Inflation statistics are released by the Fiji Bureau of Statistics, and it is a fact that inflation was negative in April. A negative inflation rate means that overall prices have declined compared to a year ago—there is no debate about this. The Government had welcomed this decline, which was supported by falling global fuel and food prices. Earlier Government policy measures—such as zero-rated VAT on 22 essential items, increases in social welfare, $650 million in TELS debt write off, the national minimum wage rising to $5 an hour, and an $85 million increase in public sector wages, among others—have been supporting thousands of Fijian families.
Hon. Alvick Maharaj’s claim that the Government has misused the additional VAT revenues is absurd. It is precisely through this additional funding that we have been able to finance various income-support measures for our people and increase allocations to health, water, roads, public asset maintenance, agriculture, and other critical sectors. It was during his Government’s tenure that public finances were abused to feed cronies and political party supporters. The pilfering of hard-earned taxpayer money under their watch deprived our people of essential services and left us with the disaster of a dilapidated health sector, unreliable water services, and crumbling public infrastructure.
I would also like to remind him that during their time in government, VAT was already set at 15 percent. We had three VAT rates: zero, 9 percent, and 15 percent. What we have done is move items that were at 9 percent to 15 percent. Items already at 15 percent remain unchanged, and those at zero percent continue to be zero-rated—with the additional inclusion of prescribed medicines, bringing the total to 22 essential items.
In addition to funding these critical expenditure initiatives, the revenue measures have helped reduce our debt level from over 90 percent to around 78 percent of GDP. This significant reduction in debt has enabled us to rebuild fiscal space to mitigate major external shocks and fiscal disruptions.
His calculation that VAT would be $75 on a $500 grocery basket is amateurish and a lie. There are 22 zero-rated items, and if the entire basket consists of these items, the VAT would be zero. If half of the basket is zero-rated, the VAT would be $37.50. At the same time, vulnerable households continue to receive various forms of assistance and social wages funded through the public purse.
Sayed-Khaiyum’s claim that prices have increased over the last two years doesn’t take away his disastrous record during his tenure as Finance Minister from 2014 to 2022, when overall prices increased by over 17 percent, and food prices rose by a staggering 30 percent. It was his policies and dictatorial leadership that ruined this nation—driving up public debt, crippling public infrastructure, hollowing out state institutions, damaging the economy, and leaving a nation that lived in fear.
Unfortunately people like Hon Maharaj and Aiyaz continue to lie thinking that it will improve their political fortunes. People who bankrupted their own political party and ran away from parliament should not lecture others about how to manage the country’s economic policies.
The Coalition Government has been honest, transparent and open about its economic policies. This has created confidence and this is reflected in increased investment over the last two years.
Deputy PM and Minister for Finance
Professor Biman Prasad
8 May 2025