DAILY HANSARD

            Honourable Members, the honourable Minister of State for Provincial Development had asked to make a personal explanation under Standing Order 51.  I have agreed to this, however, I believe, in view of the importance of keeping in accordance with the resolution that was passed in relation to the Budget debate, the personal explanation will be dealt with, as with other business of the House, such as Questions and Ministerial Statements on Monday, 27th November, 2006.

            Secondly, honourable Members, as you are aware, we intend to put the question on the second reading of the Budget before we adjourn for lunch today.  The House will therefore, move into the Committee of Supply when we resume after lunch.

            Honourable Members, I therefore, remind you to bring your copy of the 2007 Budget Estimates, as there is no spare copies with the Secretariat.    

RESUMPTION OF DEBATE ON THE

2007 APPROPRIATION BILL, 2006

            HON. ATTORNEY-GENERAL AND MINISTER FOR JUSTICE.- Mr. Speaker, Sir, I rise to make a brief contribution on the debate on the 2007 Appropriation Bill, 2006, now before this august House and to confirm my support for the Bill.

            Mr. Speaker, Sir, allow me, first of all, to join other honourable Members, who have spoken in support of the Bill, to congratulate the honourable Minister for Finance and National Planning, for compiling and presenting to Parliament and the nation a practical and realistic annual Budget, which promises to and does have the potential to generate economic growth and help steer our country towards a prosperous future. 

            Sir, to fully realise that potential, the message which I believe is promoted in the Budget address by the honourable Minister is that, the initiatives for sustained growth pronounced in the Budget need the support, co-operation, good will and good faith of all our people in the public, private sectors, urban, as well as in the rural areas.

            I hasten to add that I believe, the honourable Minister himself would be the first to acknowledge that his Minister of State for National Planning and the hard-working staff in the Ministry of Finance and National Planning, under the able leadership and guidance of their Chief Executive Officer (CEO), as well as the constructive efforts and understanding of officials from various Ministries and Departments, richly deserve a fair share of this congratulatory message from Parliamentarians, in relation to the arduous and painstaking task of planning, assessing and compiling the foundation on which the genesis of this Bill is based.  This foundation was comprehensively explained to the Joint Sitting of the two Houses of Parliament on 3rd November, 2006.

            Mr. Speaker, Sir, let me make a few observations on the theme of the 2007 Budget, which is "Partnership for Sustained Growth".

            The political partnership that we now have is the first ever for Fiji.  Following the 2006 General Elections, pursuant to the directives set out in our Constitution for the formation of a Multi-Party Government, the honourable Prime Minister extended an unconditional invitation to the FLP to join ranks with the SDL Party, in charting a new direction for our country.  Much to the delight of most right thinking people in Fiji, the FLP reciprocated by accepting the honourable Prime Minister's invitation.  Nine members of the FLP were sworn in as Ministers, following unconditional acceptance by the leadership of the FLP to be in Cabinet.  A Multi-Party Government was then formed.   

            The dialogue and goodwill on the part of both the SDL Coalition and the Fiji Labour Parties, with the very valuable assistance and co-operation willingly given by the private sector, led to the achievement of a very successful National Economic Summit last September.  This new partnership translates into the ownership of the Strategic Development Plan for our nation for the period 2007 to 2011.

            The 2007 Annual Budget is a first for the Multi-Party Cabinet and its genesis, as I said before, is the new Strategic Development Plan.  As in previous years, Cabinet appoints a Budget Sub-Committee (CSB).  Its membership included ministerial representatives of the political partners in the Multi-Party Government from the SDL Coalition and the FLP.  Requests from each Ministry and Department of Government were very carefully scrutinised and assessed by the CSB.  Consensus was reached and decisions were made.  It was then left to the Ministry officials to articulate the resulting calculations and figures and to present these in a budgetary form, which required and did receive the final approval of the Multi-Party Cabinet, before presentation in Parliament.

            This, Sir, is primarily the political partnership process that led to the formation of the 2007 Budget and the initiatives it espouses for the promotion of sustained growth for our country. 

            Sir, as is characteristic of all annual Budgets, the 2007 Budget has some initiatives, which will please some and displease others.  In a determined effort to control the Budget deficit for 2007, there has been overall increases in some key Ministries, whilst others have had very little or no increases.

            My Ministry and the Ministry of Justice, for instance, were among those which have not had much significant increases.  However, Sir, to us, the message is clear, that we are being asked to try and manage on what we are given.  It may retard the delivery of some services we are expected to deliver to the public, but it will not deter us from doing our best to try and manage.  This, in my respectful submission, represents the spirit of co-operation, goodwill and good faith which underlies the principle of partnership espoused in the Budget address delivered by the honourable Minister for Finance and National Planning.

            Sir, I now turn briefly to look at the allocations made to the Office of the Attorney-General.  The Office comprises the Office of the Solicitor-General (also known as the State Law Office), which includes the Legislative Drafting Division, the Fiji Law Reform Commission, the Fiji Law Revision Commission, the Legal Aid Commission and the responsibility for secretarial functions of various Boards and Committees.  The Ministry of Justice, on the other hand, comprises the Office of the Director of Public Prosecutions (DPP), Judiciary, Prisons Department and the various legal registries. 

            Following the fresh reassignment of responsibilities after the May, 2006 General Elections, the responsibility for the administrative functioning of legal registries in the Ministry of Justice, has shifted from the Ministry of Justice to the Office of the Attorney-General.  It now means, that with effect from 1st January next year, the Solicitor-General (S-G), and not the CEO for Justice will be the CEO responsible for the day to day control and administration of legal registrars.

            It means, Mr. Speaker, Sir, that the S-G will be the CEO responsible for all financial and administrative responsibilities for the following areas of service:

            (a)        Office of the Registrar-General, including the following offices - Companies, Patents, Trade Marks and Designs, as well as Official Receivers;

            (b)        Office of the Administrator-General;

            (c)        Office of the Commissioner of Stamp Duties; and

            (d)        Office of the Registrar of Titles.

            Mr. Speaker, Sir, I welcome this change because it should help Government deliver a more efficient and effective service in these areas of Government business, consistent with the need to modernise the structure of these offices and give a new direction on its workfront. 

            Insofar as the Budget allocation for 2007 is concerned, there has been some positive as far as our Ministry is concerned.  I am particularly happy, Sir, with the Budget increase of 37.5 per cent granted to the Legal Aid Commission.  For some years now, the Legal Aid Commission has been plagued with insufficiency of funds and resources.  The Commission receives an annual grant from Government to fund its services to assist those who are economically and socially disadvantaged in our community, in terms of legal services and access to court processes, that they would not normally get if they were to look for and fund their own lawyers. 

            From the grants given by Government, the Commission is now able to settle its operational expenses, as well as pay for the solicitors that are employed by the Commission.  The Commission, like everyone else, is obliged to live and is thankful for the increased allocation.

            Mr. Speaker, Sir, the Fiji Law Reform Commission (FLRC) continues to fulfil its agenda for Work Programme and to complete certain key areas of law reform.  Out of the 2006 Work Programme approved by Cabinet for the FLRC, priority has been accorded to the continuation of the review of the Penal Code and the Criminal Procedure Code, the review of the Charitable Trust Act and the review of the Religious Bodies Registration Act. 

            Sir, other reform work which will be attended to, subject to the availability of funds include the review of the:

            (a)        Mental Treatment Act;

            (b)        Trustees Act; and

            (c)        Gaming Act and the lotteries regulations made under it. 

            By the end of this year, Sir, the FLRC expects to:

            (a)       Complete the review of the Penal Code, and the Criminal and Procedure Code, and this is funded by NZAID; 

            (b)       Complete the initial draft discussion paper on the Charitable Trust Act, and this is to be completed next year with funding by NZAID;

            (c)       Complete the initial draft discussion paper on the review of the Religious Bodies Registration Act, and this is expected to be completed next year with funding by NZAID: and

            (d)       Complete the review of the Mental Treatment Act which commenced earlier this month, and is expected to be completed by June next year, and this will be jointly funded by the Ministry of Health, and the Fiji Law Reform Commission.

            Sir, the Budget for 2007 for the FLRC is $440,000.  This is the same amount as for this year, but the Commission will do its best to effectively perform its role within this Budget, and a grant of some $175,000 from NZAID, specifically for the review of some areas of legislation that I have already mentioned.  I, of course, extend our gratitude to the Government of NZ for the funding assistance granted under NZAID for these reviews.

            The FLRC is also on target to complete its revision programme by the end of next year, when we will then have a fully revised and consolidated addition of our laws in Fiji.  The law revision exercise commenced in 2003.  The work has been extremely painstaking, and has unavoidably taken time to complete. 

            The reviews and consolidation of laws under the Office of the Prime Minister, the Office of the Attorney-General and Minister for Justice, and the Ministry of Finance and National Planning are now largely completed.  This represents approximately a little over 50 per cent of all our laws. 

            The Judiciary, Sir, has not been granted much significant increases, but it will, like most other parts of my Ministries endeavour, to discharge its responsibilities as efficiently and as effectively as may be practicably possible, within facilities and resources already available to it. 

            Mr. Speaker, Sir, I thank the honourable Minister of State for Justice for having covered for us our observations in relation to the budgetary allocations for the Fiji Prisons and Corrections Service, and the Office of the DPP for next year. 

            Mr. Speaker, Sir, I had intended to speak also in support of the requests for some additional funding from the Fiji Human Rights Commission to make out for the loss of funding it previously obtained through donor funding.  However, I thank the honourable Member for Suva City Communal (B.L. Rounds-Ganilau) for very ably articulating that need during her contribution.  I therefore believe that I need not go into it again.

            Allow me, Mr. Speaker, Sir, to move on and touch briefly on some matters which generated some concern arising out of the announcement of the 2007 Budget.  In this regard, I will confine myself to issues which are pertinent to the meaningful survival of the concept of the Multi-Party Cabinet and Government.  It is common knowledge now, Sir, that the meaningful survival of the current Multi-Party Cabinet and Government is at risk, following the directive from the FLP that all its members in Parliament must vote against the Appropriation Bill for the 2007 Budget. 

            The meaningful survival of the current Multi-Party Cabinet and Government is at risk because the FLP directive has touched some very raw nerves on some well-established parliamentary conventions, and some desirable ground rules being negotiated between the partners to the Multi-Party Cabinet and Government at this embryonic stage of its formation.

            I begin, Sir, with the concept of collective responsibility.  I share the views expressed on this subject by other honourable Members, notably, the honourable Minister of Local Government and Urban Development and the honourable Minister of Employment and Industrial Relations.  They have correctly pointed out, in my view, Sir, that the doctrine of collective responsibility has been inherited from our former Colonial master - Great Britain.  It is also a doctrine that is widely recognised and practised throughout the Commonwealth nations. 

            Sir, the doctrine was stated in absolute terms by Lord Salisbury, in as far back as 1978, who said and I quote:

            "For all that passes in Cabinet, every member of it who does not resign is absolutely and irretrievably responsible and has no right afterwards to say that he agreed in one case to a compromise, while in another he was persuaded by his colleagues.

            It is not only in principle that absolute responsibility is undertaken by every member of

            Cabinet who, after a decision is arrived at, remains a member of it, that the joint

            responsibility of Ministers to Parliament can be upheld and one of the most essential

            principles of Parliamentary responsibility established.

            The collective responsibility of Ministers to the House of Commons in Great Britain is often spoken of as a democratic bulwark of the British Constitution.  In Britain, Sir, collective responsibility of Cabinet is a convention.  This convention is a powerful instrument and is regarded as a pronouncement of law.  It has been strongly suggested by Constitutional experts that if Britain had a written Constitution, this provision will be solidly inserted into provisions dealing with Cabinet Governance.

            Here I also, respectfully adopt the three strands of the doctrine of collective responsibility quoted by the Honourable Minister of Local Government and Urban Development from a summary made by a British constitutional theorist, a Mr. Geoffrey Marshal, in his book titled Ministerial Responsibility.  The strands are and I quote:

                 "(a) The confidence principle, which means a Government can only remain in Office for so long as it retains the confidence of the House, a confidence which can be assumed unless and until proven otherwise by a confidence vote.

            (b)        The unanimity principle, perhaps this is the most important practical aspect is that all members of the Government speak and vote together in Parliament, save in situations where the Prime Minister and Cabinet themselves make an exception such as a free vote or an `agreement to differ'.

            (c)        The confidentiality principle, this recognises that unanimity, as a universally applicable situation, is a constitutional fiction, but one which must be maintained, and is said to allow frank ministerial discussion within Cabinet and Government".

            Mr. Speaker, Sir, unlike Britain, Fiji has a written Constitution.  Section 102(1) of the 1997 Constitution provides a key constitutional provision that "Cabinet is collectively responsible to the House of Representatives for the governance of the State".  In simple terms, Mr. Speaker, Sir, this means that all Cabinet Ministers assume responsibility for Cabinet decisions, and actions taken to implement those decisions.  A Minister may disagree with a decision, or with the manner of its implementation, but if he wishes to express dissent in public, he should first resign.

            Much has been said about the differences between the Westminster system of Government, and our own concept of a Multi-Party Cabinet and Government.

            Let me list some of the provisions of our Constitution, which are important for a fuller understanding of this doctrine in Fiji that is the doctrine of collective responsibility.

            (a)        Section 97 - relating to the requirement that Government must have the confidence of the House of Representatives;

            (b)        Section 99 - which includes the power of the President to dismiss Ministers on the advice of the Prime Minister, and the constitutional mandate to form a Multi-Party Cabinet;

            (c)        Section 101 - which requires a Minister to make before the President the Oath of Allegiance and the Oath for the due execution of duty as a Minister, and this entails loyalty to Cabinet and the President;

            (d)        Section 102 - which provides that Cabinet is collectively responsible to the House of Representatives for the governance of the State, and individual Ministers are individually responsible to the House of Representatives, and may I add, not to his or her political party, for all things done by the Minister in the performance of his or her ministerial duties; and

            (e)        Section 107 - which provides among other things that a Government is deemed to be defeated on the floor of the House in a vote that the effect of rejecting a Bill appropriating revenue or moneys for the ordinary services of the Government.

            Mr. Speaker, Sir, the combined effect of all these provisions is that all Ministers, irrespective of whether they belong to a political party, or are independents, vote along Cabinet line on legislation generally.

            The Constitution provides that this duty is especially crucial when the voting is on an Appropriation Bill, because it means that when an Appropriation Bill is defeated it amounts to a vote of no-confidence against Government in Parliament, and the entire Government resigns from office.  Translated to the position of individual Cabinet Ministers, Mr. Speaker, Sir, this means that a vote by a Cabinet Minister against an Appropriation Bill, is a vote of no-confidence in the Government of which the Minister is a part, and a vote of no confidence against the Prime Minister who leads that Government.

            It therefore follows, Mr. Speaker, Sir, that a Minister who votes against the Appropriation Bill now before the House, regardless of whether the Bill is still passed, will leave the Prime Minister with no option, but to advise His Excellency to dismiss that Minister.  The rationale for each such Minister is that, if he or she opposes the Bill, then he or she should tender his or her resignation.  The rationale for the Prime Minister must surely be that a Minister who has by conduct demonstrated that he or she has no confidence in the Prime Minister's leadership cannot expect to retain his or her membership in Cabinet, which he chairs, thereafter.

            The leader of the FLP, the honourable Member for Ba Open (M.P. Chaudhry) was quoted in the Fiji Times of Friday, 7th of this month, as saying that "every FLP member took an oath of allegiance to the party, so loyalty to the party comes first".  Based on my analysis, I would respectfully urge the honourable leader of the FLP to acknowledge that in relation to voting on the Bill before the House, an annual Appropriation Bill, the constitutional duty, which binds all Cabinet Ministers under the provisions of section 107 of the Constitution would prevail over the party loyalty and allegiance that he referred to.  We all know that most, if not all, that this Party's directive has left our colleagues in Cabinet who are members of the FLP in a very awkward position.  I sympathise greatly with their predicament because the spirit of co-operation and comradeship we have established together in Cabinet has been excellent and exemplary.  Should they abstain from voting on this Bill, the honourable Prime Minister has publicly stated that they would not lose their Cabinet seats.  Whether they can be justifiably disciplined within their Party rules for not voting at all, as opposed to voting for the Bill, is an interesting legal proposition that can be usefully tested in Court, I am sure.

