Deputy Prime Minister and Minister for Finance, Professor Biman Prasad, has announced that the government is exploring various options to lower the cost of living.
The Fijian Competition and Consumer Commission (FCCC) will decide soon. According to Prasad, prices are predominantly influenced by market forces, which are determined by s demand and supply and the costs of production, labor, raw materials, transportation, storage, taxes, and other associated expenses.
The government’s ability to impact product prices is limited, and any decisions involve trade-offs. For instance, if the government reduces the Value Added Tax (VAT) from 15 to 9 percent, it will lose $600 million in revenue.
Specifically, for every 1 percent reduction in VAT, the revenue loss amounts to $100 million. The Opposition is contemplating increasing the fiscal deficit to double digits and adding an extra $600 million in loans.
However, it’s important to note that the government cannot borrow this additional $600 million due to financing limitations.
Prasad highlighted that the government plans to allocate approximately $750 million this year to support the population, with the supplementary $600 million in revenue aiding this effort. He also emphasized that although the economy is not contracting, the growth forecast has been revised from 3.4% to 2.8%.
The Deputy Prime Minister is factoring in the budget’s positive impact on private sector investments and measures to enhance the business environment.
Efforts are underway to address immigration policies and other barriers that may impede more significant investment. The government aims to raise the growth rate to 4 to 5 percent, up from the current 3 percent trend.
In addition, the Deputy Prime Minister highlighted that over 22,000 individuals from all four divisions were consulted for the 2024-2025 National Budget as part of the National Development Plan consultations.
An independent Fiji Higher Education Commission has registered and approved Pacific Polytech. Professor Prasad commended its success in replacing the failed technical colleges established by the former government, which incurred a loss of $30 million.
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