30 Jun 2018

Fiji budget a 'look good' one says economist

11:18 am on 30 June 2018

The Fiji budget contains "look good" policies which won't address people's concerns about the cost of living, an economist in Fiji says.

Suva, the capital of Fiji

Suva, the capital of Fiji Photo: 123RF

Grants for newborns and first time house buyers as well as increases in parental leave are among some of the new initiatives in the national revenue raising and spending plan announced on Thursday night.

There's also insurance for Fiji's 100,000 civil servants, free bus fares for the elderly, subsidised treatment for diabetics and removal of the five percent tax on imported fruit and vegetables.

The $FJ1000 parenthood assistance grant and up to $15,000 for house-buying assistance were only one-offs for certain sectors, according to Neelesh Gounder an economist at the University of the South Pacific in Suva.

"They're "look good" policies but they'll certainly not be able to address the bigger challenges related to cost of living," he said.

Sugar cane trucks in Fiji's western division.

Sugar cane trucks in Fiji's western division. Photo: RNZ / Alex Perrottet

The government also announced relief for sugar cane growers with a stabilisation fund of $85 a tonne.

The industry supports about a fifth of Fiji's population and has been hard hit in recent years by cyclones and rising costs.

"While it's in a good direction, my estimate is it will need somewhere around $95 to $105 to provide an incentive for farmers to keep farming," Dr Gounder said.

Just over a fifth of the $FJ4.6 billion budget is towards education.

Children at Daku Village School, Fiji

Children at Daku Village School, Fiji Photo: RNZI/Sally Round

Dr Gounder said that was well-deserved but the government would have to ensure the spending was also high quality.

"There is some allocation for curriculum review and I hope the focus on curriculum review is improving teaching standards and so on."

He suggested unattained asset sales were to blame for a constrained election year budget.

"I guess they are realising that, so that's why probably the growth in expenditure relative to revenue has slowed down compared to the 2014 financial year," he said.

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