            Abstention, I believe, Sir, means the act of withholding one's vote.  It is not voting for or against.  Although for the purposes of counting, it can affect the number of those who vote for or against the motion or the Bill.  The total votes cast by the FLP Cabinet Ministers in this instance against this Bill, will be unlikely to affect the passage of the Bill, but it can place some very serious stress on the fabric of the concept of Multi-Party Cabinet and Government and its meaningful survival, which has become so widely supported by all our people in Fiji.

            Mr. Speaker, Sir, thank you for the opportunity to make my contribution to the debate on the 2007 Appropriation Bill, 2006.      

            MR. SPEAKER.- Honourable Members, I will never forget the way the Solicitor-General described the honourable and learned Attorney-General, when he said, "The Attorney-General is the fountain of justice".

            HON. G.S. RAJ.- Sa yawa!

            MR. SPEAKER.- Honourable Members, at this juncture, I wish to acknowledge the presence in the gallery of some distinguished ladies and gentlemen of our society.  I warmly welcome you all this morning and just to quote from my predecessor, who always said: "Ni bula vinaka, ni mata vinaka mai."

            HON. M.P. CHAUDHRY.- Mr. Speaker, in keeping with Parliamentary convention, may I thank the honourable Minister for Finance for tabling Budget 2007.

            Having said that, Sir, I must hasten to register my reservations about the Budget, in particular the imposition of taxation measures which raise VAT to an intolerable 15 per cent and impose higher Customs and Excise Duty on a wide number of essential household items.

            Our opposition to these measures have been well aired in this House and outside.  Mr. Speaker, Sir, it must be remembered that Budget 2007 was brought down against the backdrop of a mounting national crisis, political uncertainty, an ailing economy, over-borrowing and burgeoning national deficit through Government misrule and financial indiscipline; and increasing social hardship and suffering, with one-third of our people living in dire poverty.  Yet, I see little in the Budget proposals that would provide the impetus needed to spur economic recovery, restore investor confidence or alleviate social distress.

            Conversely, Mr. Speaker, the increased taxation measures will actually hinder economic growth by stifling demand and fueling inflation.  It will exacerbate poverty by forcing low income families to fork out more for basic essentials.

            Mr. Speaker, when the honourable Prime Minister invited the FLP to join his Cabinet, the people of Fiji hailed the move as one that would usher in an era of good governance, restore much needed investor confidence and promote economic revival.  The poor and the underprivileged in society had high hopes that the inclusion of Labour in Cabinet and decision-making would mean a clean, caring and sensitive Government.

            We accepted the invitation because we were confident we could deliver on these expectations of our people.  However, I soon realised, at the very first sitting of the House, when Government introduced the Qoliqoli and the Indigenous Claims Tribunal Bills, without any dialogue or input from the Labour Party, that nothing had changed in essence.  I realised that the concession to power sharing was more or less a farce, restricted to our mere presence in Cabinet.   

            Sir, these two Bills are unconstitutional, contentious and divisive.  Newspaper reports in the past couple of days of tourists being harassed by qoliqoli owners demanding payment for the use of the seas, have confirmed our worst fears that the proposed legislation would be subject to abuse and will violate the rights of other citizens as well as visitors to our shores. 

            Sir, the two Bills, prior to being proposed in the House, had not been circulated as required under the Standing Orders.  No one knew what the contents were.  I asked the honourable Prime Minister in the Business Committee meeting to defer the Bills to allow more time for study and inter-party discussions.   He disagreed and said; "You can go to the Sector Committee and make your input there".   Now, Sir, we are partners in governance.  Is this how we should be treated particularly, when the Bills in question are sensitive, controversial and divisive, likely to impinge on the rights of other communities living here?  Is this what we deserve as a partner in the Multi-Party Government?  So, the honourable Prime Minister tried to bulldoze them through with the consequence that his own Government is now unstable because of these Bills.  Important sections of society have been alienated, and investor confidence undermined by Government's arrogance and its determination to pursue a narrow parochial agenda.  

            Let me remind this House, Sir, that we went down a similar path with the Promotion of Reconciliation, Tolerance and Unity Bill.  It created deep divisions in society, arousing untold acrimony and political tensions, not to mention the vast amounts of public funds used up by Sector Committees conducting public hearings on the Bill.  One will recall the vehement opposition the Bill aroused from the Fiji Military Forces and the weeks of political instability that resulted from this.

            After creating all this furore, the Government is now saying it will remove the Amnesty clause from the Bill.   Is this a responsible way of running the country?  Why could this not have been foreseen in the first place?  It would have saved the nation so much tension and apprehension.  A similar crisis has built up over the Qoliqoli and the Indigenous Claims Tribunal Bills.  

            These Bills have created a fresh political crisis and fears of another coup.  The hotel industry is one of the first casualties of the current political uncertainty with bookings being cancelled and hotel occupancy rates dropping sharply to an average 40 per cent.  Sir, as if this crisis was not enough, we now have the imposition of a 15 per cent VAT and increased Customs and Excise Duty on a wide range of food and essential household items.  These increases will escalate current levels of poverty (we all know that), which already stands at an alarming 34 per cent, and inflict even more hardship and suffering on the poor and low income families.

            Sir, for the first time, we see that a Budget has proved to be unpopular even with the business community, and they have criticised this Budget.  The criticism and opposition to this Budget is countrywide. 

            Sir, I believe the honourable Prime Minister could have avoided much of this, had he taken the path of consensus, as required under a power-sharing arrangement.  Now, one must ask whether he can continue to ignore the Labour Party and govern in the manner and direction in which he has led the country in the past six years?  I think not, judging by the sorry plight of this nation. 

            Mr. Speaker, the time has come to take a look at the Multi-Party Cabinet arrangement and to see whether it has made any difference to the manner in which our nation is being governed.  I believe not.  As far as governance is concerned, it is business as usual, corruption is rife and like a cancerous growth, it has permeated every aspect of public life as is evident from the various scams and the revelations in the Auditor General's report each year.

            Sir, in the past five years or so, we have seen the proliferation of what I call the "Axis of Evil" (to use President Bush's words), a powerful alliance between corrupt politicians, civil servants and unscrupulous businessmen.

            Mr. Speaker, Sir, driven by self-interest and greed, this unholy alliance has eaten up public funds through corrupt practices. It is reckoned that corruption eats up at least $100 million (if not more) a year of public funds.  One must then ask, Sir; why in the five years, the Government had not got around to legislate a Code of Conduct for the holders of high public offices or setting up an Anti-Corrupt Practices Commission, which are constitutional requirements and therefore, mandatory?  Who is Government trying to protect by not enacting these vital legislation as prerequisites of good governance? 

            Mr. Speaker, Sir, we are now being told that a draft Code of Conduct and Anti-Corrupt Practices Bill is in the making.  Some have seen it, but this side of the House has not even been given a copy of this Bill in formulation.  The Constitution requires, as soon as practicable after the Constitution comes into force, to enact this legislation.  We had proposed such a Bill when we were in office, but six years have gone by since the SDL took over.  Despite repeated assurances in this House that there was a Bill coming, nothing came and their five-year term was completed without this constitutional requirement ever being met, Mr. Speaker.  We are now asking; why are Government finances in such a critical state?  Yes, finances are in a critical state, heading for bankruptcy - high debts, a ballooning deficit and fast dwindling foreign reserves, Mr. Speaker.

            Mr. Speaker, Sir, it is an undisputed fact that the SDL stewardship of the past six years has brought nothing but disaster to the national economy and Government finances.  Despite the various economic plans and numerous other documents flaunted in this House and outside, outlining plans for prudent management of the economy and Government finances, the opposite has actually been the case.  Let me provide facts to substantiate what I have just said, Mr. Speaker.

            We all have heard time and again for the last five years, that Government will reduce its operating costs and cut spending on the Civil Service, what I have often referred to as "promise number one".  However, let us look at what has actually transpired in this regard in the last five years, based on figures for 2002 to 2007. The amounts that I will quote for the years 2002 to 2005 are actual expenditure figures, while for the years 2006/2007, the amounts are as budgeted.

            Salaries and Wages for Established and Unestablished Staff are as follows:

            2002    - $468 million

            2003    - $498 million

            2004    - $519 million

            2005    - $525 million

            2006    - $554 million

            2007 (projected) - $642 million

These figures show a sharply increasing expenditure, up from $468 million in 2002 to a projected $642 million in 2007 - an increase of $174 million.  Is the any evidence of any reduction?

            Government's other operating expenditure paints a similar picture.  The figures are as follows:

            2002 - $676 million

            2003 - $711 million

            2004 - $682 million

            2005 - $792 million (a $110 million increase just the year before the Elections)

            2006 - $995 million

            2007 - $1.69 billion

Indeed, Sir, in the 2007 Budget, a sum of $60 million has been specifically provided under the Miscellaneous Services Head, for further salary adjustments for civil servants.  This is no small amount, Mr. Speaker! 

            We are aware that this year, some $54 million was redeployed from the various current and capital allocations, to pay for Cost of Living Adjustments (COLA) to civil servants.  This re-deployment of funds, Mr. Speaker, substantially distorted the 2006 Budget as presented in this august House.  Financial allocations set aside by this House for capital works, essential services such as health and police, and infrastructure maintenance were diverted to salaries and wages.  While people were crying out for urgent repairs to fix our horrible roads, or for increased Police presence to contain criminal activities in their settlements, or for water to be delivered to their homes because the piped system was out of action; they were told; "Sorry, we have no money for these urgent things - we have to pay COLA to ourselves".

            I have been saying for the past five years, Sir, that this Government is hopelessly lacking in financial discipline.  What more evidence does one need to substantiate this? 

            Let me now turn to the SDL's "promise number two", that it will reduce the public debt through reduced borrowing.  Again, I will provide the figures for 2002 to 2005, which give the actual gross deficit and borrowings:

            Sir, the cost of substantial over-borrowing over the years would have amounted to a tidy sum because if you borrow and you put that money in, it is costing you.  You do not borrow for nothing, you have to pay interest and other charges.  So, you are borrowing more than you will need.  In fact, you are borrowing substantially more than you will need and you will have to pay interest and all that.  This would have amounted to a tidy sum of at least, $15 million by conservative estimates, if you take the cost of that borrowing at only two per cent.  That is a luxury, Mr. Speaker, that the taxpayers of this country cannot certainly afford - $15 million down the drain.

            Sir, I ask the honourable Minister for Finance as to whether anyone was held accountable for this almost criminal negligence of duty?  The Auditor-General's Report gives you these figures.

            Sir, $15 million would have been enough to build a 50-bed hospital with all modern facilities.  No, the honourable Minister need not answer, because we all know that no one was held accountable - it was simply paid out.  That is what has been happening, with all the scams and everything.  No one is held accountable, even the Public Service Commission which talks too much about containing corruption, but what did it do in the case of the big scam in the Water Supply Department?  It suspended the officers concerned for a short period of time, fined them $500 and reinstated them but millions of dollars have gone in the scam.  Then, a few months later, some of them were promoted and then we are told by the Commission that the Government has zero-tolerance for corruption.  What a sham, Mr. Speaker!

            The point I am making here is; why have a budget, if you cannot stick to adhere to it?  If you take the money out of what this House has allocated and put it elsewhere, we might as well do not have a budget.  When are we going to get around to having some financial discipline, Mr. Speaker?  Such has been the sorry state of the mismanagement of Government finances, that innocent people of this nation have had to pay twice the price in the last three years for the incompetence of senior civil servants, and their equally inept political masters. Of course, that price is the VAT increase from 10 per cent to 12.5 per cent in 2003, and the latest blow, being the 15 per cent come next January, because of the critical state of Government finances and its inability to control expenditure to rake in maximum revenue.

            Since blowing its Budget deficit, we have resorted to borrowing and more borrowing.  The time has now come when we have borrowed beyond capacity, that we cannot repay.  We need more money to repay and we cannot have that from our operating revenue. So what do we do?  We say: "Well, that is it - the poor again, let us increase VAT" - a very lazy way of doing things.

            Mr. Speaker, Sir, there is a limit to what tax any citizen can pay.  Beyond that, it becomes counterproductive, and I do not think our citizens should be required, or forced to pay for Government's high living, extravagance, corruption and bad governance, not to mention its inability to govern correctly. 

            Today, people are asking; what are we paying tax for, and what services are we getting in return?  Our roads are terrible, health services are in a state of apathy and law and order situation is bad.

            Sir, people do not mind paying tax, if they get value and services in return.  We do not know where our tax dollar goes, and more and more is being asked each year, if it is not VAT increase, it will be duty increase, et cetera.

            Sir, as a result of all these, the economy is in a serious recession, with growth predicted at a mere one to two per cent by independent forecasters.  I am afraid one cannot take seriously the Reserve Bank's forecast of a three per cent growth this year, when our key export sectors such as sugar, garment, gold and others continue to decline.

            Sir, it is true that we experienced a tourism boom in the past couple of years, but now, this very safe haven is threatened by Government's imposition of the Qoliqoli Bill, against stiff opposition from hoteliers and other industry stakeholders.

            I will now turn to another issue of particular relevance to the indigenous resource-owners, and that is mahogany.  Mahogany is another sorry tale under the SDL stewardship, with millions of dollars of lost income to resource-owners each year. In six years, the Government has been unsuccessful in identifying a joint venture partner, to harvest and process mahogany.  It sets up a trial scheme, the beneficiaries of which are people and businesses closely aligned to the SDL Party and the Government.

            The gross exploitation of this once promising bounty has left resource-owners highly aggrieved and angry, as evidenced by the proliferation of road blocks, court cases and the like.  Those who have benefited are the axis of evil that I mentioned earlier - corrupt politicians and their hangers-on and certain businesses closely aligned to them.

            This is a tragedy for the local resource-owners because when the People's Coalition Government was set to close negotiations on a highly lucrative deal with the Commonwealth Development Corporation in 1999/2000, these very people who are now running the resource to the ground, unhinged the process through their lies and anti-Government propaganda.  Yet, had we been allowed to remain in Government, I have absolutely no doubt that today, we would have fully realised the resource-owners' dreams, woven around the billion-dollar industry.  We would, by now, set up a very successful downstream processing industry for this valuable resource.  

            Sir, it is clear that the SDL-led Government is totally bereft of a vision for our nation, and, or any notion on how to deal with the economic and social crisis confronting us - much of it, of course, is its own making.  In this respect, Sir, I find it ironic that the honourable Minister for Finance and National Planning should have as his theme for the 2007 Budget "Partnership for Sustained Growth". In explaining this, he says, and I quote:

            "The new Multi-Party Government has begun a new era of working in partnership"

I am inclined to question the veracity of this statement.

            Although the FLP has nine Cabinet portfolios, this is where the partnership stops.  I am sorry to say, there is no genuine power sharing under the current arrangement.  True power sharing implies a consensus approach to dealing with national issues, and as I have said, Sir, there has been no input from us on important Government policies and legislative measures.

            Mr. Speaker, Sir, genuine power sharing is central to the very multiracial concept of the 1997 Constitution, and anything short of a consensual approach, makes a mockery of this pivotal requirement of the Constitution.  It means dialogue and negotiation on important policy differences.  It means that Government must engage in discussions with the FLP on matters of national concern.  The 2007 Budget has further dashed any expectations we had for a genuine partnership arrangement. 

