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Saturday, April 07, 2007

A short term measure : Can we look at containing imports

Much has been said about the need to increase exports to help improve Fiji's trade balance position. However, we all know that getting into exports takes a while to set up with time spent on establishing a business, meeting all FTIB and Government-set requirements, setting up your product and getting it ready for exports, looking for markets and contacts, checking out the shipping and airline routes, availability and costs and then having your first consignment ready for exports.

Why don't we look at the import side and try to improve/reduce that side of the trade account? There are a lot of things that can be done to reduce imports.

My suggestions here relate to trying to reduce the import of fuel oils which formed 51% of the total imports in 2006. (Refer to Bureau of Statistics data here.) Some actions that can be done include :
  • looking for and encouraging the use of alternative energy in place of fuel and diesel oils and petrol;
  • residential property owners should be encouraged to complement their energy needs with solar energy derived from solar panels. The purchase of these solar panels should have a tax rebate or be tax free to encourage their use;
  • large vehicles (usually called gas guzzlers) such as four-wheel drives should have a prohibitive gas guzzler tax to discourage their purchase and ownership. They should also attract an environment tax given that they emit a higher proportion of gases and carbon which damage the atmosphere and ozone layer;
  • all properties (business or residential) should have an energy audit with a view to encouraging efficiency in use of energy;
  • energy saver fixtures and light fittings should be sold tax free to encourage their use widely in business and residential properties;
  • tax concessions should be given to businesses that will engage in the research of alternative fuels and energy;
  • controlling the number of vehicles on the roads with a limit on vehicles licensed each year;
  • stopping the import of second hand vehicles from overseas which have more fuel consumption for the same mileage as other new vehicles;
  • the set up of alternative energy structures (e.g. windmills) by the Fiji Electricity Authority be speeded up.

I suggest also that Government and the authorities have a good review of all imports and weed out or impose a higher tax on those that are considered unnecessary e.g. fruits and vegetables that can be sourced locally.

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