Cost of Living Crisis: Government’s Struggle to Provide Solutions

Deputy Prime Minister and Minister of Finance, Professor Biman Prasad, recently acknowledged that the Government currently lacks an immediate solution to address the surging cost of living in Fiji. He has advised the public to modify their expectations regarding living costs while highlighting the Government’s commitment to ongoing efforts to manage price increases.

Despite the introduction of measures such as tax relief and reductions in import duties, Professor Prasad pointed out that external factors, including inflation in key trading partners like Australia and New Zealand, continue to exert pressure on prices in Fiji. Although initiatives like zero VAT on 21 essential food items and the removal of duties on specific goods have been implemented, the cost of living has still not stabilized.

Professor Prasad outlined a three-pronged approach the Government is taking to mitigate the rising costs. Firstly, the focus is on directly supporting vulnerable individuals who cannot increase their income or access assistance. Secondly, the government is making policy adjustments aimed at reducing costs, which includes cutting duties on meat products and retaining zero VAT on basic food necessities. Moreover, he noted the expansion of the zero-rated items list to include prescription medicines, now totaling 22 essential items.

While these interventions are positive, Professor Prasad cautioned that they may not entirely offset the ongoing rise in living costs. He emphasized that price levels are naturally different over time, citing that it is unrealistic to expect current prices to mirror those from a decade ago. The third component of the approach focuses on increasing people’s incomes, which includes a significant pay raise for civil service employees after a prolonged period without such adjustments. For the first time in the country’s history, teachers have received pay increases of 7 to 10 percent.

In sum, while the challenges of rising costs remain pressing, the Government is actively engaging in strategies designed to provide support and enhance incomes for citizens. This multifaceted approach reflects a hopeful commitment to improving the economic well-being of the population, especially those most affected by current financial strains.