            Our surveys show that the people at large are extremely disappointed and angry at the prospect of having to pay more for essential food and household items, and goods and services in general.  This will set the cost of living soaring, as increased cost of providing goods and services are passed on to the consumers.              The point I am making is that, the advent of the Multi-Party Cabinet has made no difference to the governance of this nation. Six months down the line, people are asking; what has the FLP achieved for the people, through its partnership in Government?

            HON. T. YOUNG.- (Inaudible)

            MR. SPEAKER.- Order!

            HON. M.P. CHAUDHRY.- Honourable Minister, you pay your debt to the Fijian Teachers Association.  Your bankruptcy proceedings are proceeding fast, so keep quiet and listen.  If you cannot manage your finances, you have no reason to speak in this House.

            We, as a party therefore, have to start looking at whether we have made a difference, and whether taxpayers are getting value for money through this arrangement. More importantly, we have to ask ourselves whether we have a voice at all in the governance of the nation.  Instead, we have been sidelined on all important national issues.  We had no input in the 2007 Budget, and were not even consulted on its key provisions.  As I have already pointed out, we should handle important and sensitive national issues and legislation through dialogue and discussion.

            I must point out very bluntly, Sir, that the FLP must now start questioning the value of its participation in the Multi-Party Cabinet.  If we cannot make a difference to the governance of this nation, if we are not to be consulted on policy matters and legislation, then what are we doing in Cabinet?  Are we simply there to grace nine Cabinet chairs and inflate Government expenses by enjoying the hefty salary and perks that accompany a Cabinet portfolio?  Are we simply there for the status and prestige a Cabinet portfolio brings?  No, that is not my idea of governance, Mr. Speaker, Sir.  The FLP has ethics and principles that it has consistently adhered to.  We will not be part of Cabinet, if we cannot make any difference to the manner in which our nation is governed - that has got to be the bottom line.

            Some have asked as to why we have not presented an alternative Budget.  Well, let me tell them.  Had we been asked or our input requested, we would have done so.

            I did hand down a Budget in this very House in 1999, and it was a very popular one, with not a whiff of criticism.  As I mentioned earlier, it was an expansionary Budget, which gave away much in the way of social benefits, without making a dent in Government finances. Indeed, we were left with a surplus at the end of the day.

            We proved in 1999/2000 that we have the vision to move our nation forward, and the requisite talents and commitment to put that vision into reality.  We revitalised the economy and commerce, leaping from negative performances in 1997/1998, to a virtual 10 per cent growth in 1999.

            Sir, key sectors of the economy - tourism, sugar and garment, all performed at peak levels; agricultural expansion rose by a remarkable 19 per cent in one short year and 10,000 new jobs were created through revived economic activity and confidence. The Government finances showed a surplus.  All these were achieved without any imposition on the people.

            In fact, we gave to the people in the way of VAT removal on essential food items.  We brought 17 other essential household items under price control, reduced Housing Authority interest rates from 11 per cent to six per cent for lower-income workers, signaling a dramatic drop in interest rates countrywide, and we ordered a 50 per cent reduction in third party insurance premium.

            Mr. Speaker, Sir, the list goes on.  The point is, the People's Coalition Government provided a benevolent government, sensitive to the needs and suffering of large sectors of our society.  While our social policies benefited the poor, the private sector also flourished under our firm guidance, good governance and expansionary policies.  I mention this to show that the FLP has a proven track record. It would be injudicious on the part of Government to ignore a partner with such a remarkable track record.  And I am afraid, it has ignored us at its own peril as evidenced by the current perilous state of the nation.

            Sir, today, the Government faces the embarrassing prospect of having some of its Ministers, and its partners in Government (and I am referring to the Labour camp), voting against the Budget.  This setback would have been avoided had we been invited to participate in the formulation process.  We were not asked for our input.  We were not even notified of its taxation proposals.

            Now, the honourable Prime Minister is saying that Cabinet Ministers who vote against the Budget will be sacked.  I ask: is this fair?

            Indeed, the very notion of collective responsibility, Mr. Speaker, has to be reviewed in a Multi-Party Government set up.  The honourable Prime Minister continues to operate as though he is in a Westminster style set up - ignoring its Cabinet partner and demanding concurrence from the Labour Party Ministers on policies which are diametrically opposed to those espoused by their own Party; policies which they are under oath to observe at all times.

            I must remind the honourable Prime Minister of the unequivocal judgment delivered by the Supreme Court on this very issue when dealing with the Multi-Party Cabinet case.  It is a fairly comprehensive ruling, which must act as our beacon in matters pertaining to the Multi-Party Cabinet arrangement.

            With your indulgence, Sir, and for the information of the House, I wish to quote at length from the decision of the Supreme Court in Civil Action No. 282 of 2001.  It starts off with the declaration that the Constitution does not reflect, "some form of ideal model of the Westminster system of Government". Indeed, the judges contend that under the Constitutional arrangement, it is not possible, "to adopt and apply" an ideal type of Westminster model.  In paragraphs 110 to 112 of the Judgment, relating to the workings of the Multi-Party Cabinet, the Judges proclaim, and I quote:

            "The Prime Minister's invitation is not simply an invitation for their members to be there without any agenda or policies of their own.  This is a provision which advances the central constitutional purpose of power sharing ...

            Subsection 99(5) by referring to representation of the eligible parties allows that their representatives may take into Cabinet deliberations their own policies and agendas ...".

To make such a Government workable, the Judges strongly recommend dialogue, negotiation and where necessary, compromise on opposing policies to reach consensus.  Implicit in this pronouncement is the acknowledgement that the honourable Prime Minister cannot dictate policy to representatives of other parties in his Cabinet.  There can be no coercion - agreement has to be reached through dialogue and negotiation.  There can be no arm twisting.  This then, Sir, is the essence of power sharing - an inclusive, consensual approach to governance.

            I recommend that the honourable Prime Minister refresh his memory by reading the Judgment again so that he can adopt a more enlightened approach to the Multi-Party Cabinet arrangement that will facilitate genuine power sharing, than listening to the narrow interpretation given by his learned Attorney-General.

            Sir, some have quoted from the Supreme Court Judgment in this House to support their own agenda.  The truth is that the paragraph quoted to support the concept of collective Cabinet responsibility was taken completely out of the context to try and justify this person's personal agenda.  It was dishonest, to say the least, to try and deliberately distort the central argument of a Judgment which actually showed much foresight and considerable wisdom on the part of eminent judges of the Supreme Court. 

            Now, Sir, unless the honourable Prime Minister adopts a more accommodating attitude to Labour policies in the multi-party arrangement, we will have another crisis on our hands.

            You may be aware, that the Labour Party expects all its Members of Parliament to comply with the decision of the Party's caucus to vote against the Budget.  Labour Ministers in Cabinet are honour-bound to respect this.

            We have written to the honourable Prime Minister informing him that in the event he sacks any Minister for voting against the Budget, all other Labour Ministers would resign their portfolios. Should this happen, it will undoubtedly create a crisis for the Multi-Party Cabinet arrangement.  Five of the Ministers, Sir, have already notified the honourable Prime Minister in writing to this effect, and I am proud of those five Ministers.  To avoid this, the honourable Prime Minister is requested to allow Labour Members of Parliament a free-conscience vote on the Budget.  There is precedence for such an arrangement, even under a rigid Westminster model, which we do not have.  We do not believe in sitting on the fence, Mr. Speaker, therefore abstention is out of the question.  You have to identify yourself to your electorates, where you stand, will you take a convenient way out for your own survival or will you stand by your electorates?  That is the acid test for any politician.  Sir, I was saying that there is precedence for such an arrangement, even under a rigid Westminster model, which of course, the honourable and learned Attorney-General did not quote.      

            In 1932, for example, the National Government in Britain allowed its coalition partners a free vote over tariff reforms.  In what is known as the "Agreement to Differ", Prime Minister Ramsay MacDonald allowed four members of his coalition partner to vote against the tariff proposals.

            HON. M.V. RAGIGIA.- It's a Coalition Government. 

            HON. M.P. CHAUDHRY.- This is better than coalition, it is a Multi-Party Cabinet.

            Sir, more recently, in 1975, the Labour Government in Britain allowed its Members of Parliament a free vote on the referendum for membership of the European Economic Community (EEC).  Because at least three very senior Cabinet Ministers had very deep convictions on the issue, Prime Minister Harold Wilson compromised by allowing them a conscience vote. 

            There is the more recent case of Clare Short, Secretary of State for International Development in Tony Blair's Government, who voted against the British engagement in Iraq.  She remained a Minister for three months (after voting against the Government) before she voluntarily resigned, she was not dismissed.  

            So, Mr. Speaker, even within the Westminster system, there have been occasions when a Prime Minister has had to allow Cabinet Ministers a free vote or a conscience vote on issues on which they have deep convictions, and which may be contrary to Government policy.

            Nearer home, we have the precedent set by the South Australian Government in 2002.  The Australian Labour Party State Government of Premier Mike Rann included two non-Labour Ministers, one an Independent and the other from the National Party in his Cabinet.  Both these Ministers were exempted from complying with Labour policies in relation to significant matters affecting the business community and on issues that were regarded as matters of conscience.  So, Sir, even the Westminster model has had to become more pliant to meet particular circumstances, and there is no hard and fast and rigid rule as implied by the honourable and learned Attorney-General.  The various sections of the Constitution that he quoted are neither here nor there.

            Sir, I would urge the honourable Prime Minister, in the larger interest of the nation, to be more accommodating and allow Labour Ministers a conscience vote on Budget 2007.

            The Multi-Party Cabinet will only survive if there is genuine partnership, based on the fundamental values of trust, honesty and integrity.  There cannot be trust if the Government uses devious means to undermine the FLP at every opportunity.  A case in point is the stance adopted by the honourable Prime Minister on the issue of voting on the Budget.  He deliberately made sure that three Labour Ministers are out of the country when voting on the Budget takes place today.  Now, this is simply devious - a scheme to undermine the FLP, and as such it erodes trust between the two leaders.  No SDL Minister is out of the country; why only Labour Ministers have been sent overseas on so-called official duties?   All Members of Parliament should be required to be in the House during the Budget session, that is how important the Appropriation Bill is.

            The honourable Prime Minister had issued specific instructions to all Ministers not to be absent from the sittings of the House. Why then were these three FLP Ministers given special permission to be absent?  Is it not clear, Sir, that by sending three Labour Ministers away at this crucial time, the honourable Prime Minister is working to undermine the Labour Party?  The honourable Minister for Labour and Industrial Relations and the honourable Minister for Commerce and Industry were last minute additions to the list of FTIB officials embarking on a trade mission to India to avoid their votes being recorded. 

            The honourable Minister for Labour and Industrial Relations is a misfit in that mission, which has very little to do with his ministerial portfolio.  I believe he was so happy to be given the opportunity to flee, that he was almost singing about his visit to India on the late bulletin of the Fiji One News last week.  Well, sing or cry, honourable Minister for Labour and Industrial Relations, you are getting your medicine from your electorate.  I am sorry that despite his big guts, he did not have the courage to face his electorate to tell them the story of his betrayal.  He said in this House, Sir, that he can do more by staying in Cabinet at the expense of his people than by being outside.  Yes, honourable Minister for Labour and Industrial Relations, you can that, what you really meant was that you can do more to build up a hefty pension for yourself, while kicking in the stomach those who elected you - by voting in favour of the Budget.

            The honourable Minister for Environment, has been given leave to attend three conferences in three different countries, which will keep him away for five weeks, completely missing the Budget sitting. What a wonderful paid holiday at the expense of the starving taxpayers of Fiji.  This Mr. Speaker, Sir, shows that trust and integrity is lacking in this arrangement and we will not be a party of any arrangement that is not built on the foundation of trust and integrity, let me make this very clear.

            Mr. Speaker, Sir, this may also be an appropriate time to mention the informal offer made to me to join the Cabinet as Deputy Prime Minister. I did not wish to discuss this, but I am constrained to do so, because the honourable Minister for Labour and Industrial Relations mentioned it in this august House.  I thought that was privilege communication between us, but he did not respect that confidentiality and now I am constrained to reply.

            While I thank the honourable Prime Minister for the honour, I am forced to question its timing. I distinctly remember, Sir, that straight after the 2006 General Elections, when the honourable Prime Minister invited the FLP into his Cabinet, he told the Media in no uncertain terms, that there will be no post of Deputy Prime Minister and that he was not going to give any such post to the FLP Leader. Nor have I forgotten the fact, that in 2003, when he was forced to accept FLP in his Cabinet, following the Supreme Court ruling of July 2003, the honourable Prime Minister made it clear that he would not accept myself, the honourable Minister for Environment and honourable Dr. Ganesh Chand in his Cabinet.  However, let me make this very clear, if I go into Cabinet, it will be to make a difference to the governance of our nation. The lure of a prestigious post does not move me. I have never been in politics for money or for greed of office.

            (Chorus of Interjections)

            In 1999, when I took over the Prime Ministership, it was to deliver on FLP's promises to the electorate, and deliver we did, in one short year.  Sir, for me, the people come first. I cannot be part of any government that is insensitive to the needs of the common man and that is riddled by corruption and parochialism.

            As I have said before, there must be trust and integrity, and a government committed to the principles of equity and social justice.  So far, I see little evidence of any commitment by the current Government to these universal principles.

            That is why I, as leader of the FLP, have now decided that before we progress any further, there must be agreement on fundamentals.  I will not commit myself to a Cabinet office, unless there is a very clear agreement on a charter, to determine how this nation will be governed for the next four years or so.   Contentious and divisive legislations such as the Qoliqoli and the Indigenous Claims Tribunal Bills, will not receive the support of the FLP.

            Likewise, Mr. Speaker, Sir, Government will have to adopt a more inclusive stance on the land issue.  It cannot insist on imposing NLTA on a tenant community that sees its security tied up intrinsically with ALTA.  Our concerns have to be accommodated, just as we are prepared to accommodate the legitimate grievances of the landowners.

            Mr. Speaker, Sir, if the Multi-Party Cabinet arrangement is to survive, then it must be clearly understood that we are only in it, to move the nation in a new direction and to get rid of corruption, greed and lawlessness, uproot racial discrimination, alleviate poverty, improve the quality of life of all our people and revitalise the economy.

            Once again, Sir, let me stress that we can only bring about these changes, if there is genuine partnership forged through dialogue and consensus.  To my detractors, I have this to say, I will not be deterred from the principled path the FLP has adopted, and steadfastly hold on to, since its inception.

            To the nation, my message is that the Multi-Party Cabinet in itself, is not the panacea for all our ills. Let me explode this myth once and for all. There is a perception out there, Sir, that the Multi-Party Cabinet must stay, no matter what - a feeling that by the miracle of some magic, it will make a huge difference to governance and solve all our problems.  Well, the reality is far from this pipe dream. Any power-sharing arrangement can only work, if there is a genuine will to make it work, through a consensual approach, dialogue and negotiation. There has to be inclusivity, trust and mutual respect. 

            Sir, the FLP will not allow itself to be used to give legitimacy to Government's ethno-nationalist agenda, nor will it allow Government to use the Multi-Party Cabinet to break its solidarity. It is interesting to note that a senior diplomat remarked to me just recently, that the Multi-Party Cabinet was being used to break the FLP.  That shows that we are not indulging in some kind of paranoia.  Other perceptive observers have also realised that the Multi-Party Cabinet arrangement is a farce, being used to advance certain agendas which are definitely anti-Labour.

            To conclude, Sir, some mischief-makers in this august House, who have a habit of barking on every subject, have accused the FLP of not making its stand known, on the stand-off between the Army and the Government.

            Mr. Speaker, Sir, I do not know in which world they have been living in. I was out of the country when the crisis erupted, but immediately on my return, we held a caucus meeting and issued a media statement, stating the FLP's point of view. The criticism has no substance, and we made it clear that we would not support any extra constitutional means to remove an elected government.

