.
A new allocation of $800,000 will be given to support the One Laptop per Child program in selected primary schools.
This project will complement and enhance other “ICT in education” initiatives and will help develop advanced computer and IT skills in our students.
In other bold initiative to hasten access to technology, generous tax concessions will be given to any taxpayer who donates new computers, including laptops, to our schools. They will get a tax deduction of 150 per cent if they donate computers for urban schools and 200 per cent for rural schools. To qualify, you will need to donate computers worth $10,000 or more, with a maximum ceiling of $100,000.
Tertiary education will receive $67 million in 2013, which includes an additional $1 million for the School of Maritime Studies.
Government will also provide $24 million for tertiary scholarships.
To regulate higher education institutions and establish national standards for various qualifications, the Higher Education Commission will receive increased funding of $800,000.
HEALTH
Better access to health care is central to my Government’s program. We all know that the health system in Fiji is not as good as it should be given years of neglect, but we are determined to improve it.
To this end, we have allocated an additional $15 million to the Ministry of Health, totaling $167 million.
These funds will allow the Ministry to cover operational costs and improve existing services, equipment, and infrastructure.
Continuing professional development and training is important to ensure that our medical staff is up-to-date on current practices and procedures, and receives specialised training to further advance their knowledge.
We have allocated $900,000 for the “In Service Training Program,” which provides continuing training for our medical personnel.  This will go towards covering the cost of both postgraduate studies and overseas placements for our health care workers. This program has already supported 12 officers, who are currently on attachment in India in the areas of cardiology, radiology and orthopaedics. We are investing in the future of our health system.
We will re-launch the Community Health Worker Scheme to improve health services in remote areas. Where there is no nursing centre, these workers can be mobile and carry out basic procedures such as taking peoples’ blood pressure. We have set aside $210,000 for this program.
The Community Health Worker Scheme is currently being piloted in the North before it is extended to other areas.
We will also provide for the maintenance of our health facilities. We are building more community health centres and nursing centres and upgrading others.
$4 million will be provided for major upgrades at health centres across the country, while $900,000 will be allocated for minor repairs.
Major capital works are planned for 2013, which include the extension of the Sigatoka Hospital. This will be funded jointly with hoteliers on the Coral Coast.
A new Health Centre will be constructed in Cuvu, Nadroga, and extension works will be undertaken at the Keiyasi Health Centre.
In addition, new nursing stations and staff quarters will be built in Nayavuira, Raviravi in Beqa, Lakeba, Tonia, Bagasau and Cikobia.
We will continue to upgrade the standard of medical and non-medical equipment in our health facilities. This year we have allocated $6.9 million for this purpose.
In particular, we have to be smarter about how we maintain our expensive medical equipment, to reduce the number of breakdowns and to ensure that we get the most out of our investment. Our biomedical equipment will now be serviced by professionals, and $900,000 has been allocated for this purpose.
We have budgeted $2 million to purchase vaccines that are essential for reducing child mortality, including those for Pneumococcal [New-ma-cock-al] Bacteria and Rotovirus.
We have also allocated $800,000 to fund public awareness programs to reduce the prevalence of non-communicable diseases. These public awareness programs will focus on reducing alcohol and tobacco use and maintaining a healthy lifestyle, including diet and exercise.
To help fund these initiatives, the excise duty on both cigarettes and alcohol will be increased to 10 per cent.
And to give Fijians access to a more healthy diet, we will reduce the duty on imported vegetables that are not grown locally to 5 per cent, which matches the rate on imported fruits not grown locally.
SPORTS AND YOUTH DEVELOPMENT
All over the world, Governments are increasing their investment in sport to encourage fitness, healthy competition and social cohesion.
Until now, Fiji has had several different sports development programs that were largely unconnected and uncoordinated. This needs to change. So we are providing a new allocation of $1 million to set up a National Sports Commission to oversee and coordinate sporting development throughout the country.
$4.2 million will be directed to Fiji Sports Council to assist with the upgrade of the National Stadium to international standards. Once completed, the National Stadium will enhance Fiji’s ability to bid for and host regional and international sporting events. This will develop sports tourism.
We will invest $2.7 million in an ambitious program to set up new integrated sporting facilities in rural communities, with the assistance of the Chinese Government.
Under this program, in 2013, three integrated sporting facilities will be built at Vunidawa, Seaqaqa and Rakiraki. And in 2014, an additional three will be built on Gau, Kadavu and at Korovou in Tailevu. The construction of these integrated sporting facilities will give those in the rural and maritime areas access to amenities which are currently only enjoyed by those living in the urban centers.
