Nilesh Lal, the executive director of Dialogue Fiji, is urging the government to reconsider the Value Added Tax (VAT) rate in the upcoming budget. This is in response to the high cost of living in Fiji. While the 2024-2025 National Budget has some favorable elements, Dialogue Fiji has expressed concerns about reduced funding for the Fiji Roads Authority (FRA).
Finance Minister Biman Prasad recently announced that the Ministry of Public Works will receive $721.4 million. This budget includes funding for the Water Authority and the FRA, with the FRA set to receive $354.8 million for road constructions, maintenance, bridge and jetty renovations and rural road upgrades.
Lal expresses worry about this budget decrease due to the worsening conditions of the roads coupled with increasing material and labor costs. He believes the budget cut to the FRA impacts road infrastructure improvements even if there are efficiency improvements or changes in contracting methods.
Lal anticipates long-term negative consequences on connectivity and national economic activities due to this cutback. He argues that if a national budget increases year on year, the capital expenditure and allocations for infrastructure development agencies should also proportionally increase, rather than diminish.
Lal warns against the potential of political instability disrupting growth prospects if optimistic revenue projections fall short, resulting in actual deficits higher than expected. He suggests a multistakeholder dialogue to address issues hampering growth.
Dialogue Fiji is set to hold a post-budget forum on July 2 in Suva, where Finance Minster Prasad will be the keynote speaker. This forum will include representatives from various sectors reviewing the budget implications.