Securing Peace, Progress & Prosperity for the people of Fiji
19-Nov-2008

‘The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge & controversy’ - Dr Martin Luther King Jr
 


Employment Creation:

Perhaps the single most important task aside from assuring a political resolution to the current political crisis, is the creation of new employment opportunities for our people. No other industry in Fiji offers the greatest potential for economic recovery than our tourism industry and we propose the following as a first step.

Tourism:

The greatest obstacle to our industry’s growth are the travel advisories and the downturn created by the events of December 2006 and all of the subsequent negative publicity created by the actions of the Junta since then.

While market share has been retained, the customers who provide yield have declined, and heavy discounting has brought in tourists who don’t spend, so revenues have been affected and cash flow problems have prevailed.

In conjunction with a political solution, and the removal of travel sanctions we recommend that the tourism industry be granted a $100 million marketing budget for the 5years from 2009 to 2013 to enable it to intensify its marketing activities and recapture the market share lost as a result of the 2006 events.

In addition we propose that they be permitted to utilize in advance some of the agreed total marketing budget, so if they want to embark on an intense marketing campaign initially, then taper off in year 3, 4 and 5, then they can use more than the $20 million annually to be allocated, and adjust downward the remaining years marketing dollars in order to stay within the $100 million for the 5 years.

In exchange for this undertaking, we propose 2 conditions that the tourism industry must collectively sign off on and these are:-

1. They must create 5,000 new jobs based on the new minimum rate proposed by year 5
2. They must progressively redirect 50 per cent the current $153.9 million value in vegetable imports annually to local producers.

By entering into such an arrangement, we will be creating 5,000 new jobs in the tourism industry at the proposed minimum rate of pay, increase working hours for all part-time staff, as well as a create a further 2,949 new jobs in the agriculture sector to cater for the shift from international to local purchase of vegetables for the tourism industry. The vegetable purchase will amount to $77 million by year 5.

The table on the left summarises the benefits that such an arrangement would create.
The FVB currently has a annual marketing budget of $12 million, so the deal we propose will require a top up of $8 million or $40 million additional cost over 5 years. The progressive purchase from local suppliers will create a new $76 million vegetable industry and with it 2,949 new jobs. This proposal is a sound investment and a sure way to create 7,949 new jobs over 5 years.

6.4 National Apprenticeship Scheme:

With the estimated 16,000 school leavers annually and only 8,000 jobs available to absorb them into the workforce, we believe that the establishment of a National Apprenticeship Scheme that can help introduce at least 8,000 students into the workforce annually will make a significant difference to the lives of our young people.

The idea behind this is to get our young school leavers off the streets and into the work environment. Employers who recruit apprentices can be given tax credits at the end of each year that the apprentice is engaged. At the end of the contract period of say 3 years, if the employer proceeds to engage the apprentice on a full-time basis, then the employer receives a further bonus tax credit.

It is our recommendation that apprentices be paid an annual salary of $4,680 or 60 per cent of the proposed minimum wage for the duration of the engagement. Based on the number of apprentices that a firm hires there will be tax credits offered as an incentive.
For Example: When applying the tax credit to the cost of an apprentice, the employers net cost for recruiting an apprentice and future prospective employee ranges from $380 to $1560 per annum.
To absorb 8,000 students annually into the National Apprentice Scheme the cost to government by way of tax credits based on the maximum value of tax credits will be approximately $34.4 million per annum.
Obviously such a scheme can be subject to abuse, therefore strict parameters will need to be worked out that cover such things as the longest period of engagement of an apprentice and other related safeguards.
The table below outlines the value of credits given and the more apprentices hired, the greater the tax credits.



This is ousted opposition leader Mick Beddoes’ alternative charter. Some minor editing have been done in accordance with the Fiji Daily Post’s editorial policies. The views expressed here are the author’s and not of the Fiji Daily Post.


MICK BEDDOES