Mister Speaker Sir,
Hon. Prime Minister,
Hon. Leader of Opposition,
Members of Parliament,
Fellow Fijians,
Thank you for allowing me to take the floor to deliver my statement in support of the 2020-2021 National Budget.
Mister Speaker Sir,
Over the years, we have provided Fijians what matters to them most. Affordable and accessible education and health care, better roads and ports, improved connectivity and the ability to make a good living.
Mister Speaker Sir,
Without the guidance and vision of the Hon. Prime Minister, Fiji would not have achieved the growth we experienced over the past decade and achieved COVID contained status. With the greatest sincerity, Hon. Prime Minister Sir, we thank you for your leadership. I also thank the Hon. Attorney-General and Minister for Economy for an innovative and inclusive budget for the betterment of all Fijians.
Mister Speaker Sir,
The world and our country are facing once in a lifetime challenge with COVID-19 pandemic. The 2020-2021 budget gives us hope by providing a well-designed plan to bring us out of this crisis and set us on the road to recovery.
Mister Speaker Sir,
In this turbulent time, the only certainty is uncertainty that we face. Hence, in order to overcome that challenge before us, we need to be steadfast, we need to be unified, and need to be loyal to the wellbeing of every Fiji and our country.
Mister Speaker Sir,
What Opposition has stated so far is polar opposite. Instead of unity, Opposition has preached disunity. Instead of togetherness Opposition has preferred divisiveness. Instead of truth, Opposition advocates untruths. Instead of honest analysis, Opposition chooses to paddle unfounded conspiracy theories.
Today, the Opposition went back on their PACER Plus bandwagon, yet again with no research done. Mr. Speaker Sir, the Opposition should stop speaking about PACER Plus because they clearly don’t understand it. My Ministry will be happy to run a seminar for the opposition on PACER plus so that these rather uneducated and embarrassing remarks stop.
By joining the PACER Plus, what benefits are we giving to our Fijian manufacturers? In fact, PACER Plus will require zerorising of over 80 percent of Fiji’s trade. PACER Plus will result in the liberalisation of sectors, where Australia and New Zealand industries are more competitive, have economies of scale and are more powerful than Fijian industries. This will be detrimental to many of our Fijian industries.
Please understand, PACER Plus will not provide any additional access to the Australian and New Zealand markets, then what we already have. In addition, PACER Plus will systematically erode our policy space and sovereignty and tie our hands with regards to future trade agreements with any third country.
Mister Speaker Sir,
The Hon. Leader of Opposition also stated that the reduction of tariffs was ‘worrying and uncalled for’ and would damage Fijian industries. Yet again with no research done. Here are the facts –
Whilst the new tariff structure focuses on re-invigorating our trade and removing bureaucratic processes in obtaining duty concessions, protection is still accorded to domestic manufacturers on similar commodities. Fiscal duties and import excise tax have been reduced on items such as machinery, mechanical appliances and parts, to white goods, vehicles, hygiene products and canned food products.
Mister Speaker Sir,
The main reason for the reduction in tariffs is to stimulate economic activity in the manufacturing sector. The import of raw materials has been made cheaper. For example, fiscal duty on footwear and components to manufacture footwear has reduced from 32 to 15 percent and import excise reduced from 10 percent to 0. This leads to reduced cost of production, ability to compete better and in turn will lead to employment.
Mister Speaker Sir,
Local businesses are at the heart of every community and we continue to believe in our ability to produce world class products and enhance the Fijian Made brand and what it stands for. This is the time to show our national pride, and demonstrate our support for the brand, including by the Opposition members.
Mister Speaker Sir,
As the Hon. Prime Minister has stated – this is ONE TIME the Opposition could have risen beyond their usual dogma and displayed patriotism and unity — for the sake of the nation, our health workers, our RFMF personnel, our frontliners and every Fijian that has sacrificed and helped our nation combat the pandemic – but to no avail.
Mister Speaker Sir,
In summary, the National Budget for the 2020-2021 Financial Year, focuses on getting tourism back on its feet by making the sector competitive, streamlining business processes, empowering MSMEs and strengthening and diversifying our economic base.
Mister Speaker Sir,
The nearly instantaneous global economic decline triggered by the pandemic has had wide-spread ramifications on every sector.
