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Regime keeps doing the dirty on Fiji people

November 19, 2013

Regime keeps doing the dirty on Fiji people Bainimarama and Khaiyum to sell off state assets. Illustration: Truth for Fiji blog Economist and academic Dr Wadan Narsey and the Social Democratic Liberal Party are in unison over the flaws of the regime’s latest budget. Narsey’s full assessment of the budget is on his website (http://narseyonfiji.wordpress.com/2013/11/13/2690/) and excerpts from a SODELPA statement follow on. Government Asset sales By no stretch of the imagination could selling off public assets have been part of the Bainimarama Government’s original justification in doing the 2006 coup. Yet they are planning largest public asset sale in Fiji’s history (previous largest one: $253 millions from ATH sale to FNPF). The $475 millions from Asset Sales (Budget Estimates, p. 373) are expected to include: $200 million from sale of government investment in economic services (Air Pacific, CNB, FHC, FSC., etc); $184 million from sale of government investments in infrastructure (AFL, ATH, FINTEL, FSHL, FTL, PFLL, PTL, etc), and $40 million from sale of Fixed Assets ($40 million). Note that private sector investors will very naturally “cherry-pick”, buying only the shares and assets which are profitable, and rejecting the loss-making public enterprises. Which sensible person would at all think of selling the good assets while retaining the loss-making ones? Yet that will be the inevitable outcome of the Bainimarama Budget plans. To repeat, the Budget estimate claim of the Net Deficit being a mere 1.9% of GDP will be achieved only if FRCA can raise the required revenues and Government Asset sales do realize $475 millions. Note however the inherent deception in presenting this Net Deficit figure of a low 1.9% of GDP to be achieved by the 2014 Budget. No responsible accountant ever claims a good profit result by including the proceeds from the sale of assets. Without the Asset Sales revenue of $475 millions, the Net Deficit in 2014 would be $639 millions and 7.7% of GDP, requiring a large increase in borrowings and Public Debt. Few will notice or remember the sale of public assets. A deliberate strategy? In any case, if there are any revenue shortfalls in 2014, they will be covered either by higher borrowings than estimated (thereby increasing the Public Debt which the future generation will pay) or by cutting back on the expenditures (which the public have already joyously welcomed). Either way, the public will not know the facts until after the planned September 2014 Elections, when the next Budget is delivered in November 2014. Any broken 2014 Budget promises are unlikely to influence the outcome of the September 2014 elections (unless by some miracle, the media is extra vigilant till then). The 2014 Budget also explains partly why the Bainimarama Regime rejected the Yash Ghai Draft Constitution which would have required them, once the 2013 Constitution was approved, to give way to an Interim Administration which would take the country to elections. Had they done so in September 2013 (when the President “assented” to the 2013 BKC), the Bainimarama Government would not have been able to use the 2014 Budget to enhance their chances in next year’s election, by distributing tax-payers’ money throughout the country over the next ten months, clad in salusalus. (To get a good idea of how geographically strategic the 2014 Budget has been, just mark on a map of Fiji, all the place names mentioned in the 2014 Budget Address). Lack of accountability and transparency This will also be the seventh year when the Bainimarama Government has refused to make available to the public, the Auditor General’s Reports, which might be able to verify whether the numbers presented in the budget documents are reasonably correct. No one knows whether this government has been misusing any of the public’s hard earned money for the last seven years, or how accurate are any of the important numbers given in the Estimates. When asked at the FBC panel discussion for the missing Auditor General’s Reports, Khaiyum suavely beat around the bush, while the docile panel and audience refused to exercise their taxpayer’s right to demand a clear answer. For several years now, Bainimarama and Khaiyum have also refused to answer whether some Ministers have been receiving multiple salaries, and why through a private accounting company owned by Khaiyum’s aunt (Dr Nur Bano Ali) who frequently fronts up to the media justifying Government policies. Also setting a trend now, the public could not get the detailed budget estimates on the day of the budget or even three days later, thereby discouraging informed commentary on the day of or after the budget. Salaries of Permanent Secretaries and Ministers Given that the Government was going to increase public sector salaries in the 2014 Budget, why did they increase Permanent Secretary salaries just three weeks before, and that by more than 100%? Of course, if the increases in PS salaries were part of the 2014 Budget announcement, the Bainimarama Government would be asked to explain why the increases for the Permanent Secretaries were of the order of 100%, while the Deputy PS’s and others, were restricted to 20%. Labor market economists would point out that the damaging human resource “leakage” from the Fiji Public Service is far more serious at the technical and professional levels, than at the PS level- none of whom have ever resigned because of a better job in the private sector. [Tax-payers will remember that the current PS Finance went along with the ANZ-led “scheme” for borrowing F$500 million dollars in foreign bonds at 9% interest, when an IMF loan was available at 3%, thereby costing the Fiji tax-payers an extra $30 million in interest per year (which we are currently paying in hard-earned foreign exchange).] As the September 2014 election approaches, more and more voters will be asking the Bainimarama Government to explain what their ministerial salaries are, and why some of them have been paid through Nur Bano Ali’s company. Of course, it will be easier to justify high ministerial salaries, if their Permanent Secretaries are also on high salaries, somewhat closer to them than their old salaries. In a statement the Social Democratic Liberal Party notes that the regime last year sold government assets to the value of $25 million and that further sales in 2013 are expected to bring in $19 million. The party’s general secretary, Pio Tabaiwalu, says the 2014 Budget asset sales will boost government revenues by $475 million from the sale of Government’s shareholding in Airports Fiji Limited, from the partial sale of government’s interests in Ports Authority of Fiji and Fiji Electricity Authority. “All three entities were created by previous elected Governments and the Bainimarama regime had no hand in them. However, their operations were severely affected by the impact of the military coup on 5th December, 2006. Their improved performance today has not been due to greater efficiency but by exorbitant charges levied against the people of Fiji.” Tabaiwalu says in the absence of a democratically elected Parliament the proposed sale is likely to be decided by the Attorney General and the Prime Minister and then rubber-stamped by the regime’s cabinet. The party also says a lower tax rate for companies listed on the South Pacific Stock Exchange will not necessarily persuade private companies to turn public. Instead, this company tax reduction is likely to make the rich richer. “Most of the companies on the SPSE are owned by locals who are already very wealthy. The huge reduction in this tax rate will give them greater wealth, via higher dividend payments. The 2014 Budget will therefore make some of our wealthy people richer.” The party says said the seven years from 2007 have been characterised by: · high unemployment · high inflation · very high prices of goods and services · alarming increase in the number of people living below the poverty line · static wage levels; and · increasing number of people living in squatter settlements. The party says the 2014 Budget for pay rises for civil servants of 4% to 23% will not compensate for the loss in their purchasing power due to inflation of more than 30% over the period. “In fact, even after the wages adjustments in 2014 the position of civil servants will still be worse off than their position prior to the coup of 5th December, 2006. The allocation of $22 million for social welfare payments in 2014 has remained more or less the same for several years, even though people living below the poverty line has jumped from 32% in 2006 to about 50% of the population in 2013. “The allocation of only $5 million in the 2014 Budget to assist the more than 11,000 families now living in squatter settlements is ridiculous, reflecting a lack of respect and care for the poor.”

 

 

Source: C4.5; Posted by Rusi Varani for SWM

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