We will commit $490,000 for various sporting activities, such as outreach programs, sporting tours, hosting of international tournaments and sports scholarships.
We will also provide an extra $200,000 to develop sports grounds in rural communities.
With respect to facilities for youth, we will allocate $220,000 to upgrade the Naleba, Naqere and Sigatoka Youth Training Centers.

Finally, we will continue to support the National Youth Band in 2013.
MARITIME AND EMERGENCY SERVICES
We are bolstering the services provided by the Maritime Safety Authority of Fiji (MSAF). We are a maritime nation and need a better surveillance and search-and-rescue capability over our vast areas of ocean and coastal waters.
Therefore, MSAF will receive a grant of $6.6 million to bring Fiji into compliance with all international and national maritime obligations and ensure the safety of all seafarers.
From January next year, MSAF will make lifejackets available to the public, to comply with regulations that require all vessels to have them. We also need to make lifejackets more affordable and readily available to address the alarming incidence of drownings in Fiji. Currently, lifejackets made in Fiji are duty free only for the export market. We are changing this so that locally made lifejackets will be available for purchase duty free in Fiji through MSAF.
$3 million is allocated for the purchase of a new vessel for Government shipping services, and $1.5 million for the Shipping Franchise Scheme, to ease transportation access for our maritime population.
On land, we are incorporating ambulance response services into our National Fire Authority (NFA).
Minutes or seconds can make the critical difference between life and death. We want our emergency services to have the capability to respond quickly to save lives.
Currently, the NFA’s response units exist in the Suva/Nausori corridor. From 2013, they will be introduced at the Sigatoka and Ba fire stations, and will be rolled out to other stations in the coming years.
This initiative will cost $400,000 in 2013.
ENCOURAGING  VOLUNTEERS
The Fiji Volunteer Service Scheme will be allocated $400,000 to encourage volunteerism and promote a sense of service and civic pride amongst our citizens.
We have also sent volunteer teachers abroad to the Republic of the Marshall Islands, and are currently processing requests from Nauru, while Kiribati and Vanuatu have expressed interest as well.

LAW AND ORDER
The fundamental responsibility of any government is to provide security for its citizens.
The escape of five dangerous prisoners from Naboro recently reminded us of the absolute need for vigilance and resolve.

POLICE AND CORRECTIONAL SERVICES
Our police need to be properly equipped, trained, compensated and staffed for the important work they do to keep us safe.
So in the 2013 Budget we will provide an additional $8 million to the Fiji Police Force to improve their operational capacity, to bring the total allocation to $92 million. This includes an increase of $6 million to cover operational costs.
We have allocated $2.5 million to purchase equipment and $800,000 to upgrade police stations and quarters.
The Force’s budget has been reorganised for 2013.  Unit heads will now be responsible for financial decisions. This reduces bureaucracy and will lead to improved efficiency, responsiveness and accountability.
We will also strengthen the prison system, adding more than 100 staff to the ranks of prison officers. The Fiji Prisons and Corrections Services will receive $21 million in 2013, including a $3 million increase in their operational budget.
In addition, $700,000 will be allocated to upgrade and maintain staff quarters and prisons. Funds will also be provided to install CCTV cameras in our prisons that will help to minimise security breaches.
I am pleased to announce that the Yellow Ribbon Program will continue in 2013 with an allocation of $200,000. The program has reduced the rate of recidivism from 21 per cent in 2009 to 3 per cent in 2011.
We have also made good progress in eliminating the corruption at all levels that has long plagued our country. We are winning, but the war on corruption is not over. Corruption steals from ordinary Fijians and erodes the people’s faith in their institutions, both public and private.
Complementing law enforcement, FICAC has been diligent and assertive in investigating and rooting out corruption. In 2013, it will receive $8 million to continue its critical work.
LEGAL SERVICES
We are determined to provide ordinary Fijians with better access to justice and legal services.
Justice should be the basic right of every Fijian, not just a luxury for those who can afford it. We cannot talk about the rule of law if the weak, the vulnerable and the poor do not have access to the justice system.
In 2013, we will provide $2 million for the operational costs of legal aid offices throughout Fiji, including those that have been recently set up in Nadi, Rakiraki and Nausori and soon to be opened in Sigatoka and Nasinu.
We are also bolstering the court system.
$4.5 million is provided for much needed extensions to the Lautoka High Court.
