The Fijian government will increase the retirement age from 60 to 62 years for specialised expert positions requiring scarce skills across the civil service. This is the second time in 15 months that its coalition government has changed the retirement age. Previously, the government had increased it from 55 to 60 years for all civil servants and government employees.
This is just one of the Fijian government’s policies aimed at addressing the challenge of its so-called ‘labour exodus’ to Australia and New Zealand. Fiji’s Deputy Prime Minister and Minister of Finance, Professor Biman Prasad, recently highlighted that ‘when you look at the statistics, people are leaving all the time for education, for migration, for employment … now the government has recognised this is a problem’. Over 50,000 Fijians emigrated between July 2022 and December 2023. This raises questions about the reasons behind this unprecedented emigration and the government’s response.
According to Fiji’s Permanent Secretary of the Ministry of Finance Shiri Gounder, the recent increase in Fijian emigration has been caused by overseas employment opportunities and individuals obtaining student visas abroad. During the peak of the COVID-19 pandemic, there were additional labour demands in Australia and New Zealand. The Australian government removed work restrictions for student visas to help address this issue.
30,263 Fijians were enrolled in vocational education and training programs in Australia between June and December 2023, a stark rise from the 8356 enrolments during the same period in 2022. This alone accounts for around 60 per cent of total Fijian emigrants.
A similar ‘pull’ of Fijian workers happened in New Zealand, where the Fijian population increased from 13,470 in December 2022 to 22,599 in December 2023. Work visas doubled from 4827 to 9864 and dependent visas increased more than eight-fold, from 318 to 2625.
Some argue that this rise in emigration is partly due to Prime Minister Sitiveni Rabuka’s reputation for promoting a strong social agenda for iTaukei — the major indigenous group in Fiji. This argument is not clear. Since the coalition government took office, individuals who were previously banned, deported or forced to leave Fiji for criticising the former government have been allowed to return and many are doing so.
Emigration delivers large benefits to workers themselves and to the economy as a whole through remittances, but it presents challenges in local labour markets. Pressure on local labour markets caused by the recent surge of emigration has pushed formal-sector wages up as companies struggle to maintain their workforces. To preserve the benefits and manage the costs of a more mobile population, the government has responded with several major policy changes.
The government has increased the retirement age to help fill the gap created by younger people leaving for work abroad. Fiji is bringing in more foreign workers to counter immediate shortages in skilled areas and to support agricultural industries, which have long struggled to attract local workers. The government has also removed investment and visa barriers for former citizens, better enabling them to reinvest their finances, newly acquired skills and knowledge in Fiji.
While the government did not increase personal income tax in its last budget, it did increase indirect taxes to help cushion any adverse budgetary impacts of the emigration surge. These measures, coupled with the reinstatement of the 48-hour limit on work per fortnight for international students in Australia should go some way towards alleviating the problem. It also represents a far better solution than limiting citizens’ opportunities abroad.
In addition to these policies, the Fijian government could consider reducing tariffs on imported machinery and equipment in an effort to signal that Fiji is an investment-friendly destination. In the long run, more investment in technical, vocational and enterprise education and training programs in Fiji will be necessary. While these skills are sought in neighbouring developed countries, the process of acquiring them adds to Fiji’s human capital stock and lifts its average labor quality, which could potentially be better retained through its education bond service.
The Fijian government could also work with neighbouring countries receiving labour influxes to focus recruitment on the countryside rather than cities and to support diasporic projects coming back to Fiji. These solutions could together help achieve amicable development outcomes in the Pacific vuvale (family).
Ryan Edwards is Deputy Director of the Development Policy Centre, The Australian National University.
Toan Nguyen is Research Fellow at the Development Policy Centre, The Australian National University, and lecturer at the School of Business and Public Policy, The University of Papua New Guinea.
Kushneel Prakash is Melbourne Postdoctoral Fellow at the Melbourne Institute: Applied Economic and Social Research, The University of Melbourne.
This article draws on research that was supported by the Pacific Research Program, with funding from the Department of Foreign Affairs and Trade. The views represent those of the authors only.