The level of domestic debt is manageable and can support funding the budget deficit, says Fiji Labour Party leader Mahendra Chaudhry.

However, the former prime minister says the FLP strongly advises the nominal amount of foreign debt is reduced by ensuring that debt repayments supersede new foreign loans.

“This is not the time for austerity,” he said.

“To increase civil service pays in line with inflation and for much needed capital investment, the Budget will need to incur a deficit of about 6% of the GDP.

“The Coalition has failed to adequately invest in essential infrastructure such as health, water and roads – necessary to stimulate the economy.”

Mr Chaudhry said in terms of revenue measures the Coalition “must not recklessly attempt to raise revenue without considering its detrimental impact on the lives of our people as it did by raising VAT to 15%.”

“It must seek sustainable ways to raise revenue and allocate funds for capital expenditure.

“An increase in the Capital Gains Tax and Stamp duty, and the reintroduction of the Service Turnover Tax should be considered.

“Trade taxes could also be increased on non-essential food items linked to diabetes;

“It should also consider increasing rates of personal tax for those on higher salaries through a progressive income tax structure and for a dividends tax aligned to income.”