$1 million has been allocated to continue the refurbishment of the Suva Court Complex and to upgrade courts across the country. We will also spend $300,000 on equipment and sound systems that will make the courts more efficient.
$350,000 is budgeted to relocate the Ba Magistrates Court to higher ground and improved premises.
People living in isolated parts of Fiji should be able to have access to the courts without having to travel to major centres.
That is why we have allocated $300,000 to hold court sittings in some of the outer islands. In the past, there were rare or no court sittings in Rotuma, Koro, Rabi, and the Lau Group. Next year, this will change.
And we will also spend $400,000 to improve the frequency of court sittings the in rural parts of the country, including Nabouwalu, Vunidawa, Taveuni, Rakiraki and Tavua.

INFRASTRUCTURE
While our political and electoral reforms seek to create a modern and truly democratic state, we can never truly be a modern state until we improve our infrastructure. A country’s infrastructure is its most basic resource for promoting opportunity, growth and equality. Simply put, a sound and modern infrastructure increases productivity, eases the burdens of daily living, and gives greater access to services. We must make a firm commitment to having the most modern infrastructure.

ROADS
Every Fijian knows that our roads desperately need attention after decades of neglect. First, we needed to reform the management of our roads and end the incompetence, corruption and basic lack of road-building skills.
This is why the Department of National Roads has become the Fiji Roads Authority (FRA).
We needed a clean slate. We needed to build the capacity of FRA to plan, build, and maintain good roads for the nation. And so we are setting aside $422 million in this budget for roads and bridges, an increase of $182 million.
We have hired MWH from New Zealand to help oversee this process. We need overseas companies to not just fix our roads but to pass on skills to Fijians.
Earlier this afternoon, I signed three five-year road maintenance contracts with foreign companies – all from New Zealand - to begin work on major road improvements across the country.
These companies will bring new technologies and methods, and will provide long-term solutions, not temporary fixes. They will give us better results and a better return on our investment.
Two companies will work in the Central and Eastern Divisions, one in the West and one in the North. They will not only maintain and rebuild our roads; they will restore our capacity to build roads ourselves.
This means that many unestablished employees from the old Department of National Roads will move from the public sector to the private sector. I am confident that many of these casual workers will be employed by our new partners.
Major road construction will continue in Buca Bay, Moto, Serea and Sigatoka Valley through funding assistance from the Exim Bank of China.
We are also embarking on a major new project in Vanua Levu to tar seal the road from Nabouwalu to Dreketi. This is a huge boost for the economic prospects of the North.
We are also allocating $13 million for the development of rural roads in the rest of the country.
Four-lane roads will be built between Nakasi and Nausori Airport and Nadi and Denarau. We expect this work to commence in April of next year, with the assistance of the Exim Bank of Malaysia.
The FRA will also be responsible for the management of all bridges in Fiji. We are all aware of the woeful state of some of our bridges and the need to rebuild or improve some thirty bridges across the country.
But we also need to build new bridges, and so a comprehensive plan of action is being drawn up for the proper management of our bridges.
WATER
Access to clean water is a basic right, yet in a country with such high rainfall and major rivers, it is astonishing that many ordinary people still don’t have it.
That is why I am pleased to announce that we are allocating $110 million to improve and expand the services of the Water Authority of Fiji. This is an increase of $3 million from 2012.
We will continue major projects such as the Suva-Nausori sewerage and water-supply schemes and the Nadi-Lautoka, Ba, and Labasa regional water-supply schemes.
34 rural water schemes have been completed this year, with more to be undertaken in 2013. In addition, a number of feasibility studies will be undertaken to identify new water sources to provide for the increasing demand in the Suva-Nausori corridor.
To ensure that all Fijians have safe drinking water, we will spend $250,000 on water testing equipment.
All of this is yet another demonstration of our commitment to deliver basic services to every Fijian.
RENEWABLE ENERGY
We must continue to reduce our reliance on fuel imports, which have now reached a staggering $ 1 billion a year.
We cannot control international prices of commodities.  But it is our responsibility to look for alternative energy sources.
My Government is committed to ensuring that we meet at least 90 per cent of our total energy requirements through renewable sources. 60 per cent of our energy needs are already being met from renewable energy now that the Nadarivatu Hydro Scheme is on line.
Because of the benefits expected from this recent investment in our electricity infrastructure, I am proud to announce that Government – based on an assessment by the Commerce Commission - will reduce the price of electricity by five cents a unit across all tariff bands effective from 1 January 2013.
