Cabinet at its meeting on June 1 endorsed Government’s efforts to safeguard and strengthen its financial position in light of the revised economic indicators, revenue performance, liquidity situation and devaluation of the Fiji dollar. The aim to sustain a healthy financial position during these trying times and to stay on track with the 2009 Budget Strategy.
Prime Minister and Minister of Finance, Commodore Voreqe Bainimarama, said Governments effort to curb non-essential spending and tighter finance control measures were working well across Government.
With a half year results showing positive signs and a small surplus recorded however, he said more effort has to go into implementing the planned capital works and repairs and maintenance programmes.
PM Bainimarama added that he expects the rate of implementation to rise in the third and fourth quarter as agencies award tenders for the various major works in the Infrastructure sectors.
As mentioned previously, it is also envisaged that economic activity will pick up with implementation of second half of the capital works and with other sectors of the economy such as tourism to improve due to devaluation of the Fiji dollar.
The Prime Minister and Minister of Finance explained that, Government will continue to adopt a prudent approach to its fiscal policy, through respective strategies, to cushion the impact of global economic contraction and devaluation on government finances.
The strategies are geared to impose tighter controls on, and intensify monitoring of operating expenditure by the agencies on a monthly basis according to revenue receipts.
This will in turn allow government the flexibility to meet productive capital expenditures and obligatory payments.
The focus will be for Government to direct its larger share of deficit to finance areas that foster growth such as infrastructure, agriculture and tourism while minimizing unproductive expenditure.
The Government in close conjunction with the Reserve Bank of Fiji will continue to align monetary and fiscal policy direction.
The result of this alignment policy are starting to show and the country continues on a trajectory to attain a resilient economy, foster growth in private enterprises and to alleviate poverty.
PM Bainimarama said early results from month ending July 2009 shows that Government continues to run a small surplus even after lifting the VAT refund threshold by an additional $10m per month.
Government remains confident that with such prudent measures and the support of the people of Fiji and the resilience they demonstrate, its finances will be kept at sustainable levels.