            Let me assure these people, that our Party solidarity is intact, despite a few renegade MPs blinded by their own greed and lust for power. The FLP will also remain steadfast to its principles of multiracialism, social justice, equity and adherence to the rule of law.

            Sir, I call on the honourable Prime Minister to rise to the occasion. The nation is in dire straits and it needs the joint cooperation and consensus of all Parties, to work out a road map to lead the country out of this morass. For this, you need genuine partnership and power-sharing. 

            With that message, Mr. Speaker, Sir, I must emphatically state my opposition to the Budget.     

            MR SPEAKER.- Honourable Members, I will now adjourn the House for morning tea.

            The House adjourned at 11.00 a.m.

            The House resumed at 11.45 a.m.

            MR. SPEAKER.- Honourable Members, again, I wish to take this opportunity to welcome our visitors, particularly, the students of Classes Six and Eight and their teachers from Ellington Primary School.  My tau have come all the way from Ra.  I warmly greet you this morning and thank you for taking the time to be here with us and, of course, able to witness some of your honourable Members contribute in this House.

            HON. L. QARASE.- Mr. Speaker, Sir, I rise to express my strong support for the 2007 Budget.  The Budget is historic because it is the first one to be presented since the formation in May of the Multi-Party Cabinet.  I will be commenting on this aspect later in my contribution.

            Mr. Speaker, Sir, what happens when the vote is taken, we will have a large bearing on the future of the new form of multi-ethnic cooperation which now provides the basis for Government in our country.  That cooperation is needed now more than ever before, in view of the deep racial divisions which define politics in Fiji in the current threats to peace, stability, constitutional Government and the rule of law. 

            I will first speak on some of these specific areas of my portfolio responsibilities in the context of the Budget. 

            My Office has the responsibility for assisting to meet the development needs of Fiji's minority communities including, Rotumans, Banabans, Kioans, Melanesians and Vasu-i-Taukei.  Some members of these groups are among the most disadvantaged of our citizens.  In my view, they are the forgotten people.  Various schemes are available to give specific assistance to Indo-Fijian farmers and others whose ALTA (Agriculture Land and Tenant Act) leases have expired. 

            Minority groups also have their difficulties with land tenure.  Many of our Melanesian brothers and sisters were settled on church owned-land, when they first arrived in Fiji from the Solomon Islands and Vanuatu.  Now, they are in their third and fourth generation here.  Many have integrated through marriage into the indigenous Fijian community, but do not qualify under the 1997 Constitution to be registered as "Fijians".  Furthermore, in some cases, the church that owns the land wants to use it for its own purposes.  The minority communities affected, therefore, needs special consideration. 

            We are providing a sum of $500,000 for 2007 to assist these minority Melanesian and Vasu-i-Taukei communities to acquire freehold land and obtain proper leases on native land they have been occupying informally, sometimes for generations.  If they wish to attain the security of legal tenure and ownership, the Government will help them through this funding, provided that the land they are occupying is for sale, or the owners are willing to lease. 

            I am pleased to note that the development fund of $120,000 provided this year in my Office for the Melanesian and Vasu-i-Taukei communities, has been fully used in 16 projects, spread through different parts of Viti Levu and Vanua Levu.  Special assistance through the Prime Minister's Office to the island communities of Rotuma, Rabi and Kioa, will continue.  This is supplemented by various other types of community assistance provided by Government through different Ministries.

            Mr. Speaker, Sir, while I am discussing the affairs of our ethnic communities, let me add my voice to the condemnation of temple desecration.  Such acts are criminal and sacrilegious; they are an attack on religious beliefs and an offence against the ideals of tolerance and consideration for the feelings of others.  There is no place in Christianity for this type of hurtful behaviour.  It is against the very core of the teaching of our Lord Jesus Christ that we are to love our neighbours irrespective of race or religion, just as we love Almighty God, our Heavenly Father. 

            Mr. Speaker, Sir, affirmative action is central to our mission of making a stable and harmonious country.  It is about social justice, creating equality of opportunity and overcoming the burden of poverty for all the disadvantaged.  The policy is administered from my Office.  The Budget provides a substantially increased allocation for affirmative action.  As in previous years, the 2007 funding for this, is one of the main tools of Government for assisting the poor and marginalised.  There has been little recognition of this by the critics of the Budget.  Our spending on affirmative action, the results it is producing, the opportunity it offers and many other initiatives, are proof that Government led by the Soqosoqo Duavata ni Lewenivanua (SDL), have a greater commitment to the poor than previous administrations.  This is a matter of record that can be easily verified in the Annual Reports which my Office has tabled in this august House on the implementation of Government's Affirmative Action Programmes.  The latest of this Annual Report, is for 2005 and is being tabled at this sitting.

            I hope the honourable Members who are opposing the Budget, will carefully read this Report.  Many who have opposed the Government's Affirmative Action Programmes, have done so on the basis of the spurious claim that affirmative action is "just" for the Fijians.  This is propaganda by those trying to promote ill-will and ethnic division for political gain.  Affirmative action is pro-poor initiative, which benefits the disadvantaged and needy from all our communities. 

            Sir, 17 programmes are available for all, 10 are specifically for the Indigenous and Rotumans, and two are specifically for the Indo-Fijian and other minority communities.  Those covering all communities include the following:

            (a) scholarships and students loan;

            (b) family assistance scheme;

            (c) rental subsidies for accommodation for poor people;

            (d) poverty alleviation;

            (e) self-help projects;

            (f)  agriculture;

            (g) housing and squatter settlements;

            (h) small business and micro-finance schemes;

            (i)  training and assistance for pensioners; and

            (j) disabled. 

All of these are directed specifically towards the poor and disadvantaged. 

            Shortly, after its establishment, the Multi-Party Cabinet approved the doubling of the minimum welfare allowance for the family assistance scheme for needy families and individuals.  This is one of our most important Affirmative Action Programmes.  The increase in the allowance was consistent with a pledge in the SDL Manifesto to push on with our national effort to extend social justice and fight poverty.  We have allowed for an additional overall allocation to the scheme next year, so that assistance can be given to more people.  This is another pro-poor initiative. 

            Multi-Ethnic Scholarships for the disadvantaged Indo-Fijian and minority students, are part of affirmative action.  Funding for this has gone up substantially over the years.  There is another increase in next year's Budget - an additional measure to support the poor.  The same applies to the Students Loan Scheme, which is open to all economically disadvantaged young people and the list goes on.  It is a testimonial to our commitment to beating poverty and raising prosperity.

            I reaffirm to the House that a comprehensive mid-term review  of all Affirmative Action Programmes, will start early next year.  This will take into consideration legal and constitutional issues and other local factors, Fiji's international obligations, and treaties and international human rights laws.  The review will help us to ensure that the policies are as inclusive as possible.  If necessary, new additions and adjustments are to be made to the existing 29 programmes to ensure that no deserving sector of our population, irrespective of where they live in Fiji, is excluded.

            On the crucial issue of curbing poverty, I have often said that there is a broader picture that honourable Members of the FLP and the Parliamentary Opposition, ignored.  It can truly be said that our entire agenda is about helping people to move out of poverty.  We have, for instance, boosted the Health Budget by $8 million.  When a nation invests more in the health of its people, that is a direct contribution to the fight against poverty.  Healthier populations are better placed to improve themselves, enhance their economic position and earn more. 

            Education gives people the power to leave poverty behind and achieve their dreams of a successful life.  Our Government, therefore, seeks a better education at a reduced cost for all children, especially those from poorer and low-income families.  The education budgets during our time in office, have always received the largest allocation of funds and that will be the case in future. 

            Mr. Speaker, Sir, education spending next year will reach a record of $333 million, 11 per cent more than 2006.  That is yet, another anti-poverty initiative.  The cost of education to working people and the poor have been significantly reduced in previous Budgets.  The allocation of $21 million for paying the full salary of grant-in-aid teachers will further cut back the cost of education to committee schools and families of students.  It will no longer be necessary for schools and their communities to contribute a 20 per cent share through the salaries of these teachers. 

            Investments in roads, water and electricity supplies, communications, housing and transport are also essential for turning back poverty.  All the allocations in the Budget for these sectors of the economy should be seen in that light.

            Mr. Speaker, Sir, there has been much concentration on one issue - the decision to increase Value Added Tax (VAT) by 2.5 per cent.  Those who are focussed on this are suffering from some sort of tunnel vision.  They are locked on to VAT, to the virtual exclusion of other parts of the Budget, which support the poor. 

            To them, the entire Budget revolves around VAT.  They have chosen it as the tax that might break up the Multi-Party Cabinet.  Those who demonise VAT need to be aware that it is increasingly important as a source of revenue for governments world wide.  It is recognised as one of the fairest and most efficient method of taxation.  Sir, 120 countries, including many developing nations much poorer than Fiji have successfully adopted it. 

            In our region, Papua New Guinea, Tonga, Vanuatu, Samoa and the Cook Islands have VAT.  I understand that the Solomon Islands are also considering introducing it.  Only five countries have ever removed VAT and three of them; Ghana, Malta and Vietnam, later re-introduced it. 

            Sir, VAT rates vary.  Research shows that 25 per cent is at the high end, with other rates at 24.5 per cent, 23 per cent, 22 per cent, 20 per cent, 19.25 per cent, 19 per cent, 18 per cent, 17 per cent and 16 per cent.  Some rates are lower than this. 

            A survey by a firm of accountants showed that the worldwide average VAT rate was 16.4 per cent.  So, Mr. Speaker, our proposed 15 per cent compares well with these figures.  I remind the House that VAT is not charged on a number of basic consumer items; powdered milk, tea, flour, sharp, tinned fish and kerosene are all exempt.  This is another pro-poor measure.

            VAT in Fiji should not be seen in isolation.  It is not a stand-alone tax.  It is part of a policy package that has included reducing income tax and increasing financial support for the disadvantage and the needy. 

            This policy is outlined in the 2007 Budget.  It will put more money into the pockets of a further 10,000 income earners, who had been freed from paying any income tax at all.  This brings to about 26,000 the number of income earners exempted from paying income tax, since raising the income tax threshold in 2003. 

            There is, additionally, to be a VAT exemption on the surcharge imposed on electricity bills for residential dwellings.  I ask honourable Members to note that VAT is returned to our citizens in various forms, including assistance in education, health, social welfare, poverty alleviation, squatter resettlement, housing and provision of essential utilities like water and other infrastructure. 

            With VAT, most of the revenue comes from the rich and the middle class.  The more you consume, the more you pay.  VAT spreads the collection of taxes more evenly, so that everyone pays a share.  It is also fairer because it means that the burden of tax is no longer carried by a relatively small group, who were therefore, financially punished and penalised.  With VAT, everyone pays a little and those who have more, pay more.  VAT also means that people who are avoiding tax find themselves making a contribution they cannot escape from. 

            Mr. Speaker, the leader of the FLP and the honourable Member for Ba Open (M.P. Chaudhry) complains that his party was not consulted about the VAT increase.  As a former Minister for Finance, he knows very well how the Budget system works.  He knows that taxation and revenue measures are the prerogative of the Minister for Finance.  The honourable Minister does not disclose this to his Cabinet colleagues until just before the announcement of a Budget.  That is what happens in this instance. 

            There are sound reasons for this confidentiality.  Again, the honourable leader of the FLP understands this.  There had been plenty of earlier discussions with the FLP ministers about the broad principles of the 2007 Budget.  They were also told about the sectorial allocations, especially those concerned with easing the lot of the poor.  Indeed, submissions from the FLP ministers were taken fully into account, when final decisions were made on the allocations.  So, it is not true to say that FLP was not consulted about the Budget.  Its ministers were fully involved in the Budget planning but in line with normal convention, they were not aware of VAT and other revenue measures until just before the announcement of the Budget. 

            The same also applied to the SDL ministers and the others.  They did not know what was proposed until the morning of the Budget presentation.  I believe, Mr. Speaker, Sir, that this was exactly the same procedure which the leader of the FLP and the honourable Member for Ba Open himself followed, when he was Prime Minister and Minister for Finance.  I doubt whether he had consulted the FLP's coalition partners beforehand. 

            Mr. Speaker, Sir, I had spent sometime discussing VAT, because it is the single most contentious matter in the Budget.  The position the FLP has taken on it is a threat to the Multi-Party Cabinet.  I hope that what I have said will assist members of the FLP to view VAT in a more balanced way.  It is not a demon tax, it is a fair tax and used in many countries with deeper poverty than we have.  There is no need for it to become the tax that breaks the Cabinet.  I should add here that the increase on import tariffs on some imported food items is designed to encourage greater consumption of our nutritious local produce, which will favour the farmers of Fiji and reduce our import bill, thus, saving foreign exchange.

            Some economists and politicians are claiming that there is a crisis in our foreign reserves.  I will just say that it is apparent that we need to increase them.  It is for this reason that we have launched a comprehensive export strategy but in the meantime, the Reserve Bank recently issued a statement confirming that Fiji's external reserves remain at comfortable levels. 

            Mr. Speaker, I would now like to report to the House the latest developments in the restructure of the sugar industry.  I am pleased to say a positive picture continues to emerge.  The Sugar Technical Mission Roadmap aims to increase cane production to 4.25 million tonnes in 2009.  Increased milling and field services efficiency should improve cane yield to around 75 tonnes per hectare.  Mill performance and throughput are to be lifted to an average of 280 tonnes of cane an hour or 50,000 tonnes a week for the three largest mills; Rarawai, Lautoka and Labasa.

            The target for the Penang Mill is 15,000 tonnes per week.  There is an improvement in milling performance this season.  Penang, the smallest mill, has ended its season with a record of over 289,347 tonnes of cane crushed against a target of 250,000 tonnes.  This mill has effectively produced a total of 30,308 tonnes of sugar and 10,985 tonnes of molasses.

            This result was produced by a concerted effort from all stakeholders, including the farmers, FSC staff, Sugar Cane Growers Council and the contracted harvesters.  The same positive trend can be expected at Lautoka, Rarawai and Labasa.  The industry is expected to lift cane production this year by 14 per cent to 3.2 million tonnes.

            With the current improved performance and the gradual turnaround of the industry since the beginning of the restructure in 2004, the scale of financial support provided by the Government to the FSC is slowly declining.  This year, the level of Government guarantee required by the FSC for its effective operation, is down to $40 million.  This is in contrast to the guarantee of $75 million needed in recent years.

            Mr. Speaker, Sir, I think it can be said that this is a remarkable achievement for an organisation that was on the brink of financial collapse.  Despite the planned reduction the European Union (EU) sugar export subsidy to Asia, Caribbean and the Pacific (ACP) countries like Fiji, we are on track for survival in a competitive market.  We can do it, Mr. Speaker, if we work together.  We cannot contemplate failure, because sugar is so important for our economy and so many people depend on it for their livelihood.

            A crucial part of the reorganisation involved refurbishing the ageing mills through a loan package of $86 million from the Indian Government.  The equipment for the mill upgrading has arrived and installation will start after the end of this year's crush.  Some of the new machinery should be commissioned for the start of the 2007 crush.  Rarawai, Lautoka and Labasa are to be refurbished under the Sugar Technical Mission Programme.  Penang is to be upgraded with unused machinery from the other mills.

            The farming and field sector of the industry will get substantial assistance from the EU.  This will be supplemented by the Alternative Livelihood Project, financed mostly by the Asian Development Bank (ADB).  The EU package will comprise $350 million over eight years, starting in 2007.  The aim is to improve yield and productivity to ensure our exports are competitive.  The first part of our EU funds, totalling $8 million, will be available in January.  Most of this is to be used for cane replanting programme, extension services and research and development.  A professionally staffed Project Management Unit is to be established shortly in Lautoka to coordinate this EU Strategy Programme.  Some farmers are expected to take up farming other commodities.  They, too, will be given help to establish themselves, including housing assistance. 