We will contribute $1 million towards the Somosomo Hydro Power project.
In 2013, a Green Tax based on the “user pays” principle, will commence. The Green Tax will involve the imposition of an extra two cents a litre on all imported fuels, except kerosene, white benzene and pre-mix.
The objective of this policy is to promote a cleaner environment and reduce our dependence on imported mineral fuels.
To ensure this tax does not place a cost burden on public transportation, a rebate of 2 cents per litre will be provided to the bus industry.  Inter-island vessels and fishing vessels are exempt from the two cents per litre increase.
We have increased spending on the development of alternative fuel.  This year, we commenced bio-diesel projects in Lakeba, Matuku, Moala, Vanua Balavu and Rabi and Gau. For 2013, we have allocated an additional $2.5 million to set up further bio-diesel plants elsewhere.
In our continuing effort to find appropriate renewable energy sources for Fiji, we will set aside $400,000 to study the feasibility of the many different renewable energy sources available, including wind, solar, hydro, biomass and geothermal.
In addition, $200,000 is allocated for the development of bio-gas projects, and we are purchasing testing equipment for bio-fuel at a cost of $858,000.
We will increase spending on rural electrification to $8.5 million. In addition, the grid will be extended to reach more people in Nayavu-Wainibuka, Mataisuva in Rewa, and Wailevu–Cakaudrove.
We will retain existing incentives for the use of renewable energy, including duty concession for imports of equipment used to produce renewable energy.
INFORMATION & COMMUNICATIONS TECHNOLOGY
Ladies and Gentlemen, my Government is committed to establishing Fiji as the regional hub of telecommunications in the Pacific.
We are centrally located, and our size and advanced infrastructure compared to our neighbours make Fiji the obvious point to centralise broadband infrastructure for the region. We are the first Pacific Island country to have a National Broadband Policy.
Developing our broadband capacity is an important way to spur social and economic development. It is also crucial given the vast areas of ocean separating our islands.
Modern technology can create many opportunities for businesses, education, health and finance. It provides access to a world of information and helps keep families and communities, often separated by vast distances, connected.
Government has initiated some fundamental reforms in this sector, and introduced laws that have paved the way for more competition, greater innovation and improved products and services to the people. Fiji’s telecommunication sector offers some of the most competitive rates for services anywhere in the world.
One of my Government’s objectives has been to bridge the digital divide between the rural and urban, the rich and the poor. We want the benefits of technological advances to be equally accessible for all Fijians and not just the elite.
We will be opening ten more tele-centers in 2013 in rural communities and designated schools to provide internet access for ordinary Fijians.
As testament to our leadership role in this area, Fiji will host and allocate funding for regional ICT meetings over the next two years.
From 2013, duty on smart phones will be reduced to zero so that more Fijians can gain access to data transfer and the internet.
CREATING EQUAL OPPORTUNITIES FOR ALL FIJIANS
You all know the importance my government places on equality and the need for us all to work together to forge a prosperous, united country.
Every Fijian should have exactly the same opportunity to succeed in life.
It is up to them how much they make of it. The role of Government is to provide a level playing field and the framework for individuals to succeed and create a good life for themselves and their families.
POVERTY ALLEVIATION AND SOCIAL PROTECTION
Those Fijians who live below the poverty line need more than our sympathy. They need our assistance to help provide for themselves and their families.
Government must do what it can with our limited resources, and we are implementing major reforms to our social welfare system.
We will target our available resources at those Fijians who need it the most.
This will allow Fiji’s social welfare system to better and more widely cover those who meet the criteria and will minimise abuse.
Under this system, a household will receive a maximum of $150 per month, including a $30 food voucher.  Nearly 13,000 poor households will benefit, and we will increase the coverage of our poor population from the current 3 per cent to 10 per cent.  The total budget for this program is $22.7 million.
For the first time, Government will introduce pensions for persons aged 70 years and over who do not have any form of income or pension, or who have never been part of a superannuation scheme. As many as 9,000 Fijians will benefit from this assistance. The budget for this program is $3.2 million.
The Care and Protection Program, which targets children, will continue with a budget of $5.9 million.
With an allocation next year of $500,000, the “Welfare Graduation Scheme” focuses on moving recipients from “welfare to workfare.” Fiji cannot support a culture of dependency. We must commit ourselves to the idea that poverty is a temporary state.
As a society, we must uphold the value of work and self-sufficiency. When people move from welfare to work, they regain their self-esteem and confidence. Some participants in this programme have already set up their own businesses or are finding permanent employment.
