The Government wants the private sector to play a more proactive and key role in helping stimulate economic growth, says the Ministry of Finance permanent secretary Filimone Waqabaca.
“Our hope is that given the concessions in the 2012 Budget and the reduction in corporate tax rate and reduction in PAYE rate, given the increased disposable income (it) would turn not only into savings and consumption but also the businesses will invest more into the country,” Mr Waqabaca said.
Mr Waqabaca said through their assessment, if the private sector came on board and partnered with Government then the country could move strongly towards the growth targets that Government was aiming for.
As per Reserve Bank of Fiji statistics, out of the 13 per cent investment to Gross Domestic Product (GDP), Government makes up 10 per cent of the investments made in the country while the private sector only invests around 3 per cent.
Mr Waqabaca said both private sector and Government could work together to build a resilient and a sustainable economy.
To boost private sector growth, Government has been consistently investing in infrastructure through capital expenditure over the past few years.
On the infrastructure development front, Government in the 2012 Budget allocated more than $152.5m on road upgrade and repair, more than $23m to cater for energy needs, $8.5m for installation and upgrade of jetties and $86.5m to meet operational costs and as capital grant to the Water Authority of Fiji.
“Government has tried to do its best by investing in the economy and you would have seen that through the increase in capital expenditure, it is double this year with more than $525m next year. Next year we are increasing it by another 7 per cent,” Mr Waqabaca said.
“So Government has been trying to stimulate the economy through such provisions for capital expenditure, which would drive investment.”
Other major concessions by Government are the reduced corporate tax rate from 28 to 20 per cent as well as $0.5m in the “Buy Fijian Made” initiative.
This is over and above the reduced fiscal duty on equipment, machineries, vehicles and other materials to promote productivity.
“We are looking forward to what we think should be a good year, 2012, with the participation of the private sector assisting Government stimulate economic activity and build a growing economy,” Mr Waqabaca said.