            Mr. Speaker, the present system of remuneration to the farmers is spread over too many payments and takes too long.  I have, therefore, asked the FSC to make changes.  I would like to see farmers receive the total forecast price, which is 85 per cent of the total expected price, two weeks after delivery of cane to the mill.  The remainder should then be paid as quickly as possible after all revenue and costs are finalised. 

            Meanwhile, the Government has appointed a Board to oversee the establishment and administration of the new Sugar Research Institute.  The Chair is an experienced sugar scientist from Australia.  He is to be assisted by another scientist from Australia and one from India.  The Board had its first meeting on November 15th, to map out its strategic direction. 

            The restructure involves the closing down of the Sugar Commission of Fiji, streamlining the operations of the Sugar Cane Growers Council, and reorganising the membership of the mill area committees.  A recent study by the Asian Development Bank (ADB) recommended retaining the rail transport system.  Consultations are now taking place on this. 

            Mr. Speaker, Sir, I am sure honourable Members of the House will agree that the industry is now moving in the right direction.  A crucial element of the re-organisation is for the FSC to become a producer of power for the national grid and ethanol fuel for local and export market.  Electricity will be generated from bagasse and ethanol is to be manufactured from sugar.  This diversification for the FSC is linked to our plans for the development of a bio-fuel industry.  The aim of this is to reduce our dependence on expensive imported fuel.  FSC is aiming for 90 per cent renewable energy by the end of 2009.

            On cogeneration of fuel, the FSC and the pine industry are the key players.  They expect to increase the power they produce from biomass beginning next year.  Planning trials have been undertaken by the FEA and the Land Transport Authority (LTA) to identify the most appropriate combination of coconut, canola and palm oil to power generators and motor vehicles. 

            Our Bio-fuel Development Unit is the focal point for the development of these alternative sources of energy.  Its priorities include encouraging private investment, assessing the amount of land needed for bio-fuel production, coordinating an ethanol facility in Labasa and maximising cogeneration from the Lautoka and Rarawai mills using bagasse and other bio-fuel to meet electricity demands on Viti Levu.

            Mr. Speaker, Sir, the vexed question of the Civil Service Reform is being pursued with renewed vigour.  Previous efforts to revitalise and re-organise the Service have faulted.  It has been difficult to overcome the old ways and implant fresh spirit and principles, based on an absolute commitment to higher performance and better results.  However, change there must be, if we are to transform the Service into one of excellence and efficiency, fully geared to advancing in economic growth and development. 

            The entire Public Service - its people, management and organisation is a hinge on the doorway to prosperity.  That door will only open wide, if all the departments and ministries are working to their total capacity.  I have decided to take direct ministerial responsibility for the new reform initiatives in conjunction with the Public Service Commission (PSC). 

            Sir, the PSC has been requested to set up a department, specifically dedicated to coordinating and overseeing the reform.  It will draw from existing personnel and budget allocations.   There will be better control of expenditure, improved productivity and management systems in all areas of Government. 

            Expenditure is to be reduced by a number of measures.  These include:

            (a)       the realignment and right-sizing of organisation structures, and a reduction in overall staff;

            (b)       removal of overlapping functions;

            (c)       the introduction, in consultation with the unions, of a single integrated system for annual pay and performance review;

            (d)       the rationalisation and divestment of unused and obsolete capital infrastructure; and

            (e)        the rationalisation of the Government vehicle fleet. 

            We expect a reduction in the cost of service and operating budget, and a corresponding increase in capital investment and improved accountability.  There will be a comprehensive effort to improve the knowledge and work skills of all civil servants.  Integral to this will be a very active programme to develop the values of honesty and integrity, political impartiality and neutrality, and a commitment to excellence in serving the Government of the day and the people. 

            Mr. Speaker, those annual reports from the Auditor-General bring shame to the entire Service and to the Government.  There is shame too in the amount of corruption that continues to surface - not just in the Civil Service, but in the private sector as well. 

            I welcome the PSC's more proactive approach in stamping this out among public servants.  This may be given more teeth by an anti-corruption law, cleared by Cabinet for introduction into Parliament.  Also coming through the system are a Freedom of Information Bill and one covering standards of leadership.  Both of these will have an important role in turning back corruption. 

            Let us not forget that the Constitution already has a Code of Conduct.  Those it applies to must avoid conflict between their private interests and their public duties.  They must not compromise the fair exercise of those duties, use their offices for private gain and allow their integrity to be called into question.  Finally, they must not do anything to diminish confidence in, and respect for the integrity of the Government. 

            Again, I share with you my condition, that in the final analysis, professional and personal integrity comes from the spiritual and family values we absorb from outside.  We were all taught the difference between right and wrong.  We were taught about respect for rules and to observe fairness and decency in our relationships with others.  These codes of life should guide us at all times. 

            Fijian civil servants, in particular, must always be conscious of balancing the deep impulses and values of tradition, with disciplines and responsibilities of modern management.  There has to be a clear distinction between the two.  When they become mixed together, difficulty usually follows. 

            Mr. Speaker, Sir, I have taken responsibility for investment because it is one of the indispensable requirements for maintaining and lifting economic growth.  From growth, comes economic activity that creates jobs and raises incomes.  Fiji was known, for many years, for its chronically low investments, but it picked up substantially in response to SDL policies and our commitment to improving the business climate.  Some of the biggest commercial projects Fiji has ever seen got underway, producing thousands of jobs, particularly in tourism and construction.  More of our people, for the first time had access to micro-finance, enabling them to invest in and start their own small businesses.  The rate of investment went up to about 18 per cent of GDP, with a significant increase in the amount of private capital committed to new projects. Clearly, we were well on track to reaching our target of investment equivalent to 25 per cent of GDP.

            I must now confirm to the House, with deep regret, that much of what we have achieved in rebuilding confidence and spurring new investment has been seriously undermined by the Army's intervention in politics and its threats against the elected Government.  However, because of the Army's actions, projects are being put on hold, companies are losing incomes, some jobs have been lost and others are being threatened.  Foreign governments have issued travel advisories warning about the threat of force from the Military.  Overseas media are full of stories about the possibility of an Army takeover.  It is not surprising that bookings in our hotels are being cancelled and forward business is drying up.  The Army has pledged that it will not stage a coup against a democratically elected Government.  It gave this undertaking again to the Great Council of Chiefs (GCC), but rumours persist, fuelled by aggressive and inconsistent statements from the Commander and some of his officers.  As always, it is the ordinary people who suffer the most from this sort of crisis.  The Army leadership, meanwhile, tries vainly to argue that what is happening is not its fault.  That argument does not stand up, it defies actuality. Fiji and the entire international community know where the threat is coming from. 

            I take this opportunity to publicly assure the Commander of the Republic of Fiji Military Forces (RFMF) of my continuing readiness to discuss with him the issues of concern to the Military.  My door remains open, I will also continue to emphasise to the Army leadership, the fundamental importance of the rule of law, Constitutional democracy, parliamentary processes and accountability and good governance.  I am confident in my heart that in God's guidance, we have the ability in ourselves to reach an amicable resolution through dialogue. For me, there is only one condition on my readiness to enter into dialogue with the Army.  I say here clearly, firmly and unequivocally that Government will do nothing to compromise or interfere with the rule of law.

            Mr. Speaker, Sir, I would like to place on record here, my sincere gratitude and appreciation both to their Excellency the President and the Vice-President, and the GCC for their efforts to encourage the Army's leadership to engage in dialogue with the elected Government.  I also call on the Military to accept the Government's reference to the Supreme Court, the issue of the scope and extent of the RFMF's role and responsibilities under the Constitution.  The opinion of Fiji's highest Court should greatly assist Government and the Military in coming to a common understanding on a constitutional and statutory role of the RFMF.

            Let me say, that I do not regard the Army, an institution, which has served our country well as an adversary, neither should the Army see me and the Government as its enemy.  The fact is that we do have differences with the Military leadership on a number of issues. These should be solved amicably in the national interest. Our Constitution tells us that when there are differences, we should discuss these in good faith. There is also the traditional Fijian way of seating together, talking freely and openly until a consensus emerges.

            Mr. Speaker, Sir, when I say that I am ready to engage with an open mind in discussions with the Military, I was referring specifically to their concerns with three legislative proposals by Government.  The first of these is the Qoliqoli Bill. 

            This proposed legislation was not conceived and plucked out of the air by the SDL Coalition Government.  It had been on the agenda of the Alliance Party and the SVT.  The People's Coalition Government in 1999 made a commitment to it, when he spoke to the GCC on June.  It had been on the agenda of the Alliance Party and the SVT.  The Government of the honourable Member for Ba Open (M.P. Chaudhry) in 1999, made a commitment to it.  When he spoke to the Great Council of Chiefs on June 4th of that year, he said, and I quote:

             "Finally, we shall be following up the initiative taken by the previous Government to confer ownership rights to all traditional fishing rights owners."

He went on to ask for an assurance from the GCC that other citizens would be given fair opportunities to participate in the commercial exploitation of fishing and other marine resources, to the mutual benefit of all.  That is very similar to the position we have taken. I am confident that the democratic process we have followed in giving a Parliamentary Sector Committee the task of engaging in wide community consultation on the Qoliqoli legislation will help us to find a position, which responds to the legitimate concerns of the resource owners, while safeguarding the interests of the public and investors.  We have always pledged to do this, as anyone who has been listening can confirm.  Public access will be protected as will the right to free passage recognised by international law. Appropriate management, supervisory and enforcement systems are to be introduced for licences, permits and fees for commercial usage, such as fishing and other water sports.  The power of enforcement officers, as set out in the Bill, will be reviewed to ensure that this is consistent with other relevant laws and will not be arbitrarily exercised without regard for the rights of those affected.

            The report of the Sector Committee which has been hearing the views of the people throughout the country, will be invaluable in assisting Cabinet to determine the final content of the Bill.  The Military was one of the groups, which made submissions on the proposed legislation.  I am quite sure that their views have been fully considered by the Committee along with the opinions of those in the vitally important tourism industry, and the many other groups and citizens who made presentations. 

            I assure the House that Cabinet will carefully consider the report and recommendations of the Sector Committee, and make changes as necessary. 

            I ask the Military to allow the democratic process to be completed.  The people have a right to be consulted and this right should be respected.

            On the Promotion of Reconciliation, Tolerance and Unity Bill, I can again reaffirm that the amnesty clauses, which attracted so much criticism have been dropped.  This was in response to the concerns expressed by sections of the public.

            The legislation will now provide for a Reconciliation Commission with a limited and specific role.  Its main purpose will be to bring together in reconciliation, victims of what happened in 2000 and those who acted against them.  These perpetrators would be people who were involved but could not be charged because of insufficient evidence. 

            The Commission will encourage the victims and the offenders to come together.  Offenders will have an opportunity to confess and ask for forgiveness.  Victims will have an opportunity to extend forgiveness and seek some form of reparation.  This reconciliation procedure will be particularly helpful to victims who might find the court process too costly and complicated.  They have a basic right to have their grievances considered and to be assisted.  People who have already been charged and sentenced can only seek relief by direct application to the Prerogative of Mercy Commission.  They are also free to seek the assistance of the Reconciliation Commission.  The Commission can then examine individual cases, on application, and submit a report to the Prerogative of Mercy Commission.

            I emphasise, however, that any recommendation for mercy to His Excellency the President, can only come from the Prerogative of Mercy Commission.  The Reconciliation Commission will not have amnesty power as envisaged in the original Reconciliation and Unity Bill.  This means that the process will remain within the existing machinery of the law.  The rest of the Bill will focus on the establishment of a statutory body to be responsible for promoting national unity.  At present, this is undertaken by a National Reconciliation and Unity Council appointed by the Government.  Transferring this role to a statutory authority will create an independent entity with its own mandate and representing all the communities of Fiji.

            I stress again that the revised Bill will in no way interfere with the independent authority of the Courts, the Director of Public Prosecutions and the Police.  The Indigenous Claims Tribunal Bill is also going through the democratic processes of public consultations.  I again make the point that this should be completed.  The Parliamentary Sector Committee report will similarly be closely examined by Cabinet and changes will be made, subject to the Committee's recommendations.

            I stress that the Indigenous Claims Tribunal will provide Fijians with a forum to present long-standing grievances about the alienation of some of their ancestral land.  The Native Lands Commission and the Native Land Trust Board have in their records more than 500 petitions from landowning units detailing their grievances over loss of ancestral land.  Many felt this had happened unjustly.  The Indigenous Claims Tribunal legislation will not interfere with the rights of others. 

            Mr. Speaker, Sir, right from the start of my service in national leadership, I felt strongly that it is wrong to ignore the pleas and the oft-expressed wishes of the Fijians over these historical grievances.  So long as the undercurrents of unhappiness and discontent associated with them continue, we can never be assured about long-term stability in Fiji.  That is the fact of it.

            Mr. Speaker, Sir, permit me now to provide some background to the recent engagement between myself and the honourable Member for Ba Open (M.P. Chaudhry) on a number of questions, including some non-controversial changes to the Constitution, the rules for the operation of the Multi-Party Cabinet and the resumption of discussions on the resolution of the crucial agricultural lease issue.

            These last two issues have very wide significance for the welfare of the citizens of Fiji.  The Multi-Party Cabinet gives us a platform for forging a multi-racial method of governing Fiji.  Finding a solution to the agricultural lease impasse is a matter of pressing importance.  It affects the economy and the continuing uncertainty, particularly hurts the Indian farmers.  Several thousands of them have already been displaced.  There has been great human suffering because of this.  This is why Cabinet has decided to move with urgency on renewing discussions for an agreement. 

            The honourable Member and I had decided that we would deal with these matters at the end of the first three months of next year.  We had also agreed that a study group would go to New Zealand earlier in the year, to look at how that country manages its coalition Government and Cabinet arrangement.  We felt New Zealand's experience had some relevance for our own situation. 

            Agreement had been reached for dialogue to take place on these national political issues between the honourable Member for Ba Open (M.P. Chaudhry), the honourable Leader of the Opposition and myself.  Two meetings were scheduled last week, one on the land issue and the other on consequential changes to the Constitution.  I then received a letter from the honourable Member for Ba Open (M.P. Chaudhry) in which he had back-tracked on what had been agreed.  He now does not want to proceed with the political discussions we had agreed on.  The honourable Member's new stance is that, we must first resolve the Cabinet ground rules.  He says that he is acting on the instructions of his Parliamentary caucus and his party's executive council.  Mr. Speaker, Sir, I have to say that this appears to be a move to again delay considerations of the agricultural lease question that is causing so much distress to the farmers, who the honourable Member represents.

            The honourable Leader of Opposition and I therefore, decided to meet on our own and move forward with this political consultation.  Today, I again appeal to the honourable Member for Ba Open (M.P. Chaudhry), to join in these discussions on land and the Constitution, in the overall interest of the nation.  There is an inconsistency in his change of position.  On the one hand, he says that the FLP Ministers and the FLP backbenchers must vote against the Government because of the 2.5 per cent increase in VAT, while on the other hand, he is showing no regard for the farmers who are trapped and demoralised by the continuing uncertainty over land.  There is no reason at all for this to continue.  A solution can be found by constructive consultation by the Multi-Party Cabinet, the honourable Member for Ba Open (M.P. Chaudhry) and the FLP.  I make the point to the House that I am guided in my leadership by the values of trust and loyalty.  If I make a commitment, I will do everything I can to abide by it.  I will be loyal to my side of an arrangement and given my trust to those I am dealing with.  These ideals, as a foundation for national leadership, are betrayed when agreements are broken and dishonoured.  They are betrayed when what has been agreed, is suddenly and unilaterally changed.

            Mr. Speaker, the vote today is not just a vote on the Budget.  It is also a vote on the Multi-Party Cabinet and its future.  For the first time, elected Members of Parliament of our main ethnic communities are serving side by side as Minister and because of the ethnic separation that is a defining feature in the politics of our society, it was never previously possible to form a Government that was genuinely representative of our different groups.  We have that now.  It gives us the opportunity to promote political co-operation as a new foundation stone of governance in Fiji.

