Tackling Poverty and Inequality

By National Federation Party Leader

Professor Biman Prasad

 

On 16th May 2018, the Attorney General and Minister for Economy, while outlining the initiatives taken by Government so far in the implementation of the Cyclone Assistance Relief Effort (CARE) for Fiji Programme in his Ministerial Statement in Parliament,  to our shock and surprise, revealed that only 56 homes were assisted with a maximum of $7,000 Homes Care assistance package because they were the actual number of homes eligible. This is out of 23,896 households that were assisted as of 15th May.

It was shocking because our survey of the areas devastated by floods caused by torrential rain brought about Cyclones Josie and Keni in April show that many homes and households suffered severe damage. Even tenants renting on ground floor of homes, for example in Yalalevu, Ba, lost all their belongings and memorabilia, far exceeding the $7,000 maximum assistance allowed under the scheme.

While thousands of our citizens in districts affected by floods, not necessarily directly impacted by flooding have been assisted, they are now threatened with legal penalties and urged to return their E-cards within two weeks if they have falsified their declarations. It is this kind if policy implementation that is leading to inequality and poverty.

Furthermore, without the official Disaster Assessment reports from NDMO that will pinpoint which areas should be prioritized, it is no wonder that the systems and processes for this much-needed assistance has gone haywire.

A copy-cat Government’s actions horribly gone wrong

On 2nd April, as the flood waters were receding and hours before the Prime Minister actually started his tour of the flood affected areas, the National Federation Party requested Government to implement a comprehensive assistance package aimed at alleviating the plight of our people and preventing them from sliding into poverty.

We suggested the following at that time:-

“1. Deploy army engineers to repair badly damaged infrastructure including schools and essential basic services like water supply. The personnel should also be used to help in the clean-up effort after the flood and distribution of food rations.

  1. Approve a cash grant package to assist flood victims to re-build lost or damaged homes and purchase necessary household goods.
  2. Approve a crop rehabilitation package to assist the agricultural sector including the sugar industry.
  3. For businesses that have lost everything and those in danger of going under despite assistance by their banks, or delays to loan repayments — a specific rehabilitation package is also needed for them.
  4. Funds from the COP 23 Presidency Trust Fund should be diverted towards relief efforts”.

Government has done almost exactly the same, without admitting that it plagiarised our suggestions. That is fine, and we thank Government for doing the same thing as it did in the aftermath of Severe Tropical Cyclone Winston when it took on board our suggestions without acknowledging it. But in the final analysis it does not matter so long as our people are not worse off after an extreme weather event.

A government bereft of ideas

Had Government adopted our proposals for resolving other major challenges like finding long term solutions to our ailing sugar and dairy industries are concerned, it would have revived these important industries, thus reducing poverty. But it was not to be because this Government foolishly thinks it is entitled to a monopoly on ideas.

Even the implementation of CARE for Fiji has now horribly gone wrong, with both the Attorney General and Minister for Women, Children and Poverty Alleviation warning E- card recipients against making false declarations. But it has come too late – the gate is now shut after the horse has long bolted.

It will be an even more exhausting exercise in terms of resources and man-hours to now undo the mess, when it was an error on the part of Government in terms of execution and lackadaisical processes that many experienced civil servants would have warned about, had they been genuinely consulted.

The additional risk is that the only form of identification accepted with the applications was the EVR or Voter Cards, where Government knows too well each individual’s exact details of residence and contact.

The Acting Prime Minister had said in Parliament that EVR cards were the preferred mode of identification because it had details of residence. If that were so, and the government officials had access to that voter information in real-time, how is it that some applicants were then forced to show their places of residence to verify their applications for assistance?

The perception of the use of EVR cards for identification is that, should this Government return to power, it will be a case of the hand that is feeding you, coming back to throttle you if it carries out its threat of an audit to determine the authenticity of assistance that people received. This is a grave danger because a government that has gone berserk will resort to anything, try to buy you out on election eve and suffocate you into poverty for a further four years.

Our advice is take the money, it is not the personal property of Fiji First but your hard earned direct and indirect taxes that you pay for goods and services and vote out this government to prevent the danger of you slipping further into poverty through deliberate Government policies.

Additionally, voters can expect that the Budget announcement on 22 June will be even more laden with more goodies. That is all very well, but many should question the timing and contrast this year’s budgets with the budgets of 2015 – 2017 that impoverished many people.

Tackling poverty

The 2013-14 household and income expenditure survey revealed by Fiji Bureau of Statistics revealed poverty to be around 28.1%. Four years later this figure is at direct odds with given the number of people flocking for assistance as mentioned above.

The rising cost of living, growing low-paid jobs (especially with meagre minimum wages starting at $2.68 an hour, while our Prime Minister receives an average of $3,000 daily in overseas travel allowances), taxes as high as 25% being levied on goods and services, a stricken sugar industry, a botched ‘free medicine scheme’ and a collapsing dairy industry, are examples of the intentional entrenchment of poverty.

70% of our sugar cane growers who produce an average of, or less than 150 tonnes of sugar cane earn a net income of $3,750 every season, which is paid over 16 months. No other business receives its dues after 16 months!

The dairy farmers are battling low prices of raw milk divided into three grades with the maximum price pegged at $1 a litre. This is insanity! Yet the company that imports powdered milk and raw butter enjoys a zero duty concession, without passing any of its savings on to the consumer.

If a local goes to a restaurant which has a turnover of over a $1 million to eat or get takeaway, he or she has to pay 25% in taxes. For example, if one goes to McDonalds and spends $10, one pays $2.50 in taxes.

All this has to and must change and to alleviate poverty and inequality we will:-

  1. Zero-rate 15 food items including basic food and selected items, that is make them VAT free and reduce duties on them. The full list will be in our manifesto.
  2. Implement a phased in living wage of $5 an hour for our ordinary workers giving them at least some purchasing power of basic goods, helped by zero-rating or making VAT free and reduction of duties on 15 food items.
  3. Implement a minimum guaranteed price of $100 per tonne of cane, back-dated to the 2018 season now that elections will be held after the season’s commencement. This initiative, together with the subsidies on fertilizer and weedicide will guarantee growers a net profit of $60 per tonne of cane.
  4. Increase the price of a litre of raw milk to $1.25 to ensure profitability to dairy farmers.
  5. Make all prescription medication VAT free.
  6. Reviewing the free medicine scheme to ensure all free medicine recipients can access all prescription medication instead of the current restrictive list of 142 price controlled generic medications in public and private pharmacies.
  7. Increasing the budget for dialysis to $5million annually instead of the current paltry $300,000 per annum.

There are just some of the measures that we have already announced. More comprehensive policies will be in our manifesto that will be released after the Writ of Election has been issued.