Given this economic slowdown, the pro-growth and pro-business support policies innovatively encapsulated in the 2020-2021 budget, comes at the right time. These measures will ensure that the Fijian economy not only recovers, but grows.
The bottom-line remains – by helping our businesses grow, we are helping Fijian families earn a livelihood, and securing their future and that of their children.
Mister Speaker Sir,
As one of the most labour-intensive sectors, millions of jobs across the world have been lost with the repercussions felt across all sectors of the economy. In Fiji, visitor arrivals are expected to decline by 75 percent, this year, whilst earnings, as per July 2020 forecast is expected to reduce by 70 percent.
To fully comprehend how the crisis is impacting businesses, we partnered with the IFC to conduct the COVID Business Survey.
The study revealed that if international travel doesn’t resume in the next few months, 60.5 percent of tourism businesses anticipate closure or moving away from tourism. Occupancy rates were down by 69 percent – at a time when our industry was once at its peak.
Mister Speaker Sir,
We know the impact so let’s focus on the fact that not all is lost. The tourism industry has shown resilience to adapt and recuperate from adversity. Along with the rest of the world, we now pivot to focus on preparedness and opportunities for economic stability. How we respond in moments like this is a testament of our character and more importantly, our solidarity, as Fijians, and as a nation.
Whilst the borders remain closed, we have focused our marketing on domestic tourism – through the “Love our Locals” Campaign, as a starting point. According to a recent survey of close to 40 hotels around Fiji, the average hotel occupancy rate was approximately 55 percent. These were all our own people, staying an average 2 nights.
As the Ministry responsible for tourism, our work plan has a new direction with four stages of Market Re-entry. Each stage works progressively towards rebuilding markets and calls for a different consumer message and approach.
Through Tourism Fiji, we’ve significantly realigned our marketing strategies for the coming financial year. Budget allocation for markets are being re-prioritised and re-diverted. For example, a portion of the budget for markets such as North Americas, China, and India are being redirected to Australia and New Zealand.
It goes without saying that Australia and New Zealand will play a key role in our tourism recovery and given that Fiji makes only a small percentage of their outbound markets, there is immense opportunity for growth. This can be made possible with close collaboration with the industry to position Fiji as a trusted and ‘value for money’ holidaying destination and gradually opening our borders through our comprehensive COVID Safe Economic Recovery Framework.
Mister Speaker Sir,
We’re working on our own bubble –– a “Bula Bubble”, between Fiji, New Zealand and Australia. This will allow Aussies and Kiwis, to holiday in a special “Vacation in Paradise” (VIP) Lane.
We’ve established “Pacific Pathways”, initially with Tuvalu, Kiribati and Tonga, who rely on Fiji’s national carrier for connectivity.
Safe “Blue Lanes” have also been initiated for yachts and pleasure crafts. Just two weeks ago, Fiji welcomed its first yachts from New Zealand. One yacht alone brought $40,000 into the local economy over just 2 days. Not only that, a FOREX outlet re-opened – giving a little life back into the once bustling Denarau. To date, 26 yachts have been approved to enter Fiji, and we’re looking at approximately a million dollars being injected into the country by the end of the year.
Mister Speaker Sir,
Our greatest asset is our people. They are what makes the industry what it is today and our economic resilience emanates from them. Today – Fijians in the tourism industry, and tourism-dependent sectors suffered the most. Thousands of jobs were lost and families have suffered. So, we acted decisively.
Mister Speaker Sir, in addition to the removal of STT, and cuts in ECAL, duties and departure taxes, the 150 percent tax deduction for hotels and restaurants engaging local artisans will also greatly benefit Fijians who depend on tourism.
Mister Speaker Sir,
We’ve received overwhelming responses from the industry – commending the Fijian Government on this forward-looking budget. In the words of Mr. Tony Whitton, Managing Director Rosie Travel Group and Ahura Resorts, “The leadership shown by the Government has not gone unnoticed. I am confident that together we can navigate our way through this crisis and emerge a stronger nation”.
At this point, I call upon the industry to play their part. We’ve taken the necessary steps to revive the industry. So, you need to meet us halfway. We absolutely must ensure that the benefits that come with this budget are realised. The extraordinary tax and duty concessions need to be passed down to our tourists, whilst raising the bar in terms of the service we offer. The face of tourism has permanently changed, signifying that Fiji will require a gargantuan effort by all to survive and thrive in the new normal of tourism.
