can grow into medium and big businesses. many of our large companies like tappoos and motibhais started from very humble beginnings. this brings hope to everyone. the key is hard work, perseverance and prudence. when these small businesses grow they can look at the export market and also add to investment. small businesses can directly help in import substitution. we can use more of our natural resources to fulfil our basic needs. they are not only cheap they are healthy. constraints let me pose this question : what are the constraints to starting and operating small businesses? some of the more common answers are difficult access to finance, lack of skills and lack of access to markets. on finance, i am glad that the fiji development bank is putting its money where its mouth is. the national centre for small and micro enterprise development is also a financing option. the reserve bank is currently examining ways that can facilitate access to financing for small businesses. still on this issue of finance, we have been amazed at the increase in personal remittances from abroad which have provided us with much needed foreign exchange. one of the issues that we are encouraging is for us to spend these remittances in a more useful manner. one of the best ways of doing this is to use these remittances to start small businesses. the benefits will last for a long time. the reserve bank is also looking at ways in which we can help facilitate this. we are also talking with commercial banks on how we can work together to help small businesses. one of the issues that i am hopeful that we can collaborate on is the provision of training on how to plan and successfully run small businesses. debt the national budget was voted on in the house yesterday. let me say a few things on this topical issue. another of our major challenges is to reduce our rising debt level. i am encouraged that the government has addressed this challenge in the 2007 budget. it has made the commitment to lower the fiscal deficit to 2 percent of gdp in 2007 and to maintain this level over the next five years. this is expected to bring government debt back down to 45 percent of gdp by 2011. the other aspect of the budget that was encouraging is the implementation of the government ’ s policy support program. it will be important that this program is heavy on reforms in the key areas of the civil service, public enterprise and public financial management. budget strategy supports monetary policy it was also important to see that fiscal policy is complementing

issues they raise and other possible approaches to achieve our objective. federal reserve consumer help www. federalreserveconsumerhelp. gov / index _ sp. cfm. under the proposal, a " higher - priced mortgage loan " would have an apr that exceeds the yield on comparable treasury securities by three or more percentage points for first - lien loans, or five or more percentage points for subordinate - lien loans. can be accessed online at our public hearings and our analysis identified problems not just in higher - priced loans, but also in the broader mortgage market. thus, our proposal addresses unfair or deceptive practices for the vast majority of mortgage loans secured by a consumer's primary home. areas targeted this broadly include broker steering, appraisal coercion, unwarranted servicing fees, and deceptive advertising. i'll touch on broker steering toward the end of my remarks. robust approach to affordability extending credit that borrowers can afford to repay is a fundamental pillar of responsible lending. across the whole range of higher - priced mortgage loans, our proposal offers three rules that, working in combination, would help ensure that borrowers can afford their payments. first, is a requirement that a lender maintain responsible underwriting practices that genuinely assess borrowers'ability to repay. this general requirement would be complemented by a specific requirement to verify the income and assets of the borrower that are relied upon in making the loan. a third rule would require lenders to escrow property taxes and homeowners insurance to help borrowers meet these obligations. this robust approach to affordability would help ensure that the subprime market promotes sustainable homeownership. just as important, it would also help protect consumers from abusive refinancings that strip equity. clear lending standards have the further advantages of increasing investor confidence in the mortgage market and helping to revive the flow of credit to consumers with shorter or weaker credit records. assessment of repayment ability now i want to discuss the major elements of our proposed regulations for higher - priced loans in a little more depth, starting with the requirement to assess repayment ability. the regulations would prohibit a lender from engaging in a pattern or practice of making higherpriced loans based on the value of the borrower's house rather than on the borrower's ability to repay from income, or from assets other than the house. this prohibition is intentionally broad to capture all risks to loan performance and the different ways that