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Suva businessman and veteran garment manufacturer Mark Halabe said he is confident that the 2010 national Budget addresses critical issues faced by the Fiji economy.
Fiji’s economy has, over the years, battled economic challenges associated with low exports and increasing reliance on imports, among others things.
Halabe said while the 2010 Budget – presented by government in Suva yesterday – contained attractive tax incentives like the reduction of corporate tax from 29 percent to 28 percent, it also sought to address Fiji’s chronic economic challenges.
“The one percent reduction in corporate tax certainly is a positive thing for Fiji. The issues ahead of us though are to increase our exports dramatically as the Reserve Bank of Fiji and others have said over and over again, and to reduce our dependence on imports. We need more exports and less imports,” Halabe said.
“Those issues are addressed in the budget, and though we have a long way to go to get to where we need to be, this is certainly the right step forward,” he added.
He also commended measures to revive Fiji as a shopping destination for tourists and said this would go a long way in reviving the economy.
“It would be good to have Fiji as the hub of Pacific duty free shopping. It would be good to have that again where it was over 20 years ago and hopefully that would stimulate the tourism industry. Interestingly the Prime Minister’s comments on having tailor-made suits made in Fiji as a possibility, I found it a bit amusing. But certainly worth following up on,” said Halabe, who owns Mark One Apparel, a textile manufacturing company that exports mainly into Australia.
“But all in all, it has been a generally conservative budget but friendly for investors, friendly for the exporters certainly, and increasing our tourism industry. It is poor friendly, certainly the allocation of funds for food vouchers is a new initiative and it should be interesting how that is picked up and used. The free buses obviously would be continued. It’s interesting how they’re going to implement special rules and conditions, so all in all, it certainly wasn’t as bad as all the rumours that were flying around before the budget, that we’re going to have an increase in VAT and we’re going to have increases in luxury taxes, so that was a nice surprise for us all going through this budget,” Halabe added.
Fiji’s national budget sets out a total government spending of $1.7 billion next year, against projected revenue of $1.48 billion. The government is also expecting to borrow $276 million to service its debt, carrying its total budget deficit to $476 million.
This deficit, which would stand at 3.5 per cent of GDP, is expected to be funded through local borrowings.
