The government’s overriding immediate priority must be to bring the public finances to a responsible and sustainable state by: paying off and getting behind it the mountain of arrears and unpaid bills that it has discovered since coming to office, said Deputy Prime Minister and Minister of Finance the Hon. K. Peter Turnquest.
The government must also fully institute proper budgeting for known commitments, including accrual accounting, such that arrears never again materialise; responsibly finance the highest priority initiatives in its agenda; and finally eliminate the GFS deficit in the shortest time practicable, in effect over three fiscal years, said DPM Turnquest said during his Contribution opening the 2018/19 Budget Debate in the House of Assembly, Wednesday, June 6, 2018.
“To achieve all of that, we have developed a fiscal strategy that, unlike the previous Government’s Medium Term Fiscal Consolidation Plan, comprises concrete and specific actions that will secure the attainment of our objectives.”
He said in 2018/19, the Government held a very tight rein on Recurrent Expenditure – other than allocating $172 million to the payment of a large first tranche of arrears, a further $76 million to the proper budgeting of known spending obligations and $89 million for additional interest payments, essentially kept all other Recurrent Expenditure constant, with reallocations to fund the small number of select priority initiatives that we announced in the Communication totalling some $19 million.
“In fact, 24 of the 53 Heads, excluding interest payments, saw reductions in their budget allocations and 3 were given an increase under 1.5 per cent. Of course, we also cut our spending on both the wage bill and goods and services in the current fiscal year by 10.3 per cent, or $120 million.”
The DPM said the focused Recurrent Expenditure initiatives are targeted at promoting enhanced growth and skills development, such as the $5 million in support for Small and medium Enterprises development, the $4 million for college student recruitment, the $2.6 million for BTVI scholarships and the $5 million for inclusive growth in heritage or foundation communities.
He said the Government is also striving to promote the diversification of the economy through both the digital economy and the blue economy; to enhance trade opportunities through membership in the World Trade Organization; and to provide growth-supportive public infrastructure investments.
DPM Turnqest said the Government is proceeding with the longstanding plans to transform the Ministry of Finance, and re-activating the Inter-American Development project to reform the Public Financial Management system.
He said, “We are moving to reform and modernize the State-Owned Enterprises such that they become significantly more efficient and self-sufficient.”
The Finance Minister also noted that the Government is pushing ahead with the fundamental structural reform of Real Property Tax and Customs, both of which are in need of modernization such that they can efficiently serve the public and properly generate the revenue streams that they should. “To that end, we are re-energizing the Revenue Enhancement Unit that had become dormant under the previous Government.”
He said in the interim, the Real Property Tax and Customs administrations have been given direction to shape up their operations to the maximum extent feasible in order to generate an additional $80 million in revenue in the 2018/19 fiscal year.
Deputy Prime Minister and Minister of Finance, the Hon. K. Peter Turnquest in the House of Assembly, June 6, 2018. (BIS Photo/Yontalay Bowe)
