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MELBOURNE, Australia (Radio Australia, Nov. 29, 2009) – Fiji is taking steps to provide assistance to the poorest of its citizens.

In his budget speech on Friday, interim Prime Minister Commodore Frank Bainimarama announced a $US 3.9 million program to provide food aid to families.

"This targeted assistance will mean that identified individuals and families will be able to access essential and healthy food items on a monthly basis," he said.

"It will mean that the private sector will be able to participate in this initiative. It also signals that government will henceforth move to targeted assistance."

The food voucher program breaks down to $FJ30, or $US15.68, per family per month.

The budget also contains other initiatives, such as an increase in the police force and a home-buyers' grant program.

"1,000 families can benefit from this scheme, based on an average cost of $FJ100,000 ($US52,400) for a basic house. This grant scheme has the potential to generate a $FJ100 million ($US52 million) into the economy," Mr Bainimarama said.

But apart from the 30-minute speech given by the Commodore last week, no budget papers were released.

That has raised questions about how Fiji's Government will pay for these initiatives.

Jenny Hayward-Jones, director of the Myer Foundation Melanesia Program at the Lowy Institute, has looked at the initial statements of some of the major accountancy firms for some guidance.

She told Radio Australia's Pacific Beat program that some of Fiji's economic figures look more optimistic than what the International Monetary Fund and other international agencies have been quoting in recent months.

"Certainly Government revenues have not been increasing but the devaluation earlier this year has seen foreign reserves recover and some debt has been paid off," she said.

She notes there have been cuts to the budgets for health, primary industries, and even the military, which could be used to pay for assistance programs.

"I guess they do have some room to move in the budget to extend this assistance, and there have been a number of cuts to budgets of many public sector agencies," she said.

"Public sector reform is ongoing, so the money presumably will come to those continuing cuts to public sector expenditure in other areas," she said.

Ms Hayward-Jones says it appears to be a "pro-poor" budget.

"There's a few stimulus elements in there for local businesses and for tourism so the winners I would say are tourism and local businesses certainly, and those suffering from poverty," she said.

However she says an announcement to create 470 more police posts in the same budget that cuts health spending sends a negative signal, particularly when health indicators appear to be declining in Fiji.

"I don't think Fiji can afford to send a signal like that," she said.

Ms Hayward-Jones also says that while Fiji has attempted to stimulate its economy help for local business and tourism, there are some inconsistencies that seem "a little bit strange."

"When you have a look at it, there is a reduction of one per cent in corporate tax of 28 per cent, there are incentives to induce more companies to list on the Fiji Stock Exchange, there is a repealing of the branch profit remittance tax, all these things are positive," she said.

But she says Mr Bainimarama has also amended the non-resident dividend withholding tax and the non-resident miscellaneous tax, which will be an impediment to foreign investment.

"That may even drive some foreign-owned businesses out of Fiji in an already challenging environment for foreign investment," she said.


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