The subsidised bus fare program will continue for the elderly and the disabled.
The total budget allocated for social protection programs is $32 million.
In order to ensure that this money is spent properly, we will stamp out social security fraud.

HOUSING
We will continue to provide affordable housing to those Fijians who need it.
We will continue our program to provide debt relief for those who are unable to meet their obligation to the Housing Authority. Hundreds of families are being relieved of the worry of having a mortgage debt they cannot afford to pay.
Through Government’s “social housing policy,” implemented through the Housing Authority, some 200 families will finally have dwellings they can call their own after their loans are written-off. We are setting aside another $1 million for this program in 2013.
We are allocating $600,000 as a grant to the Housing Assistance and Relief Trust, which will cover the construction of new HART homes and maintenance of existing ones.
We will also provide $1 million to the Public Rental Board as rental subsidy for low-income tenants.
Many Fijians have grown impatient with the formal system for acquiring housing and have created informal settlements. These settlements can create unsafe conditions for residents and can cause chaos in urban and rural areas, but they are home to many people who have no other alternative.
To address the growth of informal or squatter settlements and improve the overall quality of housing, we will provide $1 million for the squatter upgrading and resettlement project. In 2013, this will be directed towards completing ongoing projects at Caubati, Sasawira, Ledrusasa, Cuvu and Narere.
The Sustainable Rural Housing/Income Generating Project will continue with an allocation of $400,000 to provide both housing and support for income-generating agricultural activities. The targeted areas for 2013 will be Nalotawa and Nativi in the West, Maumi and Toga in the Central division and Vunivutu in the North.
Through funding assistance from the Exim Bank of China, the construction of new housing estates in Raiwai and Raiwaqa will continue in 2013.
The Housing Authority project in Tacirua East and Nepani will also continue next year, as will the Waila City Project.
Thanks to a partnership between the Reserve Bank of Fiji and Housing Authority, citizens earning less than $16,500 will be able to access affordable home financing. Through this facility, the Housing Authority will able to provide housing loans at competitive rates to grow home ownership.
To complement this initiative, people who build a new house as their primary residence will again be able to claim a VAT refund up to a maximum of $120,000 in 2013.

EMPOWERMENT OF WOMEN
Women are the backbone of their families and communities.  But the inherent right of equality is still denied to far too many women in Fiji. And this is a wrong that my Government is doing everything in its power to right.
We know that women play as important a role as men in social and economic development. We want to provide more women with the skills and education to provide for themselves and their families.
My Government will continue to provide the necessary support to enable all women to bring about positive changes for themselves, for their families and for their communities.
We are giving $550,000 to implement the Women’s Plan of Action.  This will help fund income-generating projects, legal literacy training, and empowerment programs in decision-making.
In addition, $150,000 is allocated for the construction of four Women’s Resource Centers in Serua, Namosi, Ra and Macuata.
My Government has also endorsed the development of a Memorandum of Understanding between Fiji and the Barefoot College of India to establish a regional branch of the college in Fiji.  This could greatly benefit our rural women. The curriculum is designed specifically to give practical, on-the-job training to rural dwellers and those with limited education.
GOVERNMENT SERVICES
Ladies and gentlemen, my Government is committed to reforming and modernising the civil service.  As servants of the public, we must always remember that we are here to serve our fellow Fijians.
PUBLIC SERVICE PAY
From 1 January 2013, all established staff in the civil service will receive a minimum salary of $10,000 a year. This pay rise will benefit 1,663 civil servants.
In addition, all unestablished Government wage earners will receive a 10 per cent pay rise, also effective from 1 January 2013.  This pay rise will benefit 2,878 government wage earners.
We will introduce performance-based bonuses throughout the civil service.  This underscores my Government’s fundamental belief that individuals should be rewarded on merit and accomplishment. No longer will seniority and personal connections be a path to advancement. We want to reward the best people and keep them working in Government.
However, this bonus will be paid out only to those who perform over and above what is expected of them. Bonuses for performance in 2013 will be paid in 2014.
We must retain highly skilled and capable officers in the civil service. Too often, they are lost to the private sector or regional and international organisations. By setting salaries that recognize the different skill requirements for each position, we will retain more skilled and competent officers in the service.
The civil service is doing better, but we will not rest until the job is done. We will continue to work to eliminate red tape, buck passing, incompetence, slackness and corruption in the civil service. At same time, we will continue to improve the working conditions of civil servants.
