|PM announces 2013 National Budget - Nov 22
Major announcements have been made in the 2013 National Budget in relation to an increase in the income tax threshold, pay increments for government wage earners, maintenance of our roads and new scholarship schemes to encourage people to get into farming.
While delivering the budget address, Commodore Voreqe Bainimarama has announced a historic increase in the infrastructure budget focusing on improving road conditions around the country.
The Fiji Roads Authority has been allocated $422 million.
This is the highest allocation ever to fix and upgrade our roads around the country.
Commodore Bainimarama said three 5 year road maintenance contracts have been signed and there are no more temporary fixes.
He said many unestablished employees of the Government’s Roads Department will move from the public to the private sector.
He is confident that those who are being made redundant will be taken by the private sector.
Four lane roads will be built between Nakasi to Nausori and from Nadi to Denarau.
30 bridges in the country will be improved next year while new bridges will also be built.
A comprehensive plan is being drawn up.
Fiji Roads Authority manager change Mike Rudge said they are focused on the task ahead with the massive amount of work to be carried out.
Rudge said people who have worked well in the Roads Department will be hired by the overseas contractors.
Rudge added they are conducting investigations on previous road projects.
The national deficit will increase next year from 1.9 percent to 2.8 percent and Commodore Bainimarama said bold steps have to be taken to overcome our greatest infrastructure problem.
For next year, $2.1 billion is set as projected revenue while $2.3 billion has been set as projected expenditure.
Expect to pay less for electricity from next year.
This is after a five cent reduction in electricity per unit across all tariff bands announced by government.
This is due to the fact that FEA is now targeting at least 90 percent of total energy requirements through renewable sources.
They have already reached 60 percent with the Nadarivatu Hydro Scheme online.
Government also based its assessment by the Commerce Commission to reduce the price of electricity.
The Income Tax Threshold has been increased from $15,600 to $16,000 for next year which means that anyone earning $16,000 or less will not pay income tax from 2013.
Looking at duties and taxes:
For those who smoke or drink alcohol, get ready to dig deeper in your pockets as a massive 10 percent increase in fiscal duty has been announced for cigarettes and alcohol.
A Green Tax has been introduced.
The increase in fiscal duty on motor spirits has been increased from 44 cents a litre to 46 cents a litre.
For automotive and industrial diesel oil, the duty will increase from 18 cents to 20 cents a litre.
The Green Tax will not apply on white benzene, kerosene, premix and for inter island vessels.
A rebate of 2 cents per litre for the bus and fishing industries will also be in place.
There is good news as duty on smart phones has been reduced from 5 percent to 0 percent while import excise duty on vegetables will be reduced from 10 percent to 0 percent in line with the zero duty of fruit.
The Prime Minister has also announced that persons receiving rental money on behalf of homestay owners are accountable to pay FRCA the 5 percent Service Turnover Tax every month.
Commodore Bainimarama has also announced a 10 percent pay increase for unestablished government wage earners.
Other changes have also been announced where all established staff (civil servants) earning below $10,000 will be put up to $10,000 while a bonus system will also be introduced from 2013.
The Prime Minister stressed that civil servants need to be better servants of the people.
A major initiative to encourage school leavers to become farmers has been announced.
A scholarship program in conjunction with the Fiji National University will start next year where 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 cost 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.
Commodore Bainimarama said 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.
$5 million has been allocated for a new scholarship program to cover tuition fees for more than 1,000 students to undertake vocational courses, through the Fiji National University, to help them acquire specialised trade skills.
This is to enable them to become certified plumbers, electricians, deckhands, carpenters, mechanics and engineers.
In addition, to support FNU’s vocational training for those living in rural and maritime communities, $1.8 million has been allocated.
The Ministry of Education has been given $268 million for 2013 which is up by $12 million.
Good news as the free text book and bus fare assistance schemes will continue next year.
Tuition fee assistance for primary and secondary schools will continue.
$1.2 million allocated for vocational training/programmes in 124 schools.
Generous tax concessions will also be given to people who donate computers valued at more than $10,000 to schools.
