Government’s Cost of Living Strategy: What to Expect?

The Deputy Prime Minister and Minister of Finance, Professor Biman Prasad, has acknowledged the absence of immediate solutions to the escalating cost of living in Fiji. He has called on the public to manage their expectations regarding prices, while stressing the importance of continued efforts to address the issue.

Prof Prasad highlighted that although steps have been taken, such as tax relief and reduced import duties, external economic factors—especially inflation in major trading partners like Australia and New Zealand—continue to exert pressure on prices in Fiji.

Despite the introduction of zero VAT on 21 essential food items and the removal of duties on specific goods, the cost of living has still risen. Prof Prasad outlined a three-pronged strategy to help mitigate the situation. The first focus is on protecting vulnerable populations who may struggle to improve their financial circumstances.

The second aspect involves policy adjustments aimed at decreasing costs, which include lowering duties on meat products and maintaining zero VAT on staple foods. Recently, the list of zero-rated items was expanded to cover essential medicines, now totaling 22 items.

Acknowledging that these measures may not entirely offset rising expenses, Prof Prasad expressed that it is unrealistic to expect today’s prices to mirror those of a decade ago. The third strategy centers on increasing wages, noting that civil service pay has been significantly raised after many years, with teachers receiving their first substantial raise in history, ranging from 7 to 10 percent.

This holistic approach reflects the government’s commitment to addressing both the immediate needs of the populace and the underlying economic factors influencing the cost of living.

In summary, while challenges remain in combatting rising living costs, the government’s multifaceted strategy aims to support the vulnerable, reduce costs, and elevate incomes. The continued focus on these areas offers a hopeful path to improving economic stability for the people of Fiji.