Fiji is currently facing financial challenges due to rising living costs, but the government is implementing measures aimed at easing the financial strain on families. Deputy Prime Minister and Minister for Finance, Professor Biman Prasad, has introduced a comprehensive plan focused on stabilizing prices and promoting financial relief for the citizens.
In his detailed presentation, Prasad highlighted the need for reforms within the financial and tax systems designed to help everyday Fijians retain more of their earnings. A significant adjustment was the elimination of the previous three-tiered VAT system, which included rates of 0%, 9%, and 15%. The government has simplified this structure by removing the 9% rate and has broadened the list of zero-rated items, now incorporating essential medicines and other basic goods.
To further support families, the government has invested significantly in various social support initiatives. Notably, their back-to-school support program, initiated in 2023, has offered $200 to over 200,000 students annually, totaling more than $130 million in just three years. Social welfare allowances have increased between 15-25%, and the minimum wage has risen from $4 to $5 within this timeframe. Additionally, salaries for public servants have also been increased, bolstering financial support for households.
In response to rising prices of essential items, the government has reduced import duties on meat and dairy products, ensuring that local income levels remain competitive against global market rates. Professor Prasad acknowledged that despite effective policies, some prices may still see an increase due to global market dynamics. Nonetheless, the government has elevated sugarcane and rice prices while also subsidizing transportation fares, electricity, and water to help alleviate overall costs.
This proactive fiscal management has yielded encouraging results, including a notable reduction in inflation over the last seven months and unexpectedly strong revenue collection, leading to a decrease in the debt-to-GDP ratio to below 80%. The Asian Development Bank has commended the government’s transparent and accountable management of the economy during these difficult times.
Although external factors will continue to impact the cost of living, the government’s multifaceted strategy brings hope to Fijians as it works to ensure greater accessibility to basic goods, affordable healthcare, and essential services. Professor Prasad’s commitment to long-term economic sustainability presents a positive outlook for the future of Fiji.