Commodore Bainimarama said the health system is not as good given years of neglect.
$167 million has been allocated to the Health Ministry for 2013.
$900,000 has been given for in-service training for medical personnel, the community health worker scheme will be relaunched, $4 million has been set aside for major upgrades to health centres around the country while major works will be carried out at the Sigatoka Hospital (this will also be funded by the hotels in the Coral Coast area).
On to constitution and elections preparations:
$1 million has been allocated for the Constituent Assembly while $11 million has been given to the Elections Office for preparations for the 2014 elections.
$1 million has also been allocated to refurbish the parliament complex for the first parliamentary sitting in 2014.
The Fiji Police Force has been allocated $92 million for next year which is an increase of $8 million to ensure that the force fights crime effectively.
The government will also strengthen the Prisons system.
100 new prisons officers will be appointed and new CCTV cameras will be installed in all prisons around the country.
$21 million has been allocated to the Fiji Corrections Services.
$2 million has been allocated to the Legal Aid Commission.
$4.5 million has been set aside for the extension of the Lautoka High Court while the Ba Magistrates Court is to be relocated to higher ground.
$110 million to improve and expand the services of the Water Authority of Fiji.
$250,000 has been set aside for water testing equipment to ensure people have safe drinking water.
In an effort to stimulate economic development, the region between Korovou to Tavua will be declared a tax free region 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 and encourage more local milk production.
Foreign companies that establishe or relocate their headquarters to Fiji will be subject to a low corporate tax rate of 17%.
Companies that list or are listed on the South Pacific Stock Exchange will now pay a reduced corporate tax rate of 18.5% as opposed to the normal corporate tax rate of 20 percent.
The existing tax deductions and incentives for listing will continue.
On to reactions:
Consumer Council CEO Premila Kumar said the people in the lower income bracket have been rewarded in the 2013 budget.
The new initiative under the Poverty Benefit Scheme will cover the whole family and not the individual alone.
Social Welfare Minister Dr Jiko Luveni said this is a privilege.
13,000 households will be receiving a maximum assistance of $150 per month including $30 worth of food voucher from next year.
The coverage of the poor population will increase from 3 percent to 10 percent going into next year for which a budget of $22.7 miilion has been set.
In addition to this, $5.9 million has been allocated to the ministry for care and protection programmes for children.
A new initiative which will start from next year will see elderlys over 70 years of age having no source of income receiving pension from government for which $3.2 million has been allocated.
Flour Mills of Fiji and Fiji Manufactures Association chairman Hari Punja said this is a well planned budget.
The Fiji Labour Party said it is an irresponsible budget.
Leader Mahendra Chaudhry said this will drive the nation into a deeper debt trap for which our future generations will suffer.
He added that the budget projects a deficit of 2.8%, up from 1.9% and the promises made will undoubtedly have to be met from borrowed funds.
Chaudhry stressed that Fiji’s debt situation is already critical and the nation cannot continue to survive on borrowed funds.
Commodore Bainimarama has announced that the Fiji National Provident Fund will complete the Momi Resort project from next year.
FNPF will put an extra $150 million of investment in the Momi Resort for it to be sold.
FNPF CEO Aisake Taito said the reconstruction of Momi Resort will start early next year.
$4.2 million has been allocated to the Fiji Sports Council to assist with the upgrade of the National Stadium to international standards and this will enhance Fiji’s ability to bid for and host regional and international sporting events.
A new allocation of $1 million has been given to set up a National Sports Commission to coordinate sporting development throughout the country.
New sporting facilities in rural communities will be set up and the government has invested $2.7 million through the assistance of the Chinese government.
The government has also committed $490,000 for various sporting activities such as outreach programs, sporting tours, hosting of international tournaments and sports scholarship.
An extra $200,000 has been provided to develop sports grounds in rural communities.
With respect to facilities for youth, government has allocated $220,000 to upgrade the Naleba, Naqere and Sigatoka Youth Training Centers.
Story by: Vijay Narayan
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