PUBLIC SECTOR REFORMS
My Government is investing in an upgrade of its information technology systems to place many of its services online and allow for around the clock access to government services.
This revolution is a joint venture between Government and the private sector.  As a first step, a national IT infrastructure is being set up for the Civil Service and State-owned enterprises.
It will pave the way for the introduction of a portal called “Fiji Service,” through which individuals and businesses can access a range of Government services. Some key services will go online by May, 2013.
Government will also introduce a national switch to which all banks and financial institutions will be required to connect.
Called “FijiPay,” this interchange network will facilitate easier and cheaper electronic transactions on the part of businesses and consumers.
For too long, Fijians have been saddled with excessive charges when accessing electronic transactions. We are determined to create a level playing field in the financial area.
All these initiatives are designed to make Fiji the IT leader in the region and a preferred hub for data processing services.
Recently, Government has collaborated with Vodafone to facilitate the payment of salaries through the M-Paisa system for those civil servants working and living in remote parts of Fiji.
Electronic Funds Transfer is now being rolled out across Government. This will result in cost savings by eliminating the need to print cheques.
We will also make our financial reporting fully comply with International Public Sector Accounting Standards.
In addition, we will continue to corporatise and privatise Government Commercial Companies and related entities. The sale this year of Fiji Dairy Limited is one such example of collaboration with the private sector.
We will also sell government held shares in FINTEL to ATH to rationalise the ownership structure to ensure that it results in better quality and affordable services in the telecommunications sector.
As stated earlier, Government will sell its overseas mission properties to FNPF and lease them back. This will reduce the operational and maintenance costs of Government.
We will also continue to explore the outsourcing of Government services and functions to improve efficiency and deliver better results to the Fijian people.
Phase 3 of the functional review of Ministries and Departments will continue to find ways to eliminate waste and redundancy.
Finally, in a bid to make Government services more accessible to all Fijians, we have established Government Service Centres in Nausori, Lautoka and Labasa--“one stop shops” that will offer a broad array of services locally.
Government will provide $1.5 in 2013, and another $1.5 million in 2014, towards the cost of the relocation and construction of the Nausori market, which services one of the most heavily populated centres in Fiji.
INDUSTRY
For ordinary Fijians to prosper, we all need healthy industries to provide jobs and create wealth for the entire nation.
My Government firmly supports all industries to prosper and reinvest in new equipment and technology.

TOURISM
Tourism Fiji will again receive $23.5 million to fund the cost of marketing Fiji abroad. The recent rebranding of the organisation under the slogan “Fiji: Where Happiness Finds You,” and our national airline as “Fiji Airways,” is expected to further boost the performance of the tourism industry. It will cement its place as Fiji’s number one foreign exchange earner.

SUGAR INDUSTRY
Protecting and modernising the sugar industry is a key national priority.
The industry that supports the livelihoods of approximately 200,000 Fijians needs to be sustainable, well managed and properly equipped.
There is much good news to report. There has been a marked increase in the renewal of ALTA leases, more acres are being cultivated, the ratio of tonne cane to tonne sugar has improved, and mills are operating more efficiently. Cane and sugar production would have been much higher this year had it not been for the floods.
And I am very proud to announce that the Fiji Sugar Corporation has made a remarkable financial turnaround. Consequently, Government’s direct financial injection into FSC will cease in 2013. This has been no small achievement, given the state of the FSC at the time my Government decided to intervene to save the industry.
However, we will continue to encourage a strong and healthy sugar sector with a budget of $15 million for the Ministry of Sugar.
We will also implement new laws to complete the restructure of FSC and the sugar industry and to better position this key industry for the future.
$2 million is allocated to upgrade cane access roads to ensure a consistent supply of cane to the mills and minimise mill stoppages due to lack of supply.
We will also spend $600,000 next year to upgrade the bridge at Kavanagasau in Nadroga.
Sugar farmers need to play their part in these vital reforms. That is why we are introducing a cane quality payment system next year, with an allocation of $4.4 million dollars in 2013.
We will provide $600,000 to help farmers acquire cultivators, ploughs and other vital farming implements.
Fiji will host the International Sugar Organisation conference next year. We have allocated $250,000 for this prestigious event.
