Fiji’s Finance Minister Tackles Rising Living Costs: What You Need to Know

Finance Minister Professor Biman Prasad addressed the ongoing concerns regarding the rising cost of living in Fiji, asserting that the increase is primarily due to external factors such as higher freight costs and inflation from major trading partners, particularly Australia and New Zealand, rather than government policies. During a recent budget consultation in Labasa, he firmly stated, “We are not going around spreading lies about the cost of living or the cost of doing business,” emphasizing the government’s intention to address the issue truthfully.

Prasad acknowledged public criticism over the government’s 15% value-added tax (VAT) on basic food items but clarified that this change was necessary to fortify the country’s fiscal position, which he indicated was previously weakened by multiple VAT rates, leading to revenue leakage. He pointed out that the introduction of a zero VAT rate on 22 essential food items and medicines aims to alleviate the burden on consumers.

The Minister highlighted that despite the challenges, significant progress has been made in improving the country’s economic landscape, which includes necessary adjustments in tax policy and support for vulnerable populations. This aligns with previous discussions where he noted the government’s ongoing commitment to managing rising prices while also proposing a three-pronged approach to mitigate living costs: supporting vulnerable communities, policy adjustments to reduce costs, and efforts to increase overall income levels.

Recent measures, such as significant pay raises for civil servants, particularly teachers, mark a proactive step towards enhancing incomes, which may play a crucial role in amplifying the purchasing power of the populace.

While the complexity of the situation poses challenges, the government’s multifaceted strategy represents a hopeful pathway towards better economic conditions for all citizens of Fiji. As they navigate these fiscal challenges, maintaining a focus on both immediate relief and long-term solutions can provide optimism for the future well-being of families facing the rising cost of living.