            The leader of the FLP and I have started talks on the rules governing the operations of Cabinet and Government backbenchers under the new arrangement.  We made good progress at our meeting on Monday and I very much hope an agreement can be finalised before the end of the first quarter of next year.

            Mr. Speaker, in anticipation of the vote that will shortly be taking place, I reminded all honourable Ministers yesterday of the principles that bind the Cabinet.  The first is that of collective responsibility.  This is laid down in the Constitution and requires all Ministers to stand together in support of decisions taken collectively by them in Cabinet.  The second is the Oath of Office, each Minister takes when accepting appointment by His Excellency the President to a ministerial portfolio.  The third relates to a fundamental principle of parliamentary governance.  A Government's Budget is a major Bill.  If a Budget Bill is defeated, it is, in effect a vote of no confidence both in the elected Government and the Prime Minister.  I have asked all the honourable Ministers to weigh these considerations very carefully.

            Now, Mr. Speaker, Sir, I am conscious that the Labour Ministers have been placed in a difficult dilemma.  I understand their predicament.  Their party has directed them to vote against the Budget.  If they do vote against this important measure that was approved in Cabinet, they will have to resign.  Failing that, I will have to ask His Excellency the President to terminate their appointments.  I just add here that there is nothing personal about this.  As Prime Minister, I am duty bound to uphold the principles I have outlined.  If they vote for the Budget, they will be standing by these principles, but then they risk expulsion by their own party.

            Mr. Speaker, I would like to announce that, in this instance, I will accept an abstention by the FLP Ministers when it comes to the vote.  I am doing this for a number of reasons.  An abstention will enable the Labour Ministers to safeguard their integrity and preserve their loyalty to Fiji's supreme law, the Constitution.  It will also be expression of respect for the high offices of President and Prime Minister of the Republic of the Fiji Islands.

            Sir, as for me, personally, my decision on this is a reflection of my commitment to the Multi-Party Cabinet and is continuation.  It is an indication of the value I attach to the contribution to Government of the Labour Ministers.  It is also a statement of my loyalty to those who are loyal to me.  I appeal to the honourable Member for Ba Open (M.P. Chaudhry) to reconsider the FLP's directive on voting.  he should do this in the national interest and in the interest of multi-ethnic co-operation represented by the Multi-Party Cabinet. 

            Mr. Speaker, Sir, at this juncture, I would like to make some comments on the issues raised by the honourable Member for Ba Open (M.P. Chaudhry).  In his contribution this morning, he said that my Government is devious.  I interpret that to mean that the Prime Minister is also a devious person.  If the honourable Member's statement is directed at me, I must say that I am not a good judge of my own personality.  I will leave that to the honourable Members of this House and members of the public to judge what sort of person I am.  The honourable Member made that remark when he said that for some devious reasons, I sent three FLP Ministers on overseas visits.  Let me explain what I did.

            The honourable Minister for Environment asked for attendance at two conferences during this month.  That was well before the decision by the FLP, to direct all its Members to vote against the Budget.  It was never even considered at that point in time.  I allowed his overseas visit because the honourable Minister had never undertaken such a visit to attend a conference, since the formation of the Multi-Party Cabinet.

            In relation to the honourable Minister for Commerce and Industry, she also applied to go overseas to attend the Trade Mission in India and beyond, well before this particular problem arose, that is, the directive from the FLP for all its Members in the House to vote against the Budget.  Sir, I agreed to that because India is becoming a very important partner for Fiji, in terms of trade and investment, and I thought it was important to allow her to go, following on my successful State Visit to India last year.

            The honourable Minister for Labour and Industrial Relations was a late addition, for a very good reason.  The Mission is led by the honourable Minister for Foreign Affairs and External Trade, together with the honourable Minister for Commerce and Industry and the honourable Minister himself.

            Mr. Speaker, Sir, I allowed the honourable Minister for Labour and Industrial Relations to go, to give a multi-ethnic composition to their team and it is a very good reason.  The honourable Minister himself is a seasonal politician, a very capable person and he can handle all sorts of situation that he might come across in India and other places that they will visit. 

            I must also say that some Members of the SDL went overseas during this sitting of the House, and they came back.  There were two or three Members who went away for short periods of time on special assignments. 

            I just want to assure the honourable Member for Ba Open (M.P. Chaudhry) that deviousness is not my characteristic, it is something very alien to me.  However, I cannot say the same for the honourable Member.  I have travelled extensively throughout this country, mixing with Indian leaders from various religious groups, et cetera, the grassroots people and very often, I have heard that word "deviousness", applied when they talk about the honourable Member for Ba Open.  In fact, one of the previous leaders of the National Federation Party told me; "Mr. Prime Minister, you will never come across a person more devious than the honourable Member for Ba Open".

            Mr. Speaker, Sir, the honourable Member again, boasted about his performance during the years 1999 to 2000, about the economic growth achieved during that year.  He cannot claim credit for that, and we have said that so many times in this House, that the credit must go to the SVT Government.  There was a bumper crop in the sugar industry, arising from what the SVT Government did the previous year, and the harvest was very good the following year.  That was why they achieved nine per cent. 

            Also, Sir, one year is a very short period of time, to allow the impact of any policies that you might put in place, and he knows that very well as a former Prime Minister.  So, the achievements in the first year that he was the Prime Minister of Fiji, can be attributed to the performance of the SVT Government the previous year.   I am surprised that he continues to claim credit for that, but I must say that credit is not due to him or to his People's Coalition Government, it should be due to the performance of the SVT Government the other year.

            Mr. Speaker, Sir, I was very disturbed about the comments made by the honourable leader of the FLP, against the honourable Minister for Labour and Industrial Relations.  Sir, the comments were really below the belt.  We all know that the honourable Minister is a seasonal politician and an excellent debator.  In fact, he is probably the best debator in this august House.  He has excellent command of the English language, a reasonable person and he is prepared to sit down and reason things out with other people.  He does not just take off in a hurry, without getting down to talk with other people around the table to sort matters out.  The honourable Minister is not made of those characteristics.  It is a pity that the sort of remarks from the honourable leader of the FLP should be directed at a person of the stature of the honourable Minister, particularly, when he is absent from this House.

            Mr. Speaker, Sir, the honourable Member for Ba Open complained about the lack of consultation, in relation to the formulation of legislation and their passage in the House.  I want to remind honourable Members that during his one-year as Prime Minister, the People's Coalition Government rammed through 45 legislations.  A small fraction of those legislations were referred to Sector Committees, and some were even referred to the Sector Committees for five minutes and brought back to the House.

            Sir, in here, the honourable leader of the FLP is talking about consultation and look at what we have done.  Every step of the way, we follow the processes laid down in the Constitution.  We propose a legislation, it is gazetted, tabled in the House, read the first time, read the second time, and then is put to the Sector Committees.  Sir, that happened to the three Bills that he is complaining about - the Reconciliation, Tolerance and Unity (RTU) Bill, the Qoliqoli Bill and the Indigenous Claims Tribunal Bill.  He has every opportunity to air his views through the mechanism that is provided for under the Constitution.  What other consultation does he want under those Bills? 

            Sir, those Bills were approved by Cabinet in which nine FLP Members are represented.  The three Bills were referred to Cabinet Sub-Committees on Legislation (there is probably one or two other Cabinet Sub-Committees), so the consultation in all those Bills have been very thorough so far up until now, and there will still be further consultations, as I have mentioned in my contribution this morning.

            Sir, when the honourable leader of the FLP talks about lack of consultation in proposing legislation and getting them through, I would just like to remind him to look back at his record during 1999 and 2000 where he rammed not less than 45 legislations (some of them fairly controversial), in this House and some of them were referred to Sector Committees for only five minutes.

            Mr. Speaker, Sir, I want to clear my position on the so-called offer of the position of Deputy Prime Minister.  There has been a lot of misreporting in the press.  It must have originated from the honourable Member for Ba Open (M.P. Chaudhry).  In the dailies, some mentioned that I offered the position of Minister for Finance to the honourable Member.  I am not a crazy guy to give him that Ministry.

            Mr. Speaker, Sir, in relation to the position of Deputy Prime Minister, I had asked him whether he would like to join Cabinet.  We did discuss, and I explained some possible options, and I did mention that option.  There has never been an offer of the position of Deputy Prime Minister to him.  I cannot make that offer because there is no vacancy in Cabinet at the moment.  Maybe, after the vote today, there will be some vacancies, but certainly not now, as I only make an offer when there is a vacancy in Cabinet.

            Our discussion was purely exploratory and I explained some options, and I did mention that that particular position could be for consideration.  He said that he was going to go back and think about it, that was probably one or two months ago.  He has not come back since and I have accepted that in view of his comments inside and outside this House, and what is recorded in the dailies that now he does not want to join Cabinet, and I accept that.

            Mr. Speaker, Sir, on the Multi-Party Cabinet, I have no doubt that the honourable leader of the FLP has no interest in the formation of a Multi-Party Cabinet between the SDL and FLP.  This was quite clear from the beginning when he did not want the FLP to join Cabinet under the Multi-Party Cabinet provision.  He was forced by you guys there to join the Multi-Party Cabinet.  Now, he is looking for a way out, or an excuse to derail the Multi-Party Cabinet.

            I recall an earlier address by His Excellency the Vice-President, and that remains very clear in my mind.  He said something to the effect that "the honourable Member for Ba Open is in a very strategic position to derail the Multi-Party Cabinet at any time".  It looks as though this is the time he has been waiting for, to direct all FLP members to vote against the Multi-Party or the Budget, so that it can give him an excuse to derail it.  He is trying his best to put the blame on us when that happens.  I do not think people are fools, they know what has been happening.  They know his position and his stand that he is totally against the Multi-Party Cabinet.  I appeal to you all reasonable honourable Members that for the sake of the country, do not follow your leader, do not follow your leader, do not follow your leader.

            Mr. Speaker, Sir, I finish today with a heartfelt statement of concern for our country.  My remarks are directed again towards the Republic of Fiji Military Forces.  I make an earnest appeal to the Commander and his officers, to think about the consequences of the climate of fear and tension that they have created.  This has not only affected overseas confidence in Fiji, it is equally having an impact on the delicate fabric of our multi-cultural society - the racial gulf is widening.  This is evident in some of the things that we are reading and seeing in the media.  It is deeply troubling that the majority of one section of the community appears to favour Military intervention in Government.  That is the conclusion to be drawn.

            The other major ethnic group does not support this.  This leaves us in a very finely balanced and potentially dangerous situation.  Every person in this House has a responsibility to help to preserve peace and to bring our different peoples closer together.  Our late President and Prime Minister, Ratu Sir Kamisese Mara, always stressed that harmony among our races could never be taken for granted.  It had to be worked at continuously.

            We need reconciliation and dialogue, Mr. Speaker, Sir.  We must carry on with the cause of healing the wounds left by 2000, and bridging our differences.  The procedures and measures for reconciliation and nation-building in the PRTU Bill now become even more important, especially for promoting harmony and understanding in our community.  I ask all citizens to pray for our country.

            Mr. Speaker, Sir, I express my firm support for the Budget, and I support the Multi-Party Cabinet, as a means of taking this country forward.    

            HON M.P. CHAUDHRY.- Mr. Speaker, Sir, I rise pursuant to Standing Order 52, to seek your permission to clear the misrepresentation of my speech by the honourable Prime Minister.  In explaining this misrepresentation and misunderstanding, I assure you that I will not introduce any new matter.

            Mr. Speaker, Sir, there are three issues that I will deal with briefly.  The first concerns the Deputy Prime Minister's position.

            Sir, as I have said earlier that it was not my intention to make it known at all, because it was a privileged communication between the honourable Prime Minister and myself, and I regret that the honourable Minister for Labour and Industrial Relations raised that in this House.

            All I can is, yes, there was a discussion of that nature and let me recount that in the honourable Prime Minister's words.  I was asked by him whether I was still interested in a position in Cabinet.  My response to that was; "Prime Minister, you are doing fine without me, I don't think you need me".  He then came back and said; "Well, if you consider the offer, I will consider you for the position of Deputy Prime Minister".  I can swear an oath to that, Mr. Speaker, Sir.  I then said; "I will let you know".  I never said that the honourable Prime Minister offered me the post of Minister for Finance.  I never said that anywhere.  There was no offer of any portfolio, although he did say in a sort of a question form, I suppose the portfolio was the Ministry of Finance, and then he said whether there would be any other portfolio that I was interested in.

            That was the sum total of our discussion on that matter, and I want to make that clear so that people would know both sides of the story, Mr. Speaker, Sir.

            On the Multi-Party Cabinet, again let me make it clear that I have no intention of derailing the Multi-Party Cabinet, and I have made it very clear in the speech itself.  However, what I am emphasising is that the Multi-Party Cabinet must have certain ground rules.  It must be built on a foundation of trust, honesty and integrity, and it must move the country.  It must not be used to serve the agenda of a particular political party or group of politicians.

            The honourable Prime Minister said that I never had the intention of going through this arrangement and he said that I was forced into it by my members.  Nothing could be further from the truth because in the caucus meeting, against the wishes of some of my members and some who are Ministers now, I directed that we go ahead.  There was absolutely no truth in that.  However, yes, I repeat and emphasise that it will have to be an honourable partnership, nothing less and nothing more.  That must be very clear.

            The third issue, Mr. Speaker, Sir, is a very unfortunate comment that there is support by one ethnic community for a Military takeover.  Now this mischief has been spread by the Tebutt Poll.  This Poll has created a lot of mischief in this country from time and again, to serve its own purpose, or its own political masters, I do not know, and it is such a distorted poll that I have stopped taking any notice of it.

            In my own case, I have never been ranked as getting more than 55 per cent support by the Indian community in this poll, but in every election, I manage 90 per cent of the Indian votes.  So I do not know how this poll is conducted, how responsible it is and I think it is designed to fulfil a particular political agenda.

            Let me assure the honourable Prime Minister that all right-thinking citizens of this country, whether they be of any ethnic community, will not support an extra constitutional takeover of an elected Government, and we stand by that.  So he need not worry.  All we have got to do, Mr. Speaker, Sir, is to govern this country rightly.  I think that is the very important question.

            Sir, why is there support in some quarters for extra constitutional measures?  Maybe because the people of this nation are sick and tired of the way they have been governed, and this is an expression coming from them, which the honourable Prime Minister and Government must take heed of.  It cannot continue to ignore this fact.

            Mr. Speaker, Sir, thank you for giving me the opportunity.

            MR. SPEAKER.- Honourable Members, the honourable Member for Ba Open has invoked Standing Order 52, which I have looked at and therefore allowed him to speak immediately after the honourable Prime Minister.

            Honourable Members, I will now adjourn the House for lunch.  We will resume at 2.30 p.m. with the Right of Reply from the honourable Minister for Finance and National Planning. 

            The House is now adjourned.

            The House adjourned at 12.57 p.m.

            The House resumed at  2.40 p.m.

            HON. RATU J.Y. KUBUABOLA.- Mr. Speaker, Sir, I rise to present the Right of Reply on the 2007 Appropriation Bill, presented to this House on 3rd November, 2006.  Sir, a lot has been said in the past week on the 2007 Budget debate.  We, of course, expected and welcome the varying views on it.  We have heard from honourable Members of this House, we have also listened to comments from academics, civil societies, the people and the media.  Sir, some have expressed their support for Government to deal decisively with the challenge that we face and reduce debt, improve living standards and stimulate exports.  Some said that they like some aspects of the Budget but not all.  Others, however, were dismissive and disagreed with the total Budget.

