Number of significant announcements made in the 2016/2017 National Budget

A number of significant announcements have been made in the 2016/2017 National Budget in order to rebuild and recover after Cyclone Winston, increase salaries for doctors, Police constables and Early Childhood teachers, and more support for the youth, people living with disabilities and disadvantaged groups in the country.

Looking at Taxes:

All new hybrid vehicles will continue to enjoy duty free status for the next two years while duty will be charged for second hand hybrid vehicles from next year.

From January 1st next year, second hand hybrid vehicles will attract duties between $2,000 to $6,500.

Finance Minister Aiyaz Sayed-Khaiyum said FRCA will also publicize details of vehicle prices when they are landed in Fiji and the prices set by individual car dealers.

He has raised this issue as vehicles brought in for $8,000 are being sold at $22,000.

Duty on second hand vehicles has now increased. 1,000 to 1,500cc vehicles will attract a $7,500 specific duty while 1,500 to 2,500cc second hand vehicles will attract a specific duty of $11,500. Duties will increase further to $18,000 and $23,000 for second hand vehicles with bigger engines. 

A 7 year tax holiday has been offered for those that invest in setting up of Electrical Vehicle Charging Stations.

The grant subsidy is up to a maximum of 5 percent of the total capital outlay incurred in the development of Electrical Vehicle Charging Stations with capital expenditure of not less than $3 million and 7 percent of the capital outlay with capital expenditure of not less than $10 million.

Cigarettes, tobacco and alcohol will attract an increased tax of 15 percent. This rate of increase will continue for the next 3 years.

Excise tax for sugar sweetened drinks has also been increased by 20 cents per litre.

Machines linked to supermarket cash registers will be deployed this year to ensure that there is tax compliance.

The Water Resource Tax has also gone up. It will go up from 0.11 cents to 1 cent per litre for extraction of up to 3.49 million litres of water per month and increase from 15 cents to 18 cents per litre for extraction of 3.5 million litres of water and above per month.

A series of disposals of principal place of residence will now be subject to Capital Gains Tax.

Service Turnover Tax and Environmental Levy will also be charged on bus companies that engage in the carriage of tourists.

VAT will now be applicable on business of dealing in residential accommodation rentals exceeding a threshold of $100,000 a year.

For Employers:

There is no change to the corporate tax rate.

The tax deduction on wages paid on first full-time employees will continue with an increased rate of 200 percent, effective from August 1st 2016.

Sayed-Khaiyum has also announced a 200 percent tax deduction on apprenticeship in the related area of study of up to 6 months in a year before graduation for students, as part of course requirements.

A 200 percent tax deduction on wages paid to students employed in the related area of study for up to 3 months in a year during the holidays and a 300 percent tax deduction on wages paid in the employment of people living with disabilities who will be employed continuously for a period of 3 years.

There will be a 150 percent tax deduction of employees’ education fees who are allowed to study and attend training to obtain a professional qualification during their course of employment.

All these tax deductions will expire in 2020 except the incentive to hire disabled people, which will expire in 2022.

Credit Card Levy: 

The Credit Card Levy of 3 percent will be removed from 1st August this year.

Salaries:

Good news for doctors employed by the government.

The government is giving a healthy pay rise to attract and retain talented doctors.

Sayed-Khaiyum said the increased salary ranges from 56% to 81% depending on their specialized area of practice which should give everyone an idea of just how under paid they were.

The government will also pay for their post graduate studies at FNU.

An allocation of $40.7 million has been set aside to meet the salaries of the doctors.

Meanwhile, a $250,000 has been set aside to set up an Open and Transparent Complaints System and create a mechanism for any Fijian to seek resolution of complaints by the treatment by any Medical or Health Institution.

The Finance Minister has also announced that a benchmark compensation survey has been completed where more than 140 civil service positions were reviewed.

The survey collected salary data of positions in the private sector, international and regional organizations to assess appropriate salary levels for competitive positions in the civil service.

A final report of the study is expected later this year and the implementation is planned for pilot ministries from September this year.

Sayed-Khaiyum said some pay increases have already been confirmed with several ministries after the necessary reviews were conducted.

He said a survey report in September would establish their next step.

Good news for Police constables as their salaries will increase by 20 percent.

The Police budget has been increased by $5.5 million to $131.7 million.

Aiyaz Sayed-Khaiyum said the government has spent $88 million on the Help for Homes Initiative so far to assist people living in cyclone affected areas.

Another $20 million will be allocated in the 2016/2017 National Budget for this initiative.

$207 million has been allocated for Winston rehabilitation efforts.

$142.6 million has been allocated to rebuild education facilities while 38 schools have been confirmed for the Adopt the School Program.

Sayed-Khaiyum said the insurance companies also need to do more. 

He said public consultations will be held soon on insurance services and those who are under-serviced at the moment.

$527 million has been allocated for the Fiji Roads Authority in the 2016/2017 National Budget.

Rural roads have been allocated $95 million while $4.5 million has been allocated for high priority bridges.