AGRICULTURE, FISHERIES AND FORESTS
Today, I announce a major initiative to encourage our young people to become farmers. We will set up a scholarship program in conjunction with Fiji National University in which 50 Form Six or Seven graduates each year will attend a 12 month certificate course that trains them in various agricultural disciplines. When they graduate, each student will receive a loan package to the value of $70,000, to cover the costs of:
  • 100 acres of farm land
  • A tractor and basic farm implements
  • Fertilizer and other materials
  • A house and shed
  • And start-up cash of $2,000
Each student will be supervised by an agricultural extension officer, and given specific performance targets. The Government hopes to attract many more young people to become farmers, give them sustainable livelihoods, boost the nation’s food security, and reduce Fiji’s dependence on imported food.
Collectively, $94 million is allocated to the Ministries of Agriculture, Fisheries & Forests and Lands & Mineral Resources in 2013.
Agriculture is a vital sector of our economy, and we especially need to do what we can to help our nation’s farmers maintain a productive and efficient agricultural sector.
Existing programs under the Department of Agriculture will continue next year with total funding of $5.6 million.  This money will cover the development of coconut, cocoa, potato, ginger, vanilla and rice crops.  We will further boost the rice revitalization program with technical and financial assistance from the Chinese Government.
To do their jobs, farmers need cheaper tools. In 2013, we are expanding the zero-duty rate for agricultural implements to make them more affordable. All other current agricultural incentives will continue.
An additional $2.7 million will also be allocated for livestock development.
$1 million will be allocated for the development of the dairy industry.
In the fisheries sector, we have provided $1.8 million for the development of various fisheries resources such as aqua-culture, mari-culture and the raising of brackish water species, as well as seaweed and pearl cultivation.
We are providing $600,000 to establish a multi-species hatchery in Ra.
In forestry, we will promote sustainable forest management practices by allocating $500,000 for the Biodiversity Enhancement and REDD Plus programs.
$5 million is also allocated for the Land Reform Program, to make more land available for productive use.
We will also continue the highly successful CBUL program that encourages landowners to re-lease land for productive use. Under this program, Government subsidises lease payments by 4 per cent. This increases lease payments from 6 to 10 per cent.
SUPPORTING MICRO AND SMALL BUSINESSES
Ladies and Gentlemen, experts around the world have recognized that micro, small and medium enterprises are powerful forces for lifting people out of poverty.
Small businesses drive economies because they add to growth by creating jobs and generating revenue. And they do not always remain small. Many grow quickly to become medium and big businesses.
I am pleased to announce that the Credit Guarantee Scheme we set up last year under the Reserve Bank of Fiji has increased lending to the SME sector. During the first nine months of 2012, a total of 163 eligible SME loans valued at $8.7 million were registered under the scheme.
In 2013, Government will allocate an additional $1.5 million for this program. We hope this will encourage more commercial-bank lending to SMEs.
The Northern Development Program and the Integrated Human Resource Development Program will receive $2 million in 2013.
We will also provide $500,000 to the National Center for Small and Micro Enterprises Development (NCSMED) to support their operations.
In addition, the Fiji Development Bank will be provided approximately $290,000 to subsidise interest on small business loans.


MANUFACTURING
We will continue our zero-rated duty incentive for the importation of all plant machinery and equipment for manufacturing. We note that this initiative has already created new investment and we will extend it for another year.
We will also continue to give tariff support to local manufactures to help them to grow. We will retain the current 40 per cent export income deduction.
Government will again provide the Textile Clothing and Footwear Council a marketing grant of $300,000, over three years, to develop new markets for Fijian -made products and grow employment.
FOREIGN INVESTMENT
We are providing $1.2 million to Investment Fiji to assist them in marketing Fiji as a place to invest.
We are also removing the $250-thousand minimum investment requirement for foreign investors. This has acted as a restriction on investment opportunities and the change will open up further avenues to attract capital.
More and more films are being shot in Fiji, especially by Bollywood film companies. We will give an additional $100,000 to Film Fiji to grow this important new market

TAXES
We will continue with the ambitious tax regime we introduced last year.
Any fiscal policy must balance the needs and demands of the people, the economy and Government.
If Government asks for too much, it limits the amount that can be reinvested in new business, growth, and creating jobs.
If a Government asks for too little, it limits its ability to support the many worthwhile things that Government can do - such as giving access to education, building new roads and hospitals, providing electricity and drinking water, and supporting the disadvantaged in our society.
We believe that a tax system must be simple and equitable. It must encourage investment and support business, while making sure not to overburden ordinary Fijians.
We must make sure that we are asking a fair amount from individuals and businesses alike. And we believe we are.
The 2012 Budget took significant steps in liberalising our tax system by reducing tax rates to 20%, benefiting 99% of our individual taxpayers. It also reduced customs duty rates and put in place attractive incentives for foreign investment.
