Economist calls for budget cost relief

University of the South Pacific economics lecturer Dr. Nilesh Chand is urging the government to prioritize measures that reduce cost-of-living pressures, strengthen essential services, and support economic recovery in the upcoming 2026–2027 National Budget. He emphasizes that the budget must provide direct relief for households and businesses grappling with rising costs, particularly those linked to fuel, electricity, and general inflation.

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the upcoming budget must provide direct relief for households and businesses struggling with rising costs linked to fuel, electricity and inflation.

One of Dr. Chand's primary recommendations is a reduction in the Value Added Tax (VAT) rate from the current 12.5 percent to 9 percent. He believes this change would offer immediate and tangible relief for consumers. Additionally, he suggests a stronger focus on price monitoring and enforcement to ensure consumer protection, alongside regular retail inspections.

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One of his key recommendations is reducing the Value Added Tax rate from 12.5 percent to 9 percent, which he says would provide immediate relief for consumers.

The economist also highlighted the need to bolster support for small and medium-sized enterprises (SMEs). This includes improving the ease of doing business and providing assistance to market vendors who are facing increasing operational costs. Dr. Chand suggests a review of factors affecting businesses, such as interest rates, to ensure they are set at favorable levels.

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Also, a consultation should be focused more on price monitoring, enforcement in terms of consumer protection and these retail inspections.

Furthermore, Dr. Chand is advocating for more robust consumer protection measures. This encompasses better price monitoring systems and targeted assistance programs designed for vulnerable households. He views the 2026–2027 National Budget as a critical opportunity for the government to address immediate financial pressures while simultaneously laying the groundwork for sustainable economic growth.

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I think they need to rethink some of the things that are affecting business in terms of the interest rate. I’m not saying it’s high or low, but they should be able to gauge themselves and then try to set a good, favourable rate.