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The Finance Ministry says Fiji may need to fundamentally rethink government spending priorities, including the size and structure of the public sector, as operating costs continue to consume a significant share of the national budget.
Permanent Secretary for Finance Shiri Goundar says the 2026–2027 Budget signals a move towards stronger fiscal discipline and increased investment in development projects. However, he warns deeper structural decisions may be needed if spending pressures continue.
Speaking at a post-budget forum, Goundar says there is growing recognition that government expenditure has expanded significantly over the years, with operating costs now taking up a large portion of total spending.
He says total expenditure has been maintained at around $4.8 billion in the latest budget, including a deliberate effort to control spending growth despite it being an election year.
However, Goundar says any further reductions in future budgets will require a “serious national discussion” on the size, efficiency, and performance of the public service.
He adds that about 42 per cent of the budget is allocated to the social sector, including education, health, welfare support, and other assistance programmes.
While acknowledging the importance of these services, Goundar says the high level of social spending limits the government’s ability to significantly increase investment in infrastructure.
He says wages and operational costs account for about $2.3 billion of total expenditure, raising questions about productivity and efficiency across the public sector.
“We cannot continue increasing operating expenditure and expect to build the level of infrastructure the country needs; that future growth must come from stronger productivity and better prioritisation.”
Goundar says the latest budget reflects a shift towards capital development, with major investments planned for health infrastructure, wastewater systems, bridges, ports, and renewable energy.
These include a $500 million health sector programme, upgrades to primary healthcare facilities, expanded hospital capacity, and major energy and water projects aimed at supporting long-term economic growth.
He says the government recognizes that its ability to directly drive economic growth is limited, and that future expansion must be led by the private sector, supported by better infrastructure and an enabling business environment.
Goundar acknowledges that the budget was prepared amid global uncertainty, domestic fiscal pressures, and a structural funding gap where current revenues are not enough to fully meet spending requirements.
Despite these challenges, he says the government has maintained overall tax stability, controlled expenditure growth, and redirected resources towards capital investment.
Goundar says the challenge ahead is not only balancing the budget but restructuring government spending to achieve long-term sustainability, stronger productivity, and economic growth.
