#header-inner img {margin: 0 auto !important; #header-inner {text-align: Center ;} Fiji Coupfourpointfive: FLP rubbishes mini budget

Sunday, July 4, 2010

FLP rubbishes mini budget

The Fiji Labour Party says the interim government's budget was put together by inexeprienced advisers - and that Frank Bainimarama is surrounded by empty-headed economists and financial advisers.

On its website, the FLP says:

On 15 June we had warned that a mini budget was likely in July because of the precarious state of government finances.

The administration has now announced that the Finance Minister will deliver a revised budget tomorrow (2 July).

Why a revised budget? The people want to know whatever has happened to the optimism expressed with so much confidence in the 2010 Budget address last November.

The simple truth is that the 2010 Budget was a product of miscalculation at its best. Managing state finances is not an easy job. Regrettably, the Prime Minister, who also holds the Finance Portfolio, relies for advice on people who keep him ill-informed.

The 2010 Budget was the handiwork of inexperienced advisers who, in turn, were guided by certain academics who profess to be seasoned economists but have really never managed anything beyond a university lecture room.

Surely, the claim by the Finance Ministry that national disasters (Mick & Tomas) resulted in around $30 million of unforeseen expenditure, thus necessitating a revised budget, cannot be taken seriously. We have had worst disasters in the past - costing much more in rehabilitation and reconstruction work than the $30 million claimed – but never was a revised budget brought in by the past governments.

Moreover, the so-called $30 million cannot be verified as details of State finances are no longer in the public domain. The regime has stopped publication/release of information on State finances.

We had warned in our 15 June story that VAT would likely go up from 12.5% - 15% with hikes in Customs Duty and fees and charges being a real possibility to rake in badly needed cash.

Reliable sources within the Finance Ministry have expressed concern that the State is borrowing heavily from the FNPF to meet its day to day operating expenditure and the situation has deteriorated to the level that prevailed under the Qarase administration.

FNFP sources reveal the following in terms of government borrowings under the Fiji Development Loan category:

Year No of Loans Total Borrowing

2006 35 $348m

2007 9 $ 95m

2008 15 $342m

2009 31 $436m

The loans above are in addition to short-terms borrowings by the State. As can be seen, there was a significant rise in borrowings in 2009.

Fears have been expressed even by the International Monetary Fund (IMF) about the state’s ability to pay back its loans on time. FNPF is exposed to this risk as a good proportion of its loans are merely roll-over of previous loans. For how long will this cycle of borrow-more-to-pay-old debts continue is anybody’s guess!


Anonymous said...

Thank you for the figures on loans taken from FNPF. No wonder we are after IMF and the Arabs/Chinese/Malasians, etc. for loans, to borrow from Peter to pay Paul.

Where are we heading? It seems that the government owes so much to the people through the FNPF and the people running the government owe a lot to the people through the former NBF.

We the people of Fiji deserve better governments and better people to run governments for us.

Joe said...

Look in your own backyard FLP. Where is the $2M your leader stole from the poor displaced farmers? I bet it is growing in a foreign bank acc.

Anonymous said...

What a truely amazing situation a certain privelege few within Viti society now find themselves in?
Public financial documents no longer available for public (independent)scrutiny.(anybody know patron saint of thieves and pirates?).

Anonymous said...

Maybe FLP members could (should) contribute towards reducing deficit by using funds held overseas?