Fiji Must Produce More

November Budget Blues

Real Wealth

Repeated warnings, during the year, that Fiji’s overseas rade balance was unfavourable—that is, that the Colony’s bill or goods and services purchased abroad was consistently in excess of earned income from all sources—was followed in November by a grim and forthright Budget.

)DRESSING the November session of the Legislative Coun cil, both the Governor (Sir aid Garvey) and the Treasurer . H. W. Davidson) informed the )le that estimated expenditure .11 Governmental services in the -8 period was £6,340,809, while nated revenues were £6,359,058 — ;h meant a surplus of only 149. As any student of Budgets vs, this easily could become a :it, on the year, running deeply six figures. )wever, there is nothing like ster in sight, at the moment, is a rich Colony, with ample rves, and excellent prospects.

Fiji would be very foolish in to ignore certain facts. It must te more wealth, by either pro ng more, or reducing costs.

The economy of this four-com munity country is based on large importations of both foodstuffs and manufactured goods. These imports are paid for by the sale overseas of sugar, copra, gold, bananas, some small commodities like metals, and tourism.

Fiji, like most Western countries, is in the grip of the inflationary spiral. The costs of goods and ser vices tend to rise more quickly than does income.

There is no immediate connection between the Colony’s overseas trad ing balance, and the Governmental Budget. But, undoubtedly, the Budget figures are affected by over seas trade. Good trading profits are almost always reflected in buoyant payments from private enterprise to Government.

The inflationary spiral thus affects the Governmental Budget directly, in its expenditure, and indirectly, because it cuts down overseas trad ing profits and makes less money available to the Government’s tax collecting agencies. (JHo beat inflation, and keep its Gov- JB. ernment finances healthy, Fiji must earn more, especially in overseas trading. But in what section of its overseas trade can it look for immediate profitable increases?

Not in sugar, nor in gold, nor in copra.

It may gain financial advantage by producing more of its own food requirements, and buying from over seas less foodstuffs, like rice and beer.

But its chief purpose should be to sell more of its products over seas. The field is limited. But the Governor has indicated three in dustries which, with encouragement, could effect greater sales abroad — metals, and bananas, and tourism.

There still is no indication of a limit on New Zealand’s appetite for bananas. All around the Colony, the F ijians are being actively encouraged to produce more and more of the country’s most excellent bananas for overseas. Fiji should never be allowed to forget the recent spectacle of a ship arriving in New Zealand with a cargo of bananas from

Ecuador —brought in because Fiji could not supply enough of the fruit.

The world is increasingly hungry for a wide range of metals —and Fiji has more kinds of precious metals than Fiji herself is aware of. Gold already has enriched Fiji, and men of good judgment hold that there still are valuable gold lodes merely awaiting discovery in those northern Viti Levu hills.

Considerable manganese already has been taken out of Viti Levu— and there is much more awaiting exploitation.

The Government has indicated, hopefully, that prospectors now are following up interesting indications of bauxite in Viti Levu, of copper in Vanua Levu, and of radioactive material somewhere else. Copper is under a bit of cloud at present; but generally the importance of these metals cannot be over estimated.

But Fiji’s best bet, in the way of increased industry, surely lies in tourism. In beauty, in novelty and in pleasing living, Fiji has as much to offer the tourist and traveller as any country in the South Pacific. The £ and the $ left in Fiji by the visitor is just as valuable as the £ and $ paid in London or San Francisco for a product of Fiji. If provided with suitable transport and hotels, the tourists will come to Fiji in an endless stream.

At present, this profitable traffic is limited by the hotel accommoda tion. Hotel building, in turn, has been limited by the high capital cost.

The latter, unchecked, requires hotel tariffs which the average traveller will not pay.

So the Fiji Government, very wisely, now has announced a series

of concessions to hotel builders which, it hopes, will take this bottle neck off the tourist industry. They are— • Crown lands will be made avail-1 able for hotel-building, at rentals, specially reduced for the first five years of occupancy;

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Materials and equipment re 3d for new hotels either will be itted to the Colony free of duty, there will be a system of /alent grants in cash; Concessions will be made in in 3 taxation, under which capital nditure may be written off ist income in the first few years le hotel’s operation, strong plea had been made to government that loans be made [able, at very low interest rates, tiotel-building. In view of the ny’s huge demands for capital all kinds of public works, that apparently was not favoured, the foregoing proposals do show 3agerness of the Government to nmething, in a practical way, timulate tourism. ivas unfortunate that the Gov srnment chose this time of :ritical examination of the ly’s finances to announce plans

for increased and drastic taxation The taxpayers were in no mood for it.

There has been an increase of about 60 per cent, in telephone tolls and rentals. Until 1956, Suva had the world’s worst manual telephone exchange. This was replaced by an automatic installation, in which calls cost Isd each. A year’s trial has shown that this new exchange, and the telephone system generally, are operating at a loss. So automatic calls have gone up to 2id each, and all non-automatic exchange charges proportionately—a heavy slug for all telephone users.

Taxpayers generally were there fore in a sour mood when the Gov

eminent proposed to rush through a new Income Tax Bill, which planned some startling new imposts. The resulting clamour induced the Gov ernment to suspend the plan for a few months. The matter is dealt with in another article in this issue. t TEAL’s lone Coral Route flying boat was unable to cope with the traffic offering on the Papeete-Suva sector in October-November, and because of this a number of in tending air passengers came south to Auckland per Monterey to obtain an air connection home. This was quicker, if more expensive, than waiting for an air seat.