Prime Minister Ralph Gonsalves on Monday remained largely tight-lipped about this year’s Budget, which will be presented to Parliament on Feb. 6, but suggested that it will include measures to deal with the impact of climate change.
Gonsalves, who is also Minister of Finance, announced at a press conference in Kingstown that he has allocated one day, Jan. 30, for the debate of the Estimates of Income and Expenditure for 2017.
The Jan. 30 date is rather late, and the prime minister seemed to have anticipated questions about this.
He noted that the Constitution says that within one month of the Jan. 1 commencement of the financial year, the minister of finance must prepare and cause to be laid before the House the Estimates of Income and Expenditure for that year.
Gonsalves said he intends to have Parliament approve the figures before end of day next Monday, but will reserve the week beginning Feb. 6 for the Budget Debate.
The prime minister said he was at his office late Saturday afternoon finalising some matters with the Director General of Finance and Planning and the Budget Director and was on the phone with the Director Of Planning, finalising something on the capital side of the fiscal package.
He said he hopes to get the documents “in time” in the hands of the Members of Parliament, noting that the Government Printer generally needs three days to print them.
Gonsalves told reporters that he has instructed his staff to invite trade unions to a meeting on Thursday. “I’ll have one organised for the farmers and fisher folk and one for the business people, as I usually do in my on-going consultations before the Budget,” he said.
Asked about the contents of the fiscal package, Gonsalves said: “I would like you to wait until I present the estimates. It’s not long from now…”
The Gonsalves government has presented deficit budgets for the last decade or so, and asked if this year’s fiscal package will also see a shortfall on the income side, Gonsalves pointed out that in 2016, there was a planned deficit of EC$13 million on the current account but the actual outturn was a surplus of EC$69 million
“Because I always say with the Estimates it depends on how you manage the actual budget itself,” Gonsalves said, adding that his government also underestimated the performance of the revenue.
He said revenue performed above expectations last year for several different reasons, adding that he would explain them to Parliament in one of the debates.
“But still, we do have on-going challenges,” Gonsalves said, adding, “We are not out of the woods — the global situation and all that has happened here, including very much the natural disasters which have taken a lot of money.”
A number of trough systems in St. Vincent and the Grenadines towards the end of last year left about EC$100 million in damage and loss, Gonsalves has said.
He told reporters on Monday that the cleaning up after the trough systems last November cost the government over EC$10 million.
“And of course, there are always the big ticket items that put pressure on the recurrent revenue,” he said, mentioning among them salaries and wages.
He noted that that pensions and retirement benefits are the fastest growing areas of expenditure, amounting to about EC$69 million annually — about the equivalent of recurrent expenditure on health last year.
“And then, of course, debt services — because when you have these disasters and they are coming every year now. It’s no longer one in a 50-year event, one in 100-year event, they are coming every year and you don’t have to get the wind to mash up the place. You have wave action and you have rain and landslides and so on.
“But you would expect that I would have a number of measures related to how we’re dealing with this permanent vulnerability of increasing existential concern. So, as a responsible policymaker, I have to address it with some practical measure and we will see some of them I am putting forward. It wouldn’t be the end of the story but, I have to do things I can afford,” Gonsalves said.
In January 2016, Parliament approved, without opposition input, an EC$912 million budget, which included a new 2 per cent tax on cellphone calls, in addition to increases in property tax on commercial buildings, driver’s licenses, gun licenses, and the introduction of Value-Added Tax on a number of items, including chicken, lentil, salt, butter, yeast and baking powder.
The budget was passed in the absence of the opposition, which boycotted the debate as part of their rejection of the results of the December 2015 general election, which they accused the Gonsalves government of stealing.