The Fiji government has tabled an US$826 million for 2005.
The budget forecasts a deficit of 3.5 per cent next year, compared with a deficit of 4.8 per cent for this year.
The minister of finance, Ratu Jone Kubuabola, says economic growth will decline to just 1.5 per cent.
He has attributed this to the disappearance of Fiji's garment quota on the US market and decreased income from sugar exports to the European Union.
Both of these are the results of decisions of the World Trade Organisation.
Eighty two percent of the total government expenditure will go to pay for its running costs with only 18 per cent allocated for capital development.
The biggest component of the budget, US$151 million, will go to education, of which over US$20 million is allocated to the University of the South Pacific.
The health and police budgets have been increased slightly and US$10 million will go towards tourism promotion.
But the military budget has been reduced.
The minuster says there will be no change to the income tax rates and no new taxes, but fringe benefits will be taxed in line with other income.
He has increased excise duty on tobacco and spirits by four per cent and again raised customs duty on the import of second-hand cars.