Leader of the Opposition Godwin Friday has described the Estimates of Revenue and Expenditure for 2020 as part of the government’s “continuing process of promising, failing to deliver”.
On Wednesday, Minister of Finance Camillo Gonsalves asked lawmakers to approve an EC$1,186,351,151 fiscal package, for 2020, which will pave the way for the presentation of the Budget Address next Monday.
The 2020 estimates are greater by 11.2% than the budget Parliament approved for 2019.
But Friday pointed out that in 2019, the estimates also went over the EC$1 billion mark to EC$1.067 billion.
“It’s growing bigger faster. So it’s very clear to me, and it would be to most people in this country, that the minister and the government, they are responding to the fact that we are in an election year. This is an election budget. We are now permanently the billion-dollar budget,” the opposition leader said.
Friday noted that the EC$5,076.3 million capital budget includes other capital receipts of EC$205.3 million.
The opposition leader said that debt and salaries consume more than half of government revenue, adding that because of the way the budget is formulated, the Tourism Authority gets half of what is budgeted.
“So what we have here, Mr. Speaker, in general terms, is a continuing process of promising, failing to deliver,” Friday said.
“It is a modus operandus of this government in that they are consistent. But the people of this country have come to the point where they are sick and tired of being taken for granted, where, when their support is needed at election time, some brand new shiny object is waved in front of them to dazzle and bamboozle and at the end of the day, it turns out to be razzmatazz and of little substance.”
Friday said that that sort of “synclinal politics” has no place in a modern St. Vincent and the Grenadines.
He said that the opposition is advocating a people-centred approach to governance.
This approach, Friday said, begins with people and not what is required by the government “to win favour and to show how great you are, what mighty works I have made and the lives of the people remains the same or gets worse.
“And when the minister outlines all these things he is going to do, I say we wait and see but I can predict …” Friday said.
He said including the other receipts figure is “pure deceit” and, therefore, money is not spent to do essential things, like fixing potholes and providing essential services.
“That’s why it takes a whole year for the Minister of Health — and I am sure he was asking the Minister of Finance for that money — to buy the air conditioner for the sterilisation department. It took a whole year to get that before it was repaired.”
He said people complain about lack of supplies at the hospital.
“You have to carry all your supplies like you going camping when you go to the hospital and these are things that result directly from the government promising certain things, don’t have any money and they’re squeezing someone else to get it from.
“And all of this is happening while we have the pressure to pay back our mounting debt, which is squeezing, limiting the ability of the minister of finance to do things.”
Friday questioned the real meaning of the budget for the country.
“Does it mean that the minister will spend or even intend to spend $1.2 billion in 2020 or is this just, to use the most charitable term, an unrealistic wish or a fantasy, or, less generous terms but perhaps more accurate, to say that the budget continues the big fat lies that this government has perpetrated on the people year after year?”
‘a continuation of the same pattern’
The opposition leader said that the figures are “a continuation of the same pattern that we are all familiar with in this House”.
He noted that the government has budgeted EC$320 million for capital spending.
“But they know that they will not and cannot execute that. They cannot achieve that. This is because they do not have $1.2 billion to spend and they know it, yet they put it in the budget,” he said.
He said that if the record of the past years of the government is relied on, his is a safe prediction to make.
“They do not have the money to do it, they will not do it, and what is worse, they never intended to do it.”
In looking at the source of funds, including tax revenue of EC$585.6 million, and EC$94.3 million for a current revenue total EC$680 million, Friday made certain observations.
Capital receipt is made of grants of EC$60.6 million, external loans of EC$118.4 million and local loan of about EC$74 million.
There is also capital revenue largely from land sales of about EC$3 million. There is also a budget support loan of EC$46.9 million.
Friday noted the finance minister’s explanation that the budget support loan came from the International Development Association, which is affiliated with the World Bank, and has an interest rate 0.5% and a long-term repayment period.
Added to that, there are other capital receipts of EC$205.3 million, bringing the total to EC$5,076.3 million.
Friday said the problematic component of this is capital receipts of over EC$205 million.
“And the history has been that that money, as the minister himself pointed out, you will collect 3 and 4%, most of the time, under 10%,” Friday said.
However, in 2019, there seems to have been a boon, “where the government claims that it received $160 million in other receipts. It didn’t say exactly where that came from,” Friday said, adding that, in the document, it is listed under domestic source of funding.
“But I find it difficult to imagine that we could raise $160 million domestically,” Friday said and asked for an explanation of the source.
“How do we suddenly go from hardly ever receiving any funds in this category to $160 million and what is the likelihood that this continues to be the happy circumstance that every year, at the preparation of the budget, the minister would not be aware of this source of funding, so, therefore, everything else is lumped under other receipts to balance the budget in the hope that during the year something would come up and fill that category.”
Friday said that in the purest sense, other receipts “is a balancing device, it is an accounting device to make the budget add up because the minister can’t present a budget where on the face of it he cannot execute what he is doing.
“So leave it up to us and others who may have a better understanding than the general public of how these things work to say ‘you see that category of other receipts, it doesn’t mean that the government has the money’.
“That means that they don’t know if they have the money and so when they tell you they are going to spend $1.2 billion, don’t believe it because they don’t even know where the money is coming from. Because if they knew where it is coming from it would be specified in the estimates.”
The opposition leader said what it means is that potholes will get bigger and more numerous because if the government want to execute some of the projects in the budget and they don’t have the money, they would have to take it from elsewhere.
He said the 2020 fiscal package is effectively a deficit budget, adding that Other Receipts is 40% of the capital budget.
“Why continue to inflate the budget? Why say you have a billion-dollar budget if you know you are $200 million short?” Friday said.
He said that in 2013, the figure was EC$113.6 million, EC$154 million in 2015, EC$160 in 2018, EC$198 in 2019, and EC$205 in 2020.
“So as the deficit gets bigger, the lie gets bigger and the question is why? … and I will say, if you don’t want us to speak about this big fat lie, then don’t tell it.”
He said that opposition lawmakers have been asking the minister of finance over the years to stop telling people there is a large budget when the government does not have the money.
“And the temptation, of course, is great this year because they want to impress people,” he said, noting the upcoming general election.
“… and things that they ain’t deliver for the last four and a half years, suddenly they want you to believe they have the money, they have the intention and will deliver for you.”
He said the most cynical example of this is the athletics track, which the government is proposing to build 19 years after coming to office and promising to build a national stadium.
“And then all of a sudden, things getting hot, pressure mounting, so yes, we’re gonna deliver a track for the people. So they will put down a carpet and they will tell you ‘here we fulfil our promise’. We have the stadium that [Muammar] Gaddafi was supposed to have given money for so long ago. Another part of the big, fat lie.”
The debate continues.