Because we have lowered taxes, we expect everyone to pay their share.
Tax evasion and customs fraud do not simply rob Government of money, but they rob ordinary law-abiding Fijians who rely on the services Government provides.
We also strongly believe in the principle of “user pays,” that those who make use of certain services should be the ones who carry the cost. It is a basic issue of fairness.
In 2013, we are going to further liberalise and simplify our tax system and continue our efforts to get Fijians to comply with the tax laws.
One of our key initiatives is to raise the tax threshold for individuals, the point where tax kicks in for any income earner.
We will raise it from $15,600 to $16,000 in 2013. This means that the tax threshold has almost doubled in the five years since 2007, when it was $8,840. So now, far more Fijians at low income levels will not be paying taxes at all.
Another major initiative is that we are simplifying the way people pay tax. In future, Pay as You Earn taxpayers will not have to file a tax return at the end of the year.
What their employers extract will be their sole obligation. But by shifting to this method, we are also ending the system of claimable tax allowances.
Any losses for individual taxpayers will be more than offset by the generous tax cuts we announced last year.
This change streamlines the operations at FRCA, which will no longer have to process more than 40,000 tax returns every year. And it creates more certainty for tax payers.
We are also making it more attractive for foreign investment in Fiji.
From 2013, a 17 per cent corporate tax rate – plus other incentives - will be available to any foreign company that establishes its regional or global headquarters in Fiji.
This will be effective from 1 January 2013 and further details will be announced in due course.
Companies that list or are listed on the South Pacific Stock Exchange will now pay a reduced corporate tax rate of 18.5 per cent – as opposed to the normal corporate tax rate of 20 per cent. Existing tax deductions and incentives for listing will continue.
In an effort to stimulate economic development, the region from Korovou to Tavua will be declared Tax Free Regions for the agricultural sector. A 13-year tax holiday will be in place for new investments in the agricultural sector. And a 20 year tax holiday will be available for those who set up new dairy farms in the region. Tariff incentives will also be put in place to help Fiji Dairy Limited grow its share of the market while encouraging more local milk production.
Ladies and Gentlemen, we consume nearly 77 million litres of milk each year but produce only 10 million litres. With the increased farm gate milk prices paid to farmers, new incentives and new investment by Fiji Dairy Limited – including chilling plants - we expect this to change.
The Employment Taxation Incentive that provides 150 per cent tax deduction for the employment of first time school leavers will be extended to 2014.
All current zero-rated duties and import incentives will continue next year.
While we will continue to impose the age limit on second-hand vehicles, we will now allow the importation of older vehicles so long as they comply with Euro 4.
We also need to bring Stamp Duty rates up-to-date. The Stamp Duty rates have not been reviewed for many years. This will involve increases that better reflect current costs.
Stamp Duty payable on mortgage will be 1.75 per cent, and 3 per cent for transfer. All new rates will come into effect from 1 January 2013.
All existing stamp duty exemptions will continue, including the exemption for first home buyers.
There will be several changes in 2013 that will simplify tax administration and improve compliance.
First: The Social Responsibility Levy will be renamed the Social Responsibility Tax, which will allow taxpayers to benefit from any Double Tax Agreements.
To prevent tax planning such as the restructuring of salary income, especially by taxpayers earning around $270,000, the Social Responsibility Tax for resident and non-resident taxpayers will be amended to use an incremental system.
Second: To promote simple administration by financial institutions, the computation of credit card levy will be aligned with the individual billing cycle as opposed to the standard calendar monthly cycle.
Finally: To enhance compliance, my Government will implement a number of changes in 2013:
  • Garnishee Order Provisions to also apply on bank overdraft accounts;
  • Companies to be liable for shareholders tax liabilities;
  • Capital Gains Tax return to be lodged in all cases and not only in payable cases; and
  • Agents who manage commercial or home-stay properties for overseas owners shall be responsible for the lodgment and payment of Service Turnover Tax to FRCA.
CONCLUSION
Ladies and Gentlemen, the 2013 Budget is responsible and reflects both our means and our needs. It builds on the policies of my Government over the past few years and our philosophy of prudent financial management, service delivery, and consistency. It provides us with better infrastructure and strengthens our economic base. It is a budget that improves the lot of all Fijians. It empowers them and provides them with better opportunities.  It is an investment in all our futures.
Ladies and Gentlemen and my fellow Fijians, I commend the 2013 Budget.
Thank you. Vinaka vakalevu.