Fiji people but ...

Dark days ahead for Fiji people but ...

From SUE WENDT in Suva

“Do without . . . exercise restraint , . . grow more food . . .” are three of the basic messages in Fiji’s tough but to-be-expected 1975 Budget, introduced by Minister of Finance Mr Charles Stinson, on Novem ber 15.

While it did not increase income or company tax, the sl32i million Budget introduced measures the government hopes will curb inflation, presently running at between 18-20 oer cent, by cutting down Fiji’s im oort bill.

Petrol rose by 3c a gallon, spirits >y 20c a bottle, wines 10c a bottle, agarettes by more than 1c a packet )f 10, sugar by 1c a lb, beer by 2c i 26 oz bottle. Imported foods will ilso increase in price with some terns facing substantially-increased iscal duty.

The Carpenter Group subsequently varned that it might have to with- Iraw from food distribution because »f rising costs. The Budget would ncrease business operating costs, said he management. Some of the group’s iperations, such as food distribution, /ere now only marginal and more ost increases might lead to a with rawal.

Dozens of different kinds of im orted foods previously admitted ree of duty look like disappearing rom supermarket shelves, because f tax totalling 15 per cent (10 per ent fiscal duty and five per cent ustoms duty). A five per cent fiscal uty also goes on imported meat, egetables, breakfast foods, milk nd fresh fruit.

Fiscal duty on poultry and pet 3od increases from 25 to 30 per ent. These are just a few of the eavy increases in imported food nes.

Mr Stinson said it was hoped that jch measures would persuade Fiji eople to produce more at home, he government would place greater mphasis on agricultural develop lent and rural training schemes.

The long list of fiscal duty in cases included almost all house old appliances (washing machines om 20 per cent to 60 per cent, ater heaters from 35 to 60 per mt), and such items as laundry >aps and detergents (from 7i per :nt to 25 per cent) clothing, latenals and office equipment—and

even Christmas decorations (from 25 per cent to 50 per cent).

Budget highlights are: • Overseas borrowing to increase next year to cushion the country’s reserves and to finance its increased capital programme. • Exchange control to continue to avoid additional pressures on over seas reserves. • Severe cutbacks on lending for the financing of luxury goods for local consumption or speculation on inventories or real estate. • Capital inflow to be en couraged, but the gearing rates of three to one to be maintained with a degree of flexibility. • Direct control of imported goods which use a lot of electricity or fuel to continue. • Rapid expansion of cane pro duction by opening up new areas to get very high priority.

Mr Stinson warned that Fiji could run down its overseas reserves by a further $27 million next year unless government introduced appropriate

measures or borrowed heavily.

Commenting on the growing bur den of civil service pay, Mr Stinson said that similar increases repeated next year would be “enough to sink any sailing ship”. He estimated that civil service pay would soar to $40,620,000 next year from $26,400,000 this year. But the num ber of people employed would

hardly change.

Civil service pay would account for 38.9 per cent of the government’s operating costs next year, compared with 35.9 per cent this year.

funds with Si.Bs million followel by Health with $1.59 million.

As in the past the highest depan mental receipts are expected fronj the Customs Department but thd Inland Revenue Department is inj creasing its revenue at a most satis factory rate.

“In the interests of overall ecod omic stability, it is essential that th( government budget for 1975 be non inflationary; therefore, only a modes deficit of $52,970 has been budgetel for”, said Saili.

Thus, the picture that Saili give| to the 1975 Budget is one of safety and security: increased revenue, de creased government spending, a mo dest deficit.

Added to this is Western Samoa] healthy foreign exchange situatioi which at the time of the Budge stood at approximately $4.5 million The minister considers that $4 mil lion is the minimum safety figure.

On the negative side, with all o Saili’s apparent good intentions, then seems to be a glaring deficiency, am this in Saili’s approach to industrial isation, the importance of which ha been ignored for two years.

Though Saili’s attempt at indus trialisation needs the country’s sym pathy (because the drastic drop h agricultural exports and the sever control over allocations during th last two years point to the need fo industrialisation) how the country j to be industrialised remains a ke problem.

Saili, prefers the idea of an Indus trial Free Zone. He was convince of this because of intensive stud and observation, he said. Other however, prefer the present system protection for local industries, th necessity for overseas investmen and granting of incentives as the exist now.

But the critical question still n mains—though the government planning for the future, what is doing about industrialisation now?

In fact the Budget talked vei little about any new industries major importance, a sign that the was very little to talk about!

It mentioned a brewery, a joi venture by the Samoan Governme and a West German firm but ev( this is for the future, next year, the earliest.

But, to end on a bright noi exports this year were greatly bett than last year. Agricultural expoi for the nine months to Septemb 30, 1974, totalled a record $5.1 mi ion, compared with $2.3 million f the same period last year. Saili a mits though that this improveme was mainly due to increased ov< seas prices rather than volume.