PUBLIC WORKERS GET 2 PERCENT CHRISTMAS PAYOUT

SUVA, Fiji (Fiji Times, Dec. 13) – Civil servants have extra pay in their packets this week because of a 2 per cent Cost of Living Adjustment, according to the Finance Ministry.

A senior ministry official said civil servants had been expecting this Christmas payout and the military regime had not objected to it.

"Yes, the 2 percent COLA payout has been worked out and the civil servants are receiving it this week, that has been confirmed," the senior official said.

But he could not say how much would be paid out.

Fiji Public Service Association general secretary Rajeshwar Singh said his members were happy that the Government had kept to the agreement which was signed earlier this year.

"I am glad that whichever Government is in power they should honour these agreement and this is a good sign," he said.

He said the last payout was in October and it included a 2 per cent payout which was backdated to January 1, 2005.

Mr Singh said this was all under the partnership agreement between the public sector unions and the Government. Under the agreement, the Government was supposed to pay out 4 per cent COLA for 2005.

"The civil servants have not received the payout for this year and it will be made early next year and we are aware that there was an allocation of $60million in next year's budget on COLA and other emoluments," he said.

He said it would allow the civil servants to enjoy Christmas and the New Year with their families and friends in a more satisfying way.

Meanwhile, two economists have warned the military regime against removing or reducing Value Added Tax.

It follows plans by the military-appointed interim prime minister Dr Jona Senilagakali not to implement the 2.5 per cent increase from 12.5 to 15 per cent as budgeted by the ousted Qarase-led government to be effective from January 1.

Dr Jona said: "From previous discussions I can come to a conclusion that the military is seriously considering the removal of VAT."

He said the removal of VAT would be a good for the people "because it will improve the standard of living".

Associate Professor and Head of School of Economics at the University of the South Pacific Doctor Biman Prasad said to revert to 12.5 per cent instead of the budgeted 15 per cent by the ousted SDL government would lead to higher level of deficit.

Dr Prasad said if the VAT increase was removed, deficit would be more than the projected 2 per cent of gross domestic product for next year.

Dr Prasad said the magnitude of the deficit could be lowered through prudent financial management and if cutting down on wastage and mismanagement in public service was undertaken seriously.

Dr Prasad said the interim government should look at other revenue/expenditure measures which would help keep deficit to acceptable levels.

However, he said funds allocated in the 2007 Budget for infrastructure and development should not be diverted to other purposes because the maintenance of current and development of new infrastructure would be vital for investment and economic growth.

Australian National University's Dr Satish Chand said the military might not be in a position to reduce VAT to 12.5 per cent this soon.

Dr Chand said the interim administration should consider cutting recurrent expenditure without adversely affecting public investments.

"Cutting waste and corruption while collecting owed taxes would be the most productive option to follow," said Dr Chand.

The large VAT revenue growth from 12.5 per cent to 15 per cent in the 2007 budget was estimated to rake in an additional $75m.

Dr Jona said the final decision on whether to change VAT lay with the military commander Commodore Voreqe Bainimarama.

Ousted Finance ministry chief executive officer Paula Uluinaceva last night did not wish to comment.

But Consumer Council of Fiji chief executive Premila Kumar has called upon the interim government to reduce VAT on consumer goods and services.

"The council in seeking a reduction is asking the administration to consider the current situation in the country, which has affected the daily income of many consumers," said Mrs Kumar. She said in particular due consideration should be given to the many families affected by the laying off of hotel workers from work on a daily basis with others working on reduced hours.

Mrs Kumar said many families were already financially constrained.

She said the closure of the Vatukoula Gold Mine had seen more than 1700 sole breadwinners losing their income.

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