Prime Minister and Minister of Finance Dr. Ralph Gonsalves. (File photo)

ST. VINCENT (Jan. 20):- Legislators in St. Vincent and the Grenadines late Thursday night adopted an EC$786.48 million (US$291.29 million) Estimates of Revenue and Expenditure for this year, paving the way for the budget debates next week.

Prime Minister and Minister of Finance Dr. Ralph Gonsalves said this year’s figure is 13.9 per cent or EC$126.99 million (US$47.03 million) less than the estimates approved for 2010.

The Estimates have a current account deficit of EC$27 million (US$10 million) and a smaller capital budget, which Gonsalves said is responsible for the reduction in planned expenditure this year.

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The capital budget has been reduced by EC$126.63 million (US$46.9 million), moving from EC$303.3 million (US$112.33 million) in 2010 to EC$176.67 (US$65.43 million) this year.

“…in the 2011 budget, we have attempted to balance efficaciously, more than ever, prudence and enterprise,” Gonsalves said.

He further said that the 2010 budget had three big ticket capital items that accounted for 38 per cent of spending.

These were the financial stabilization programme of EC$40 million (US$14.81 million); the Argyle International Airport, EC$54 million (US$20 million); and, the purchase of coast guard vessels, $19.1 million (US$7.07 million), Gonsalves told Parliament.

He said the total recurrent outlays for 2011 amount to EC$609.81 million (US$225.86 million) with current expenditure of EC$532.07 million (US$197.06 million) and debt servicing of EC$77.74 million (US$28.79 million).

Total recurrent spending, including debt servicing, is expected to decline by EC$0.36 million or 0.1 per cent over the amount budgeted for the 2010 fiscal year.

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The national debt now stands at EC$1.23 billion (EC$0.45 billion)

The 2010 budget is funded by current revenue of EC$502.75 million (US$186.20 million) and capital receipts of EC$281.73 million (US$104.34 million).

“I want to give the assurance that it is not anticipated that the budget outturn for the year will yield such a deficit on the current account. Prudent fiscal management during the year should result indeed in a small surplus by the end of the year,” Gonsalves said.

Meanwhile, Leader of the Opposition Arnhim Eustace said he had reservations about the Estimates, saying that they were not designed to improve economic growth for the year 2011.

“What I see before me is simply a rehash of what he had last year,” said Eustace, a former prime minister and Minister of Finance.

“Last year the budget amounted to some EC$913 million and it was hailed as the biggest ever. And there seems to be the assumption that we all should make that the bigger the budget, the better it is,” Eustace said in his response.

“Well, I am not satisfied and when it comes to some of the projections here, I have a lot of difficulties with them. And these estimates, as they are, to me, do not achieve the desired goals to make a meaningful contribution to improve economic growth for the year 2011,” he said.

But Gonsalves, in his response at the end of the debates said that there was nothing wrong, in the circumstances, with a deficit on the Current Account, providing that it is “manageable”.

He said that last year, his government ended the year with an EC$1.3 million (US$0.48 million) surplus on the Current Account although it had budgeted for an EC$26 million (US$9.63 million) deficit.