Mister Speaker Sir,
MSMEs commonly face challenges such as difficulties in accessing markets and market information, availability of finance and the burden of regulatory requirements to do business. Through MSME Fiji, the $1.44 million allocated for funding programmes, will continue to support a wide range of activities, such as, creative business ideas, innovative youth and grassroot businesses to become exporters.
Mister Speaker Sir,
I would like to highlight to Hon. Bulitavu that the NDP funding under MSME Fiji has received an increased allocation of $500,000 as we understand the essential support this program provides to the businesses in the North.
In addition, the $30 million MSME Concessional Loans package will contribute towards the much-needed relief to MSMEs. MSME Fiji will work with the Fiji Institute of Accountants, Women in Business, Fiji Chamber of Commerce and Industry, Fiji Commerce and Employers Federation and Fiji Revenue and Customs Services to ensure that deserving businesses are assisted.
Mister Speaker Sir,
These programmes have created a climate where bright business ideas can easily become reality. These carefully, well-thought out programmes will have a positive impact across the supply chain through the creation of wealth, jobs and economic activity.
We will continue to handhold MSMEs through advisory, incubation, training and mentorship programmes.
Mister Speaker Sir,
We will also continue to revive, diversify and register new co-operatives with the ultimate goal of elevating them from producers to manufacturers to exporters. In line with making Fiji an investment friendly destination, we will work towards modernising the Co-operatives Act (1996) and develop a MSME Act.
Mister Speaker Sir,
We have also taken steps to alleviate the administrative burdens and reduce bureaucratic obstacles to fast track approval processes, and letting our businesses, especially our micro, small and medium enterprises, breathe in this present environment.
Through the Doing Business Taskforce – a collaborative group of Permanent Secretaries and CEOs of approval agencies, we will undertake transformational reforms to achieve the desired results for the betterment of the nation. This includes our bold target of being ranked in the top 50 countries in doing business by 2025.
This, Mister Speaker Sir, is non-negotiable and all agencies need to play ball.
Mister Speaker Sir,
Over the past few months, the Fijian Government has implemented decisive reforms in the area of starting a business. Beginning with digitalisation of the business registration process, bringing tax registration online and now with the removal of business licensing, we have made it easier for Fijians to start a business and reduce the cost of doing business.
In addition, the building permits process will be digitalised in one year. Which means that building permit application and approvals will be done online.
Mister Speaker Sir,
Moving to another critical component of the economy, the transport sector, which enables development, builds markets, facilitates trade, links people and connects local communities to the world.
Mister Speaker Sir,
In the 2020-2021 financial year, we will further enhance linkages between the maritime regions and mainland. $2.6 million is allocated for the provision of shipping services to the nine routes, namely the Upper Southern Lau, the Northern Lau, Yasayasa Moala, Lower Southern Lau, Lomaiviti, Rotuma, Kadavu, Yasawa and North-East Vanua Levu. We will also introduce a new route of Beqa-Yanuca-Vatulele.
The Ministry is also working with the Ministry of Agriculture, Ministry of Fisheries and the Ministry of Rural and Maritime Development to enhance trade (domestic and international) and boost economic activities for Fijians living in our remote rural maritime communities.
Mister Speaker Sir,
Whilst the Opposition talks about a ‘Rudderless’ Budget, I would like to give them a lesson in shipping. A Rudder is not the only device on a ship. Firstly, we need a strong ship, which is the FijiFirst Government. We need a steadfast Captain and who better than our Hon. Prime Minister. We need accurate navigational charts to steer us through turbulent waters – which is our National Budget. We also need navigational aid, such as satellites and communication devices, which are our budget strategies.
Mister Speaker Sir,
With adversity comes new opportunities. Through building our resilience as Fijians and steading our ship, we can come out stronger from the stormy waters that this crisis presents. By setting our vision and course beyond the pandemic, we will set the very foundation of navigating our nation to a better and more prosperous future.
I wholeheartedly support the 2020-2021 budget and look forward to the new financial year with a reinvigorated outlook.
Vinaka Vakalevu.