Fijians are grappling with the financial strain caused by rising costs, but the government is actively taking steps to alleviate this burden. Deputy Prime Minister and Minister for Finance, Professor Biman Prasad, unveiled the government’s comprehensive plan aimed at stabilizing prices and easing the financial pressures faced by families.
In his outline of the government’s approach, Prasad emphasized the importance of reforms to the financial and tax systems that aim to keep more money in the hands of everyday Fijians. Notably, the previous system included three VAT rates of 0%, 9%, and 15%, which led to revenue inefficiencies. The government has since simplified this structure by eliminating the 9% rate and expanding the list of zero-rated items, now including essential medicines among other goods.
The government has made significant investments in social support initiatives, such as the back-to-school support program, which has provided $200 to over 200,000 students annually since 2023, amounting to more than $130 million over three years. Additionally, social welfare allowances have seen a rise of 15-25%, and the minimum wage has increased from $4 in 2023 to $5 this year. Civil service salaries have also been raised, further contributing to the support for families.
To combat rising prices of essential goods, the government has reduced import duties on items such as meat and dairy products while ensuring that local income levels can compete with global prices. Professor Prasad acknowledged that even with effective policies, some prices may still rise due to international market fluctuations. However, the government has increased sugarcane and rice prices and provided subsidies for bus fares, electricity, and water to help manage these costs.
Positive results have emerged from this proactive fiscal management, including a significant reduction in inflation over the past seven months and stronger-than-expected revenue collection, which has led to a debt-to-GDP ratio drop below 80%. Notably, the Asian Development Bank has lauded the government’s transparent and accountable economic management during these challenging times.
While recognizing that external factors continue to influence living costs, the government’s multifaceted approach offers optimism for Fijians as it strives to improve accessibility not only to basic goods but also to affordable healthcare and essential services. Professor Prasad’s assurance that the government will continue to focus on long-term economic sustainability heralds a hopeful outlook for the country’s future.