Fiji Budget Debate: Seruiratu concerned over government debt

Inia Seruiratu MP (Photo: Parliament of the Republic of Fiji/Facebook)

The Leader of the Opposition in Fiji’s Parliament says the government’s budget will increase national debt from FJ$9.9 billion to $10.5 billion.

Seruiratu said, “The government debt had been on the decline prior to the onset of COVID-19, and in fact, the debt to GDP ratio dropped to below 50%; it only rose as Fiji tried to counter the effects of COVID-19 to ease the impact on our people.

“The total amount of debt will now increase to more than $10 billion, despite the fact that they [the government] have been harping on about excessive debt over the past few years,” he adds.

Seruiratu described the government’s 2023–2024 National Budget as “a big spending budget.”

He accused the government of deliberately focusing on the debt-to-GDP ratio instead of the increase in nominal debt for the country.

“You are not telling the Fijians that the nominal debt is increasing, I hope you are not hoodwinking the people, that is the real story right now. Deliberately, they are focusing on the debt-to-GDP ratio because they have managed to increase their revenue despite the fact that the nominal debt is going to increase,” Seruiratu said.

He continued that the opposition had identified significant weaknesses in the reasoning behind the budget’s forecasts: “The forecast does not take into account the likely changes in the spending habits that will happen once the VAT increases kick in and also the impact of the company tax increases, purchase tax increases, and so forth on the continuity of the high tourism arrival forecast that we currently have.”

Seruiratu was referring to the increase in VAT to a flat 15% rate (apart from 22 zero-rated items), increases in the departure tax, social responsibility tax and a 5% increase in corporate tax from 20% to 25% effective August 1, 2023.

He described the budget as containing little that was new, dubbing it “a microwave budget, just reheating the old manual and serving it to the people”.