Serious Threats Of Inflation Take

The Glitter Off Fiji's Christmas

From SUE WENDT, in Suva

Fiji s festive season lost some of its glitter when the committee ap pointed by the government to con sider inflation released its findings on December 14.

While listing 30 recommendations designed to alleviate inflationary pressures, the committee—consisting of government, commerce, employer and trade union representatives—drew a gloomy, overall picture.

It warned of serious danger to the viability of Fiji’s major export in dustries and described a disturbing general atmosphere of accelerating wage demands, widening margins in the economy’s distributive section, and increasing land prices.

The seasonal spirit of goodwill showed signs of strain too during the budget debate in the House of Representatives in December.

Harsh words flew back and forth on several occasions as the Opposi tion dutifully launched its attack on the government’s handling of the economy. The debate was inter rupted at one stage when accusations of “intrigue” from the Opposition benches brought angry denials from Minister of Communications, Works and Tourism, Mr. Charles Stinson.

The row ended with a warning for Mr. Stinson from the Deputy Speaker Mr. R. D. Patel, a govern ment declaration of support for the same minister and indignant protests by the Opposition as the House was adjourned until the next morning.

The disturbance arose after Mr.

Stinson complained about what he called a five-year campaign by some Opposition members to depict him as a dishonest man.

Speaking about tourist resort pro jects, Mr. Stinson had again ex pressed his displeasure over a photo graph of himself (appearing) with out his permission in an advertise ment by a development company.

Opposition interjections included a demand for an official inquiry.

Mr. Stinson retorted that some Opposition members had gone out of their way to involve him in in trigue.

“I can say honestly they can go for the next five years and they won’t find anything against me be cause I am an honest man,” he said.

Elsewhere during the budget debate, Minister for Fijian Affairs and Local Government Ratu George Cakobau criticised the Opposition for making remarks which suggested ministers were “drones living on the public purse”.

Such remarks were most objec tionable, said Ratu George, and were contrary to what the government had been trying to do in promoting integration and a spirit of co-oper ation between the races in Fiji.

The cost of the government mini sterial system had been attacked earlier in the House by Opposition member Mr. Ujagar Singh.

“It appears to me the time will come when every member for the Alliance caucus will become a mini ster or assistant minister,” Mr. Singh declared. There were 11 ministers, five assistant ministers and provision for another three assistant ministers —a total of 19. This meant that for every 26,000 people in Fiji there would be one minister or assistant minister.

Lip service had been paid to equi table distribution of opportunity and narrowing the income gap between urban and rural populations, said

Mr. Singh who advised that the real solution was to do away with “back scratchings” and the habit of “pleasing the caucus members by these exag gerated emoluments”.

Mr. Singh said the Opposition had gone in detail into a proposal for a tourist industry tax—if 150.000 tourists were charged $3 landing tax, government revenue would increase by about $500,000.

“This money would go a long way to overcoming the government’s in ability, or unwillingness, to find enough funds for free education, in creases in family assistance to des titutes and the provision of subsidies to farmers and people wanting to start small businesses,” said Mr.

Singh.

Tourism came in for its share of criticism with Alliance backbencher Mr. R. H. Yarrow warning that it could become a “many-headed mon ster” and Opposition members in sisting that the people at large were not getting a fair share of the pro ceeds.

Opening the Opposition’s “case” against the budget, Leader Mr. S.

M. Koya accused the government of failing to put forward any positive proposals to combat inflation.

He called for the establishment of a central bank and criticised the operations of the trading banks, (whose lending policies discriminated against the ordinary people, he said) and the Fiji Development Bank.

No trading bank in Fiji was locally owned. “I firmly believe that in the interests of the country we will have to set up our own trading bank very soon,” he said. “If other govern ments can come on to our soil and exploit our financial resources for profit, so can we. We have failed miserably in this.”

He pointed a finger at the busi ness people—they had a right to make a profit, but they should also have a social conscience. If big bus iness continued to send large profits overseas and did not do enough to help the economy and the workers, proper legislative action would have to come.

He criticised the function of the Fiji Development Bank and said farmers had complained that they

Mr. S. M. Koya . . . attacked the govern ment over the economy.

could not obtain loans from this source.

Mr. Koya’s sentiments in relation to the FDB were echoed in the in flation committee’s report, which called for a “more imaginative ap proach in its lending to farmers and fishermen”. The 30 recommenda tions included the continuation of selective price control, as part of an overall policy on incomes and prices. The report recommended that all dividends exceeding a reasonable return should be treated as income for tax purposes. Otherwise, the pres ent five per cent, tax should remain as an incentive to local investment.

Also recommended were: • In creased taxation on a range of luxury goods; • The setting of guidelines by the government for the overall restraint of credit and, • The intro duction of legislation governing the terms and conditions of credit sales.

Lending for home construction should be restrained, except finance for non-luxury, owner-occupied housing and for the Housing Autho rity.

Restraint in the growth of the public service was recommended, and the report said there was a con tinuing need to watch closely the growth of recurrent expenditure. A critical review of government pro cedures and practices should be in itiated.

The committee urged crash courses to teach skills in the building industry, and shades of localisation—recom mended that Fiji’s immigration au thorities be instructed to consider favourably applications for recruit ment of overseas supervisory and skilled personnel for the construction industry.

On land transactions, the com mittee said the government should prohibit transfer of titles to over seas buyers— except for approved de velopment purposes.

The report observed that consumer prices in Fij had risen at rates roughly comparable with those in Australia and New Zealand. Among several ‘undesirable consequences” of this trend was a rise in export prices relative to import prices—thus re ducing Fiji’s exports and causing a deterioration in the balance of pay ments. Inflation of this type could seriously endanger the viability of Fiji s major export industries. . Jhe general overall picture of rising costs and prices was creating a widespread expectation that price rises would continue—“a state of psychology that is dangerous,” the report said. Such an expectation would cast doubt on the government’s ability to achieve its Development Plan Six targets.