It has also been announced that $200,000 has been allocated for preliminary works for the development of a new airport in Seaqaqa.

$308.6 million has been allocated to the Water Authority of Fiji - $229.4 million of this has been allocated for capital works.

There will be increased salaries for Early Childhood teachers in the 2016/2017 National Budget.

The grants for Early Childhood Schools have also been increased by 33 percent.

30 more scholarships will be available under the National Toppers Scheme in the 2016/2017 National Budget.

The Fiji National University will also begin construction of its new campus in Labasa.

FNU will also begin to offer graduate medical programs from next year. This will increase the pool of doctors in the country.

Good news as $1 million has been allocated to build a world class pilot training academy in Nadi.

Sayed-Khaiyum said Fiji Airways is working with Airbus and Boeing to set up this academy which includes world class pilot simulators.

The Fiji National University may be involved in this training academy.

Decentralised Government Services: 

New Births, Deaths and Marriages (BDM) offices will be established and existing offices will be refurbished and upgraded with special equipment in offices throughout the country.

4 new BDM offices will be opened in Nabouwalu, Navua, Korovou and Sigatoka.

Legal Aid Services will receive a funding of $5 million.

New Legal Aid offices will also open in Rotuma, Taveuni, Levuka, Nabouwalu and Kadavu making a total of 18 Legal Aid Commission offices in Fiji.

Health: 

$13.4 million has been allocated to complete construction of the new Ba Hospital, $4.1 million has been allocated to help complete the new Naulu Health Centre, $2 million has been set aside to upgrade the Rotuma Health Centre, $3 million has been allocated to extend the CWM Maternity Unit and $2.3 million has been set aside to help complete the Low Risk Maternity Unit In Makoi.

It has also been announced that $6.3 million has been allocated to upgrade the Keyasi Health Centre to a Sub-Divisional Hospital.

$7.5 million has been allocated to RFMF to get specialized vehicles.

This is to assist in recovery efforts after natural disasters.

New vacuum street cleaners will be introduced in some areas including Suva from next year.

A National Micro Small Enterprise Council will be set up. This will be chaired by the Prime Minister. The council will provide funding, training, collect data, support and evaluate data.

The Tourism budget allocation has been increased from $32 million to $36 million.

The Departure Tax has been eliminated for those visitors who stay in Fiji for less than 72 hours.

It has been announced that a new bill will be presented in parliament to have new retail hours. Sayed-Khaiyum said there will also be protection for shop assistants and repealing the archaic law is necessary.

The government will relax the requirement for car park spaces for new buildings.

The government will pay for the vocational teachers teaching at the centres for the people living with disabilities and a new regulation will be put in place for the first two seats in buses to be reserved for people living with disabilities.

Sugar and Agriculture:

Government will continue with the fertilizer subsidy with an allocation of $9.7 million while $3 million will be provided for the upgrade of cane access roads.

The government has also increased the allocation of the Sugarcane Development Farm Assistance program to $11 million.

An allocation of $17.1 million has been provided to support rehabilitation efforts for non-sugar sectors as part of the Ministry of Agriculture allocation of $74 million.

These funds will be used to repair and rebuild damaged agricultural offices and quarters, to replant 500,000 coconut trees, to develop dalo and yaqona and rehabilitate crops in the severely affected areas in the Northern, Eastern and Central Divisions.

The government has received direct budgetary support of $23 million from the European Union for rehabilitation of the entire agriculture sector including sugarcane cultivation and processing.

FICAC has been allocated $8.5 million.

Budget:

The 2016/2017 National Budget projects $3.64 billion expenditure and $3.18 billion revenue.

Sayed-Khaiyum said 40 percent of the amount of money allocated in the National Budget goes to capital expenditure and 60 percent to operating expenditure. He said in 2005, the allocation was 85 percent for operating expenditure and 15 percent for capital expenditure.

The Finance Minister said the government will redouble its efforts in the National Budget to rebuild and recover after Cyclone Winston on February 20th this year.

From next year, the ministries will present 3 year and 5 year plans.

Economic growth for Fiji is expected to be 3 percent for this year despite Tropical Cyclone Winston and the government said that they have a sound recovery plan after Winston.

This will also see nine consecutive years of economic growth for Fiji for the first time.

Inflation is expected to remain at 2 to 3 percent.

It has also been announced that FNPF is expected to credit members 6.25 percent interest despite paying out the Cyclone Assistance funds.

The Ministry of Finance will also change its name to Ministry of Economy from 1st August.

Sports:

A great incentive has been offered to our Olympians as cash rewards of $30,000 has been allocated for any Olympian who brings home a medal after the Rio Olympics.

The government has set aside $500,000 for this.

This will be another boost for the Vodafone Fiji 7s team as they aim to win Fiji’s first ever gold medal.

Meanwhile, the government is also bidding for Fiji to host the World Weightlifting Championship 2018.

In Golf, the Fiji International Golf Tournament will be held in Fiji again next year.