            Mr. Speaker, Sir, my task this afternoon is to reply to these different responses to the 2007 Budget.  I will, of course, not be able to cover all the issues that have been raised, and I do not intend to do that.  My task has been made easier by honourable Ministers who have spoken and the honourable Prime Minister (who spoke this morning) covering issues raised in the Budget debate.  What I intend to do is to firstly try to again clearly map out to this House the economic and financial foundations that this Budget was built upon.  In my view, it is extremely important that this House and the people of Fiji fully appreciate the bigger picture of why these choices have been made and the reasons why the budgetary measures have been introduced.  Secondly, Sir, I will try to address some of the key issues that have been raised.

            However, before I do that, Sir, allow me to make some general observations on the Budget debate.  Firstly, Sir, while it was expected to hear criticisms of the Budget, I did not hear any viable alternative being suggested.  Criticism is always easy.  The honourable Leader of Opposition or the shadow Finance Minister was long on ideologies but unfortunately very short on practicalities.  Secondly, Mr. Speaker, Sir, some chose not to understand statistics.  For example, they claimed that the economy has declined when they have seen the economy grow in the last six years and will continue to see growth into the medium term.  Additionally, they said that investment was declining when the figures show that investment has risen to its highest level for a long time. 

            Thirdly, Sir, the honourable Leader of Opposition commented on the past years' Budget themes.  A theme simply captures the strong underlying message to a story and provides a rallying point.  They are not ends in themselves.  The 2007 Budget will be guided by the theme of "Partnership for Sustained Growth".  The partnership refers to working hand in hand with everyone - private sector, civil societies and the people of Fiji.  The Government is practising this partnership through its consultation on the Strategic Development Plan and the National Export Strategy.  I will explain later the consultative process that we undertook in formulating the 2007 National Budget.

            Mr. Speaker, Sir, the "sustained growth" refers to growing the economy on a lasting basis.  For growth to last, it must be built on a strong foundation.  A strong foundation means that growth must be inclusive, macro-economic stability must be secured at all times and exports must drive economic progress.

            Mr. Speaker, Sir, let me now outline the framework of the 2007 Budget.  Sir, we have seen the economy grow since 2001.  Investment has risen, inflation is low, foreign reserves are at adequate levels and private sector confidence is high.  At the same time, Sir, we face a few challenges.  We must face these challenges squarely.  We cannot procrastinate.  I wish to mention two of these pressing challenges that this Budget is addressing.

            Firstly, Sir, it is very clear to everyone that we need to increase our exports to fund our rising import bill.  We are now implementing an export strategy with the help of our development partners to raise exports.  This will, of course, take time.  Immediately, we need to move to protect our balance of payments.  Prudence is of essence.  The Reserve Bank of Fiji has therefore raised interest rates, but high interest rates discourage investment, therefore, the Government's Budget must also bear its responsibilities in dampening demand.  Sir, this Budget has done just that by raising duties. 

            Sir, these measures are directed towards raising production of vegetables, meat and fowl.  In turn, this encourages our local producers to meet domestic demand for specific food items.  This also presents a lucrative opportunity for them to supply the tourism industry. 

            The opposition to these measures, Sir, reveals lack of faith in our local farmers' and meat producers' ability to substitute imported food items.  Let us put confidence in them filling this gap.  Sir, this measure is in line with the Alternative Livelihood Programme which encourages and enables local farmers to vigorously pursue vegetable farming and meat production.

            Mr. Speaker, Sir, the second challenge is our debt position.  Government has deliberately used the Budget to promote growth in the last six years.  This has resulted in higher deficit which has led to rising debt level.  Debt is now over 50 per cent of GDP.  Sir, we have emphasised that this debt level, while higher than our historical level, is still moderate by international standards.

            Mr. Speaker, Sir, almost everyone has cited debt as an important issue, but in the same breath, many say that we should continue spending or we should not raise revenue.  These are not compatible.  We must make clear choices.  We are making that choice now.       

            Sir, as I said, this Budget is about prudence and building a strong foundation for future growth.  We have therefore decided that since the economy has grown for six consecutive years, it is now time to take our debt level back to 45 per cent of GDP by the year 2011.  To enable us to do this, the deficit from now onwards, beginning next year will be no more than two per cent of GDP.

            Sir, the 2007 Budget will start Government off on a sustainable fiscal path.  The target to lower debt to GDP ratio to 45 per cent is largely addressed through the broadening and strengthening of our revenue base.  On the tax side, we will pursue further tightening of compliance measures, particularly in high risk areas and the collection of arrears.  Furthermore, the increase in VAT should bolster Government's operating revenue base significantly, thus leading to expected increases in its operative revenue. 

            Mr. Speaker, Sir, I would like to respond to the comments made this morning by the honourable Member for Ba Open (M.P. Chaudhry) regarding alleged discrepancies between Government's borrowings and reported deficit figures.  Sir, this is yet another example of deliberate misquoting of figures to mislead the public.  The honourable Member is trying to equate the total debt securities issued to our gross deficit figures.  Sir, the gross deficits are residual figures over a period of time and reflect the true borrowing position of Government over the year.  The figure used by the honourable Member relates to the total debt issued, which is the amount offered to the market for lending.  The actual amount of borrowings are the amount finally allotted to lenders and that is the amount that equates with our gross deficit and borrowing ceiling.  Sir, I can attest that Government lived within its fiscal limits for the last two years.  The discrepancy quoted is nothing more than either ignorance or misleading statements, at worst. 

            Sir, this is a serious allegation on his part and I think it should be put right and put to rest once and for all.  Government has always lived within the approved borrowing ceiling, in terms of the amount issued and allotted for its development bonds.  In the same way, we have managed to live within the outstanding Treasury bond ceiling of $150 million. 

            Mr. Speaker, Sir, the revenue measure to increase VAT, will lead directly to projected increases in Government's operating surplus, which is operating revenue in excess of operating expenditures. 

            Mr. Speaker, Sir, fiscal prudence dictates that we must continue to increase operating surpluses, if we are to reduce the amount we borrow to finance our capital expenditures.  It is the only sustainable way to reduce the deficit, whilst maintaining adequate levels of capital expenditures.

            To reinforce this, Government will also manage its operating expenditures within its ability to finance it from its own revenue.  Our debt management strategies are also poised towards reducing the cost of borrowings in the longer term, by making use of opportunities for lower cost borrowings from external sources.

            Mr. Speaker, Sir, some may ask, if the Government is reducing its deficit, what about growth?  My answer to that is, the private sector has grown and is now able to take over as the major driver of economic growth.  At the same time, Government will continue to support the economy, through its expenditure policy.

            Sir, the most important question to ask therefore is: what revenue measures can we use to reduce deficit and bring debt levels down?  In answering this key question, it is very important that we keep in mind the following things:

            (a)        The chosen revenue measure must have a broad base.  This will generate the most revenue from the lowest tax rate not only now, but into the future. 

            (b)        Revenue must be easy to administer.

            (c)        It must be difficult to avoid and evade the chosen revenue measure.

            Sir, the VAT fulfils all these conditions.  It has a broad base, it is now effectively administered by the Fiji Islands Revenue and Customs Authority (FIRCA) and it is the most difficult tax to evade.

            Let me answer some questions about VAT.  More and more governments are moving away from direct taxes to indirect taxes like VAT.  Why?  Simply because indirect taxes provide a choice to income earners, whether to spend or save their income.  Income taxes, do not offer this choice.  At the same time, indirect taxes like VAT are hard to evade.

            Mr. Speaker, Sir, let me also mention here that many countries impose the same or even higher level of VAT.  The 15 per cent rate is adopted in Barbados, Mauritius, Trinidad and Tobago, Jamaica, Tonga and Samoa, to name a few.  Higher rates prevail in countries like China - 17 per cent; Chile - 19 per cent; Argentina - 21 per cent; and Denmark - 25 per cent; to name a few.

            Sir, several suggestions have been made by Members as better alternatives to the VAT increase.  Let me try to address these.

            The honourable Leader of Opposition had suggested that we look at funds that have been misappropriated or abused.  While we will not condone such abuses, I can only say that we cannot use funds that have already been spent.  At the same time, this source is only one off.  We must, however, be able to rely on a source that brings us revenue every year.  In relation to the PMS outlay suggested by the honourable Leader of the Opposition, this was in fact paid out, but in the form of COLA as ruled by the Arbitration.

            One honourable Member recommended that we collect the arrears in revenue as an alternative to VAT.  Mr. Speaker, Sir, we are trying to do this and we have given more resources to FIRCA for exactly this reason.  However, as we all know, the nature of some of these arrears are structural and will take time to collect.  Previous governments had faced the same problem in the past,  therefore, this suggestion is not realistic.

            Sir, other alternatives that were suggested, included increases in direct taxes and the imposition of capital gains tax.  These are taxes on income and investment.  Mr. Speaker, Sir, this Government firmly believes that any increase in such taxes will only be counterproductive and a disincentive to investment, productivity, and profit-oriented initiatives.  These are the main sources of employment creation and raising living standards.

            Sir, strengthening compliance is an ongoing exercise and I must say that FIRCA has done well in recent years.  Considerable increase in collections from compliance has been factored into the 2007 revenue estimates.  We are confident that FIRCA will achieve these results, especially, given the huge increases in FIRCA's 2007 operating and capital budgets.

            Mr. Speaker, Sir, having laid to rest these suggested alternative revenue measures, let me now turn to the relationship between VAT and poverty.  I believe, this is the major reason for the opposition to the 2007 Budget.

            As I have earlier said, Mr. Speaker, Sir, VAT affects everyone, irrespective of income level.  Let me emphasise that Government recognises this fully.  I had therefore announced various factors that mitigate the increase in VAT.  Let me repeat them here. 

            Mr. Speaker, Sir, exemption on basis food items still stands.  These basic food items exempted from VAT comprise:

            (a)        rice;

            (b)        flour and sharp;

            (c)        edible oil;

            (d)        tinned fish;

            (e)        powdered milk; and

            (f)         kerosene for domestic use.

            Furthermore, Mr. Speaker, Sir, there will be a VAT exemption on surcharge imposed on electricity bill for residential dwellings.  Also, the income tax threshold has been raised from $8,840 to $10,000, thus relieving an additional 10,000 workers from paying tax.  Sir, these mitigating factors will go a long way to alleviating the effect of VAT increase on the poor.

            Mr. Speaker, Sir, the opposition to VAT has made a fundamental connection between VAT and poverty.  From the preoccupation on this connection, one would be forgiven to making the conclusion that VAT fully encompasses poverty.  The impression one gets here, Mr. Speaker, Sir, is that VAT is the only answer to poverty.  Let me categorically say that reducing poverty is much wider than VAT. 

            Sir, we should, as policy makers, address this important issue in this wider context.  We should avoid condensing poverty reduction only to VAT.  The target rightly is poverty reduction and not VAT.            The appropriate question to pose is therefore; what is the most effective way to reduce poverty?  The answer to such a question should be at the centre of our discussion.  Sir, Government is addressing this question in various fronts:

            (a)        The increase in VAT has allowed us to increase the allocations to key priority sectors like health, education and social welfare.  Targeting the poor through expenditure is the most effective way to reach them.

            (b)        The Government believes not only in giving hand out to those in need, it also gives a hand up by promoting income earning opportunities to the poor.  As we know, this is the most dignified and lasting way to walk out of poverty.  There is no alternative to hard work.

            (c)        Government is promoting the development in  rural areas where most of our poor live.

            (d)        I would like to echo what some have said, that we should encourage the poor, to make full use of available resources like land and the sea for their livelihood.  It is not only VAT- free, it is also healthy.

            Mr. Speaker, Sir, we believe that the multi approach that we have taken, is a much better way to help the poor.  Just wagging the VAT flag is not only a narrow way to use the poor.  It is a very simplistic way of addressing what is a complex and important national issue.

            Sir, the 2.5 per cent points increase in VAT will surely raise Government's revenue significantly.  Sir, as a result of the increase in operating surplus, this has enabled the increase levels of budgetary provisions to priority services such as:

            (a) Education - close to $30 million;

            (b) Health - $10 million;

            (c) Social Welfare - $8.4 million; and

            (d) Law and Order - $20 million.

            The rate of 15 per cent on VAT to be effective from 1st January, 2007, is being put in place to address the effects of trade liberalisation and the possible impact on the erosion on our revenue base, especially on trade taxes.  We believe that the 15 per cent VAT, at this point, is appropriate and should not be increased in the foreseeable future.

            Sir, our commitment to the "Look North Policy" has been doubted in this august House.  Some honourable Members of this House have misled the public into believing that this would be an unfulfilled promise.  I wish to correct them that the "Look North Policy" is, perhaps, best illustrated by the new Wairiki Port in Bua.  It is projected for completion by early 2007, and will open up the vast timber forests in the North for development.  This will inject much needed economic activity in this under-developed area.  Furthermore, specific allocations to improve public utilities in the North are:

            (a) Savusavu Regional Water Supply - $2 million;

            (b) Savusavu Regional Sewerage Scheme - $2 million;

            (c) Labasa Regional Water Supply - $1 million;

            (d) Labasa Regional Sewerage Scheme - $200,000;

            (e) Construction of an international port in Balaga Bay, (which will be a part of Rural

                  and Outer Islands Project); and

            (f)  Roads construction and upgrades in Vanua Levu and Taveuni.

            Sir, these will complement the existing loan facility administered by the Fiji Development Bank (FDB), specifically targeted for Vanua Levu.  So far, 268 projects valued at $4.23 million have been assisted.  With increased Government guarantee and a more targeted focus on dairy, beef and coconut industries, the Bank will surely increase its intervention in Vanua Levu.

            Sir, Government is also pursuing the Rural and Outer Island Project with a loan from the Asian Development Bank (ADB).  This supplements Government's own infrastructural development in rural areas and outer islands, which will create and enhance market access, supporting sustainable economic and social development in these areas.  Major components, include the construction of regional and small island jetties in the maritime zones, especially, in the Lau and Lomaiviti Groups.

            The project is in the process of being finalised.  The $2 million allocated in the 2007 Budget is mainly for the preliminary works that precede full implementation.  These involve engaging a project management team, finalising project design, pre-qualification and tendering processes.

            Law and Order: Mr. Speaker, Sir, much of the criticism from the other side of the House has been on corruption and good governance. We have always maintained that accusations should be backed by evidence.  Further, it is our civic duty to report offenders to authorities without delay.  We have constitutional institutions to investigate and prosecute offenders and Government has full confidence in the Fiji Police Force and the Director of Public Prosecutions Office in this regard.

            Moreover, the establishment of the Financial Intelligence Unit (FIU) within the Reserve Bank of Fiji (RBF), is assisting the Fiji Police Force in investigating white collar crime and monitoring laundering activities.  Government is fully aware of the condition of our penal institution and has, therefore, maintained provisions made for cell block upgrades, prisons and institutional upgrades in this area.

            Sir, some misguided individuals have seen fit to begrudge our honourable Prime Minister and Minister for Sugar Reforms of his entitlement to a suitable residence appropriate for his high office.  Sir, other countries have a designated residence for the leader of Government.  Any right minded individual would agree, that it is far better in the interest of the nation to develop this asset which will remain with the State, rather than upgrading a private residence.

            Some honourable Members of the Opposition have raised the issue of consultation in the formulation of the Annual Budget.  It entails an extensive consultation process comprising the RBF, FIRCA, private sector organisations, civil societies, NGOs and the entire Government machinery itself.  All these stakeholders are invited for Budget submissions, following which the process of consultations and evaluation take its course.

            Sir, the FLP Ministers are also represented in the Cabinet Sub-Committee on the Budget (CSB), including one honourable independent Minister.  Sir, the CSB has interactively engaged Cabinet right throughout the Budget preparation process. 

            Mr. Speaker, Sir, questions were raised on the revenue measures, specifically the increase in VAT, and the perceived lack of consultations in that regard.  Sir, this is an issue that requires urgent clarification and I am grateful to the honourable Prime Minister for having done that this morning.  In all governments, it is a fully accepted practice that in the annual Budgets, revenue measures are set with all confidentiality, given the sensitivity of any information regarding possible changes in tax rates.

