Get The Truth – Inflation
From December 2006 to December 2013, the consumer price index rose by 44%. This means that the basket of food and other items a family consumed cost 44% more than in 2006.
Why did it rise?
• World Crude oil prices have risen almost 68% since the end of 2006
• The international food index FAO has risen by 79%
• NZ dairy price index (we source most of our dairy products from NZ) has increased by 109% in Fijian dollar terms
• Australian Wheat prices have risen by 105% in Fijian dollar terms (we source our wheat from Australia)
• The Fijian dollar was devalued by 20%
Therefore, the rise in inflation is driven more by external factors rather than domestic policies. Most of the basic food items we eat are imported from overseas, we do not have any control of prices for these items. However, it is important to note that we put in a number of measures to help cope with the rise in inflation, in particular food prices by:
• Increasing the income tax threshold by almost 90% from $8400 in 2006 to $16000 in 2013.
• Reducing the PAYE tax rate
• Free school fees.
• Free bus fares.
• Continuation of ZERO rating vat for basic food items (Tinned Fish, Flour & Sharps, Edible Oil, Rice, Tea, Powdered Milk).
• Continuation of ZERO rating vat for Medicines.
• Reduce maximum duty on food from 27% to 5% and for certain basic food items to zero.
• Improved price control for Basic Food items and Fuel.
• Food vouchers.
• Pension scheme.
• Increased the minimum wages as well as raised wages in the public sector.