FHTA warns of fiscal imbalance risks

Fiji's economy faces risks from an over-reliance on the tourism sector to meet its fiscal needs, according to the Fiji Hotel and Tourism Association (FHTA). The association emphasizes that while the industry is a significant contributor, essential structural reforms across other sectors are lagging, creating an imbalance.

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Responsible budgeting must also strengthen the systems that keep the economy moving and refrain from knee-jerk reactions to every crisis or perceived crisis that comes our way.

Speaking at the National Budget Forum, FHTA Chief Executive Officer Fantasha Lockington stated that the tourism industry supports fiscal discipline but cautioned against placing the entire burden on one sector. She noted that productivity reforms, infrastructure development, and cost-efficiency measures continue to advance at a slow pace, despite tourism's substantial contributions through foreign exchange, employment, and taxes.

Lockington stressed the need for balanced growth across all economic sectors. She warned that Fiji must be prepared for potential downturns in tourism, advocating for sustained competitiveness, access to skilled labor, robust infrastructure, energy security, and efficient regulations. "Responsible budgeting must also strengthen the systems that keep the economy moving and refrain from knee-jerk reactions to every crisis or perceived crisis that comes our way," she advised.

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The new 5% tourism services tax is the most difficult thing the industry is trying to wrap its head around.

The FHTA also voiced concerns regarding the implementation of a new 5% tourism services tax, fearing it could create compliance challenges for businesses. Furthermore, the association questioned the equity of allocating tourism revenue to support Fiji Airways, suggesting the financial responsibility should be more broadly distributed. Lockington called for greater policy certainty, enhanced consultation, and accelerated progress on reforms to maintain Fiji's global competitiveness as a tourist destination.

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We fully agree there has never been any doubt the national airline must be supported. There is no question around that, and we have put forward some recommendations in formal minute meetings. We would never recommend a tax that is complicated to apply. Take it from me, we would not. The revenue is intended to support Fiji.