Fiji's Budget Squeezed by Wages, Cabinet Costs, Ex-Minister Says

Fiji's public finances face significant pressure due to an expansion of ministerial positions and associated costs, according to former Finance Minister Aiyaz Sayed-Khaiyum. He argued that the current government structure, which includes a large number of ministers and assistant ministers from coalition partners, has led to increased spending on salaries, vehicles, staff, travel, and administration.

Sayed-Khaiyum detailed how this shift in government spending has undermined fiscal stability. He estimated Fiji's fiscal deficit has surpassed six percent, with total government spending rising from approximately $3.7 billion in 2022 to $4.8 billion. More concerning, he noted, is the composition of this spending, where operating costs now dominate the budget. Roughly $3.9 billion is allocated to wages, administration, and overheads, leaving insufficient funds for capital investment essential for long-term economic growth.

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When you have an entire political party, the largest political party, having every single member of its parliament being made ministers and assistant ministers, you tend to worry.

The former minister also pointed to a growing public sector workforce, with civil service numbers increasing from around 34,000 in 2022 to approximately 38,000. This has driven wage expenditure up from about $1 billion to $1.3 billion. When statutory bodies are included, the public payroll could approach 42,000 employees, further constricting fiscal space and budget flexibility.

Sayed-Khaiyum warned that the imbalance between operating and capital expenditure has serious long-term consequences. Insufficient investment in infrastructure and productive sectors weakens the economy's capacity for sustainable growth. He also questioned tax policies that grant holidays to large foreign companies while small and medium-sized enterprises struggle with rising costs and limited support.

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It’s about all the ancillary stuff that comes along with it. The cars, the permanent secretaries, the secretaries, the travel expenses, etc. The second thing, of course, is that was increased when it was not required to be increased.