            Government's development agenda is driven by the goals and objectives contained in the National Strategic Development Plan for 2007 to 2011.  As has been mentioned on numerous occasions, the Plan was formulated and adopted after an extensive stakeholder consultation at the National Economic Summit in September this year.  Again, this demonstrates the consultative and partnership driven approach to nation building.

            The new Financial Management Information System (FMIS) will enable Government to proactively monitor expenditure performance for the whole of Government.  At the same time, it will empower the Ministry of Finance to effectively impose control as and when infringements are detected.  Disciplinary measures such as surcharges should follow suit.

             A strengthened Internal Audit machinery will reinforce the work currently being done to address the issues raised in the Auditor-General's Report.  Since 2003, out of a total of 104 financial infringements reported in the Auditor-General's Report, 41 cases have been successfully dealt with, 21 are currently being dealt with and 43 are still outstanding. 

            Sir, as I had mentioned in my Budget Address, Government will be introducing Performance-Based Budgeting in 2008.  This new budgeting system will make the Civil Service more accountable for their performance.  The performance of the service will be assessed on the basis of their delivery of budgeted outputs. 

            Sir, quite interestingly, on the issue of good governance, some self-appointed guardians have chosen to remain silent at such time when the fundamental issue of governing is under threat.  The deafening silence either proves consent or guilty by omission.

            Mr. Speaker, Sir, much has been said about Government's reform programmes, however, detractors focussed their comments on the Civil Service Reforms and honourable Members are aware that there are two other reform programmes that are progressing - the Financial Management and Public Enterprises Reforms.

            With regard to the Civil Service Reform, I appreciate the assurance of the honourable Minister for Labour and Industrial Relations for reviving the dormant Tripartite Forum.  This will enable Government to design an effective industrial relations framework that will allow swift resolution of trade disputes and grievances.  Sir, Government is already honouring the Partnership Agreement with the unions by settling dues owed to civil servants.

            A roadmap is currently being prepared to manage the Civil Service Reform.  As this involves the input of relevant stakeholders, and is currently in discussion, potential measures therein cannot be divulged at this time.  What is important is that, the stakeholders are involved in regular and formal discussions to resolve this issue.  Sir, I cannot over-emphasise the commitment of Government to move these reforms further and I think this was also been stressed by the honourable Prime Minister this morning.

            Mr. Speaker, Sir, Government has created the environment and clarified the roles that we all have to play to take our country forward.  We realise that we cannot do this alone, hence our Budget theme - "Partnership for Sustained Growth".  Fiji is at the crossroads of its development.  The opportunity for peace and prosperity beckons us forward.  The path we must take is abundantly clear.  Our choice and its fulfilment is our collective responsibility.  Partnership implies team work and tolerance.  We must look beyond our minor differences to the collective welfare of our nation.

            Mr. Speaker, Sir, let us embrace the opportunity that is presenting itself now.  Let us move ahead as a united country.  Together we are stronger.  Together we can overcome and prevail upon the challenges that confront us as we strive to develop our country and raise the living standards of our people.

            Mr. Speaker, Sir, I commend the Bill to the House.

            Question put.

            MR. SPEAKER.- Honourable Members, we will now call for a division.

DIVISION

            Noes:

            1.         Hon. Member for Labasa Rural Communal (M. Tahir)

            2.         Hon. Member for Macuata East Open (A.D. Singh)

            3.         Hon. Member for Labasa Communal (K. Reddy)

            4.         Hon. Member for Nadroga Open (M. Rakuro)

            5.         Hon. Member for Samabula/Tamavua Open (M. Raghwan)

            6.         Hon. Member for Ba West Communal (N.K. Padarath)

            7.         Hon. Member for Ba East Communal (J. Kumar)

            8.         Hon. Member for Nasinu/Rewa Open (A. Hussein)

            9.         Hon. Member for Lautoka City Communal (J. Gawander)      

            10.       Hon. Member for Macuata East/Cakaudrove Communal (V. Chand)

            11.       Hon. Member for Laucala Communal (D. Chand)

            12.       Hon. Member for Vuda Open (F. Anthony)

            13.       Hon. Member for Tavua Open (D. Nair)

            14.       Hon. Member for Nadi Rural Communal (P. Mupnar)

            15.       Hon. Member for Vuda Communal (V.D. Sharma)

            16.       Hon. Member for Lautoka City Open (D.U. Manufolau)

            17.       Hon. Member for Vanua Levu West Communal (S. Lal)

            18.       Hon. Member for Tavua Communal (A. Babla)

            19.       Hon. Member for Ba Open (M.P. Chaudhry)

             20.      Hon. Member for Nadi Open (A. Ali)

            21.       Hon. Member for Viti Levu East/Maritime Communal (S.C.Maharaj)

            22.       Hon. Member for Magodro Open (G. Singh)

            23.       Hon. Minister for Local Government and Urban Development (C. Lakshman)

            24.       Hon. Minister for Employment Opportunities and Productivity (R. Nand)

            25.       Hon. Minister for Primary and Preventative Health Services (U. Narayan)

            26.       Hon. Minister for Energy and Mineral Resources (L.R. Vayeshnoi)

            Ayes:

            1.         Hon. Member for Suva City Communal (B.L. Rounds-Ganilau)

            2.         Hon. Member for Western/Central Communal (M.M. Beddoes)

            3.         Hon. Member for Suva City Open (M. Weleilakeba)

            4.         Hon. Member for Tamavua/Laucala Communal (Roko J. Waqairatu)

            5.         Hon. Member for Cakaudrove West Open  (Ratu O. Vakalalabure)     

            6.         Hon. Member for Nadroga/Navosa Provincial Communal (Ratu I. Tasere)

            7.         Hon. Member for Lami Open (M.T. Samisoni)

            8.         Hon. Member for Cakaudrove West Provincial Communal (N. Nawaikula)

            9.         Hon. Member for Nausori/Naitasiri Open (A. Masilaca)

            10.       Hon. Member for Cunningham Open (R. Singh)

            11.       Hon. Member for North/East Communal (N.V.K. Nagusuca)

            12.       Hon. Member for Lomaiviti Provincial Communal (S. Kaitani)

            13.       Hon. Member for Bua Provincial Communal (M. Bulanauca)

            14.       Hon. Member for North West Urban Communal (J.N. Banuve)

            15.       Hon. Member for Tailevu South Provincial Communal (I.U. Matairavula)

            16.       Hon. Member for Suva City Urban Communal (M.V. Ragigia)

            17.       Hon. Member for Kadavu Provincial Communal (K.T. Yabaki)

            18.       Hon. Minister of State for Small Micro-Enterprises (P. Tabaiwalu)

            19.      Hon. Minister of State for Education (Technical and Vocation and Special Education (P. Ralulu)

            20.       Hon. Minister of State for National Planning (J. Navakamocea)

            21.       Hon. Minister of State for Prisons and Corrections Services (Lt. Col. I.

                        Luveni)

            22.      Hon. Minister of State for Immigration and Ex-Servicemen  (Major-General J. Konrote)

            23.      Hon. Minister of State for Agriculture (Alternative Livelihood and Outer Island

                        Development) (Ratu J.N. Dimuri)

            24.       Hon. Minister of State in the Prime Minister's Office (L.T. Salabula)

            25.       Hon. Minister of State for Fijian Affairs (Ratu S. Matanitobua)

            26.       Hon. Minister of State for Public Utilities (S. Tikoinasau)

            27.       Hon. Minister of State for Provincial Development (T. Young)

            28.       Hon. Minister of State for Housing (Adi A. Caucau)

            29.       Hon. Minister for Public Utilities and Infrastructure Development (R. Irwin)

            30.       Hon. Minister for Multi-Ethnic Affairs and National Reconciliation and Unity

                        (Ratu M.Q. Saukuru)

            31.       Hon. Minister for Women, Social Welfare and Housing (G.S. Raj)

            32.       Hon. Minister for Information & Communications (I. Leweniqila)

            33.       Hon. Minister for Public Enterprises and Public Sector Reform

                        (Col. Ratu S.U. Draunidalo)

            34.       Hon. Minister for Home Affairs and Immigration  (J.B. Vosanibola)

            35.       Hon. Minister for Fisheries and Forests (I.B. Tuisese)

            36.       Hon. Minister for Fijian Affairs, Lands and Provincial Development

                        (Ratu N.T. Lalabalavu)

            37.       Hon. Minister for Tourism and Transport (T. Vuetilovoni)

            38.       Hon. Minister for Education, Youth and Sports (Ro T.V. Kepa) 

            39.       Hon. Minister for Finance & National Planning (Ratu J.Y. Kubuabola)

            40.       Hon. Prime Minister and Minister for Sugar and Investment  (L. Qarase)

            Absent:

            1.         Hon. Minister for Commerce and Industry (S. Qoro)

            2.         Hon. Minister for Agriculture (G. Nand)

            3.         Hon. Minister for Curative Health Services (Dr. G. Gounder)

            4.         Hon. Minister for Labour and Industrial Relations (K. Datt)

            5.         Hon. Minister for Environment (P.W. Bune)

            MR. SPEAKER.- Honourable Members, this is the result of the count:

            Ayes                  :  40

            Noes                  :  26

            Total Votes Cast : 66

            Absent                :   5

            Total                   : 71

            Motion agreed to. 

            MR. SPEAKER.- Honourable Members, the Second Reading of the Appropriation Bill has gone through the House. 

            Honourable Members, if I may explain, it was very clear, from where I sit and heard, there was supposed to be a division.  However, as a presiding officer, and dealing with a very important Bill, one would need to indicate very clearly where you stand in this House today.  I am thankful that you have exercised that, and we have known the result.  

            Before we go into Committee of Supply, let me briefly inform the House of the procedures that we intend to take, pursuant to Standing Order 85, for the information of Members who may not be aware of the procedures. 

            Firstly, when the House goes into Committee, the mace will be placed at the bottom bracket.  The Chair will order the Secretary-General to call each Head of the Estimates in turn, commencing with Head 1, where upon debate may take place on any matter relating to each Head.  If there is no debate, the Secretary-General will move on to the next Head.  The debate if any, should be confined to the Head, Sub-Head or item referred to.  Any debate must be relevant, concise and not repetitious.  Please honourable Members, do not use the Committee stage as an excuse for a second debate.  There are 51 Heads that the House needs to go through in two days, I will be vigilant and will order a speaker to cease speaking, if I feel that the rules in the Committee stage are being breached.  Lastly, honourable Members, the Chair will be referred to as, "Mr. Chairman" and not "Mr. Speaker".  Honourable Members, I ask for your co-operation. 

            In Committee:

            MR. CHAIRMAN.- Honourable Members, before I ask the Secretary General to proceed, I would request the honourable Minister for Finance, to give us some explanation before we proceed with those various items. 

            HON. RATU J.Y. KUBUABOLA.- Mr. Chairman, allow me to clarify some pertinent factors that underlie the information contained in the 2007 Budget Estimates.

            First of all, I refer to page seven of the Budget Estimates, which contains the Notes explaining the various factors that will help in one's reading and understanding of the Estimates.

            Mr. Chairman, Sir, contained therein are 11 important points that the Committee must note.  In addition to those 11 points, I wish to make further elaboration on some of the features of the Estimates and changes that have been made.

            Mr. Chairman, Sir, in terms of Head numbering, one will note that there have been some changes to the expenditure Heads in the 2007 Estimates, from the 2006 Estimates.  This is to reflect the new ministerial appointments.  The changes relate to the following:

            (a)       Head 25 is the Ministry of Employment Opportunities and Productivity.  Head 25 in the 2006 Estimates was the Ministry of Youth and Sports.

            (b)       Head 31 is the Ministry of Environment.  Head 31 in the 2006 Estimates was the Ministry of Tourism, which is now Head 40.

            (c)       Head 33 is the Ministry of Energy and Mineral Resources.  In the 2006 Estimates, Head 33 is the Ministry of Lands and Mineral Resources.

            These changes have also been factored into the new Financial Management Information System (FMIS).

            Mr. Chairman, Sir, on staff numbers, one will note that below the Standard Expenditure Group Summary (SEG) of each ministry, we have shown the budgeted established posts and budgeted Government wage earners or unestablished staff for 2006 and 2007 respectively. 

            The budgeted staff numbers has increased by 1,419 from the 2006 levels, due to the absorption of 1,344 grant-in-aid teachers, as part of Government's commitment and the creation of 66 new positions.  Of this, 36 are for new staff nurse positions and the balance is spread out with the following agencies; Immigration, Auditor General, Ministry of Environment, Legislature, Elections, Foreign Affairs, Judiciary and Prisons.  Other increases relate to the funding of unfounded posts.  Therefore, an increase in staffing levels in the 2007 Budget from the 2006 levels may indicate either:

            (a)        the creation of new positions; or

            (b)        an increase in the number of budgeted posts.

            Mr. Chairman, Sir, the allocation for Personal Emoluments and Wages for majority of the ministries, is based on the actual expenditure as of August, and projected to the end of the year. This implies that personnel on the ground as at August, have been budgeted for and provisions for 2007 would therefore, exclude the funding of vacant positions as at the end of August.  Reductions to SEGs one and two therefore, imply that there are vacancies in the Ministry concerned.  It should also be noted that where there are genuine shortfalls, this will be covered from Miscellaneous Vote, which is Head 50.

            Full provisions have been provided for priority sectors of Education, Health, Law and Order - Police, Military, Director of Public Prosecutions (DPP) and Judiciary.  For these agencies, funding have been provided, based on the person to post or the 2006 funding levels increased by the percentage incremental payments.

            An increase in the funding allocation for SEGs one and two, without any corresponding increase in staffing levels is the result of the payment of salary increments due to the Partnership Agreement Framework, reached between the unions and Government.  These payments include the three per cent Cost of Living Adjustments (COLA) for 2004 and 2005 paid out in December 2005, and February 2006 respectively, the payment of Awards 52-57 in June this year, and the payment of two per cent in lieu of PMS/Merit payment for 2004 which was paid out in August.

            For the Disciplined Forces, the increase also reflects the implementation of the Job Evaluation Exercise recommendation.

            Mr. Chairman, Sir, for 2007, the provision for vehicles has been increased to $1.5 million, in view of the need to improve service delivery, particularly in the rural areas.  While $560,000 has been allocated directly to ministries budget, another $1 million is provided in Head 50 and will be allocated based on the assessment of the priority needs of ministries.

            Mr. Chairman, Sir, Appendix 3 on page 353 of the Estimates, lists out the Responsible Authorities for the various expenditure Heads, as denoted under Section 7 of the Financial Management Act of 2004.  Responsible authorities are simply the Chief Accounting Officers in the old Finance Act, and refer to persons responsible for managing the financial affairs of the entity.

            Sir, honourable Members will note that as part of the amendment circulated earlier, changes have been made to some of these Responsible Authorities.  These changes are in line with Section 80 of the Financial Management Act and relate to the following ministries:

            -         Head 5 - Ministry of Fijian Affairs, Culture and Heritage, Lands and Provincial Development, Chief Executive Officer (CEO) Fijian Affairs and Provincial Development is now responsible for Programmes 1 to 4, and CEO Lands for Programmes 4 and 5.

            -          Head 25 - Ministry of Employment Opportunities and Productivity, since there is currently no CEO for this Ministry, the narrative has been amended to reflect this, that is the "CEO of the Ministry or the person assuming the responsibility of the CEO".

            -          Head 33 - Ministry of Energy and Mineral Resources, Director of Energy is responsible for Programme 1 and Director Mineral Resources for Programme 2;

            -           Head 21 - Ministry of Education, Youth and Sports, the CEO Education is responsible for Programmes 1 to 9 and CEO Youth and Sports for Programme Y and S.

            Mr. Chairman, Sir, the use of the Programme Y and S, as opposed to Programmes 10 and 11 respectively, is due to