New finance minister presents first Budget today

By Kenton X. Chance

Minister of Finance Camillo Gonsalves is scheduled to present to Parliament later today (Monday) his first Budget since taking up that portfolio last November.

The minister will present the fiscal package one week after Parliament approved — in the absence of opposition lawmakers — Estimates of Income and Expenditure of EC$993,535,449 for 2018.

The figure represents a 1.7 per cent increase over the approved Budget for 2017 and includes the first surplus in years.

The finance minister will also present the Budget exactly one month to the date of the breaking of the scandal in which former model Yugge Farrell has claimed that he cheated on his wife with her.

The scandal came to light after Farrell was brought to court on a charge the she used abusive language to the minister’s wife, Karen Duncan-Gonsalves, then a senior crown counsel, who has since been appointed acting Director of the Financial Services Authority.

Farrell spent three weeks in a psychiatric hospital after Magistrate Bertie Pompey granted, in the absence of supporting evidence, an application by the Crown that the woman be sent for psychiatric evaluation.

She was granted EC$1,000 bail last week Monday and is scheduled to return to court on Dec. 17, 2018.

The finance minister has remained largely silent on the scandal, apparently taking the advice of his father, Prime Minister Ralph Gonsalves, to maintain a “dignified silence” and not say anything as yet.

The prime minister, however, has been commenting widely on the scandal, doing so in calls to various radio stations and in one of his press conference.

Leader of the Opposition Godwin Friday has called on the finance minister to explain himself amidst the scandal and his party has said the minister must resign if he fails to explain himself.

Opposition lawmakers walked out of Parliament last week Monday and tabled a motion of no confidence in the government after failing to get House Speaker Jomo Thomas to allow them to use the national assembly to ask the minister to explain himself in light of the scandal.

The government succeeded in manipulating Parliament last Thursday and turned what should have been the debate on the no confidence motion into a motion of confidence in itself.

Opposition lawmakers did not return to Parliament Wednesday afternoon for that debate, which Member of Parliament for Central Kingstown, an opposition MP, said amounted to “political masturbation”.

The Speaker has since said in a Facebook post that he erred when he allowed the government to amend the opposition’s motion.

Amidst the finance minister’s silence, however, political observers say that two statements the minister made during his presentation of the Estimates can be interpreted as indirect references to the scandal and to the allegations made against him.

Gonsalves said he was not sure how much of a debate there would be on the numbers, an apparent reference to the absence of opposition lawmakers.

“I was once told that you haven’t arrived until you can make them depart. So maybe ah reach,” the finance minister said.

The second apparent reference to the scandal came as the minister discussed the reduction in the nation’s external debt after several loans were repaid and debt forgiveness received for others from the Venezuela-based ALBA Bank.

“Mr. Speaker, for a long time, … we held our tongue while people talked about debt on airport. … We already knew that we were going to get this $81 million in debt forgiveness from ALBA but it was not the opportune time to disclose that. So we leh them talk. And in all things, you talk at the appropriate time, not when they try to draw you out,” the finance minister said.

As is normally the case, Vincentians are looking forward to hearing the Budget to see what fiscal measures would be put in place this year.

The 2018 budget is comprised of recurrent expenditure, inclusive of Amortisation and Sinking Fund Contributions of EC$776,879,739 and capital expenditure of EC$216,655,710.

The government is anticipating that the 2018 budget will be financed by current revenue of EC$620,658,138, and capital receipts of EC$371,877,312.

In presenting the estimates last week, Gonsalves said that the 2018 current expenditure, exclusive of Amortisation and Sinking Fund Contribution amounts to EC$617,421,847.

Current revenue of EC$621,658,138 is expected to be collected in 2018.

“As a consequence, there is a modest current account surplus of EC$4.2 million in these estimates. I believe it’s been a little while since we could report to the people of St. Vincent and the Grenadines a current account surplus.”

He said the EC$621 million in current revenue is 5.2 per cent or EC$30 million more than in 2017.

Another area of keen interest would be the new finance minister’s proposals on pension reform, which the government and labour union representing public sector workers have agreed must be undertaken as a matter of urgency.

During the budget consultations last year, the prime minister said a class war could break out in St. Vincent and the Grenadines over the matter of pension reform.

He went on to suggest some extreme measures his government can take, such as hiring public servants on contracts without state pension benefits if a favourable compromise cannot be reached.

“You just have to do the math, because it is approaching a point at which your non-contributory pension which you get from the state and your contributory pension from the NIS (National Insurance Services), very shortly — in fact, it has started already, but very shortly to everybody, you will be getting more in pension from both sources than when you were working. Well that is unsustainable. Completely unsustainable,” Gonsalves told the union representatives at a closed-door meeting, a record of which had been obtained by iWitness News.

Meanwhile, on Jan. 25, the finance minister sounded a note of optimism as he addressed the business community in St. Vincent and the Grenadines.

“I am convinced, as are many of the economists in my ministry, that there is considerable cause for optimism about the growth and development prospects for St. Vincent and the Grenadines in the near term,” he told a luncheon organized by the Chamber of Industry and Commerce.

The minister, however, said there are potential pitfalls as well.

“However, my central message to you today is that St. Vincent and the Grenadines will only maximise its theoretical potential if the local private sector seizes upon the many opportunities that are available in this new leg of our developmental journey,” he said.

Speaking to iWitness News in December, the finance minister suggested that the budget will find favour with the business community.

“… I think that there are some things, some innovations that I hope will find favour with the wider cabinet to ease some of the burdens on business, to foster greater economic growth and job creation, but the specifics are still being discussed at the Cabinet level and I think it’s a little premature to discuss them publicly,” he said.

The new finance minister has replaced his father, who held that portfolio since the Unity Labour Party came to office in March 2001.

Political observers say that the finance minister has outshone his parliamentary senior, Minister of Agriculture Saboto Caesar, who many had seen as his closest rival to leave the ULP and become prime minister when Gonsalves steps down.

The prime minister has said that he will not lead the ULP into the next general elections, constitutionally due in March 2021, but will seek re-election as Member of Parliament for North Central Windward.

The finance minister’s comments to iWitness News had come at a time when there were speculations that he would give a sugary budget that included reduced taxes.

“We will evaluate where we are, we think there are some reasons for optimism and we want that optimism to be passed on to the Vincentian population but there are some areas we have to be particularly cautious about. So there is no sugary budget, there is no sweet budget, there is no gimmick budget,” he told iWitness News.

Asked if there will be an election budget, he said, “Well, I don’t call elections. The disadvantage that the prime minister has is that he can’t pass an election budget because he is not a finance minister.”