Nilesh Lal, the executive director of Dialogue Fiji, is calling on the government to reconsider the Value Added Tax (VAT) rate in the next budget as a means to address the country’s high cost of living. Lal expressed concern about the reduced allocation for the Fiji Roads Authority (FRA) in the 2024-2025 National Budget despite its positive aspects.
Finance Minister Biman Prasad disclosed on the previous Friday that the Ministry of Public Works would receive $721.4 million in the budget, with $354.8 million earmarked for FRA to go towards the maintenance, construction, upgrading, and replacement of roads, bridges, and jetties.
Lal finds the reduction worrying amid escalating material and labour costs and deteriorating road conditions. He sees it as potentially leading to long-term negative outcomes on countrywide connectivity and economic activities. He noted that it’s usually expected for allocations for infrastructure development entities to increase proportionally with the national budget, rather than being reduced.
Lal further noted that the projected revenues in the budget seem optimistic and warned against possible political instabilities that could impact growth prospects if these projections fall short. He emphasized the necessity to identify the factors slowing growth momentum and create conditions conducive to growth.
The executive director also stressed the importance of creating the right conditions to achieve potential GDP growth. In a post-budget forum on July 2 in Suva, Dialogue Fiji will further address this issue with Prasad as the keynote speaker. The forum will welcome representatives from various sectors to discuss the budget’s implications.