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ST. VINCENT (Jan. 24):- Minister of Finance, Prime Minister Dr. Ralph Gonsalves, says that in order to keep within expenditure allocations he will be insisting that government ministries and departments pay more attention to financial controls and reduce wastage.

Gonsalves has further secured the support of the Teachers’ Union and the Public Service Union for a proposed deferral of the 2011 salary increase until June.

Salary increases will be re-examined in June based on the nation’s economic situation, Gonsalves said, adding that he was awaiting a response from the Police Welfare Association.

The total expenditure budget for 2011 is EC$786.5 million, a decrease of 13.9 per cent below the budget for 2010.

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Of the 2011 budget, EC$609.8 million will on recurrent expenditure, including amortization, and EC$176.7 million is for capital spending.

“Good procurement practices will be demanded for all government purchases as this will have a direct and positive impact on cost and quality,” he said while presenting the budget on Monday, Jan. 24.

Gonsalves said his government aims to finalise the Procurement and Contract Administration Bill and Regulations this year and to advance work on the Government Assets Regulations, “to help instil and foster this responsibility among public servants”.

St. Vincent and the Grenadines Recurrent expenditure 2011

“The proposed recurrent expenditure for 2011 has been held closely to that of the previous year despite the need to provide for several new programmes and activities,” Gonsalves said.

These new programmes and activities are:

  1. EC$3 million as income support to banana farmers affected by Hurricane Tomas and
  2. EC$6.3 million to partially finance housing assistance to persons whose homes were damaged by Hurricane Tomas;
  3. EC$3.4 million for social welfare payments;
  4. An increase in pension benefits from EC$39.2 million in 2010 to EC$46.0 million in 2011;
  5. EC$2.8 million for the operational costs of the Youth Empowerment Programme, previously carried under the Capital Estimates; and
  6. Several new programmes including the National Qualification Department, the Education Research, Information and Communications Unit in the Ministry of Education and the Integrated Medical Assistance Programme in the Ministry of Health and a grant of $600,000 to the Centre for Enterprise Development.

Gonsalves further said the proposed EC$176.7 million capital budget for 2011 will also be managed  more efficaciously.

St. Vincent and the Grenadines Capital expenditure 2011.

This year’s capital budget compares to the EC$$303.3 million of 2010. The decrease resulted from the absence of several projects, which will not be repeated this year, monies for the international airport, the Financial Stabilisation Programme and EC$19 million for coast guard vessels.

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“…we have attempted to rationalise the Capital Expenditure Budget and include only those projects which have a more than reasonable chance of delivery in 2011,” Gonsalves told Parliament.

“Of the total resources required to meet capital expenditure and the deficit on the recurrent account I expect to provide $25 million from capital revenue, $54.7 million from grants, $53 million from external loans, $33.4 million in local loans, and the balance from a variety of sources including bank deposits, sale of additional assets and expenditure saving measures,” he said in outlining his government’s financing plan.

Gonsalves said the main source of capital revenue for 2011 is expected to come from sale of an additional 2.9 million common shares in the National Commercial Bank, which is expected to realise between $24 million and $30 million.

These monies will be used to fund a micro finance facility to provide financial services to micro, small and medium-sized enterprises; E.T. Joshua Runway Improvements; Canouan Administrative Building; Rehabilitation of Union Island Airport; Hurricane Tomas Rehabilitation; the Irrigation Project; the Modern Medical Complex and Access Roads to Tourism Sites.