Over the years the budget has been on an increasing trend. However, in an effort to contain expenditure and improve the government’s fiscal position, the 2013/2014 draft estimates proposes funding for expenditure amounting $1.327 billion representing $130.4 million down from last year’s approved estimates of $1.457 billion but $42.3 million above the out-turn (1.285 million) for 2012/13.
The proposed increase over the outturn for 2012/13 reflects to a large extent the upward pressure exerted on the wage bill due to the proposed salary increase.
Total Recurrent expenditure is expected to decline by 1.6% below the approved estimates for 2012/13 to $947.1 million but remains relatively flat at just 0.6% compared to the preliminary outturn for the same period.
At $380.3 million, the proposed capital expenditure budget for 2013-14 represents $114.6 million or 23.2% decrease compared to the approved estimates for 2012-13 but a 10.8% decrease below the preliminary outturn for the year.
In order to improve overall predictability of cash flows during budget execution, a conservative amount of $839.9 in recurrent revenues is projected for the new fiscal year. With this amount of recurrent revenues ($839.9 million) and grants of approximately $137.9 million, government’s fiscal operations are expected to generate a recurrent deficit of $107.2 million and an overall deficit of $286.1 million. At 7.7% of GDP, the overall deficit represents an improvement over the outturn for 2012/13 (8.6%) and the approved estimates (9.5%) for the same period.
COST OF WAGES AND SALARIES
In the 2013/14 budget a sum of $450.9 million has been allocated to meet the cost of wages & salaries and retiring benefits. This amount represents an overall increase of 0.8% over the approved estimates for the previous year. Containing expenditure on wages and salaries was accomplished by reducing the number of funded vacant positions while ensuring minimal disruption in service delivery by government agencies.
INTEREST CHARGES ON DEBT
In the Recurrent Budget, the Government of Saint Lucia is also proposing a $141 million to meet the interest payments and other charges on our debt obligations for the year. Additionally, a sum of $63.2 million had to be provided to meet debt amortization payments. When added to the Overall Deficit of $286.1 million, it results in an Overall Financing Requirement of $349.4 million.
With respect to transfer payments, the Government of Saint Lucia is proposing to allocate a sum of $95.9 million representing a 17% decline from a preliminary outturn of $116.2 million. Consistent with the decision to contain recurrent expenditure at the same level as the outturn for 2012/13, the reductions are expected to be realized by a partial reduction of subsidy on the basic commodities. Currently, the subsidy on the basic commodity stands at approximately 21.9 million dollars.
ALLOCATION FOR GOODS AND SERVICES
Like wages and salaries, the allocation for goods and services has been increased by 2% over the approved estimates for 2012/13 reflecting the impact of VAT on items such as rental of office, telecommunication charges and operating and maintenance cost. Downward adjustments were effected on other lines to compensate for these increases.
Finally, the Government of Saint Lucia is proposing to allocate some $380.3 million to its capital program in the new fiscal year. This amount is expected to be entirely funded by external sources with approximately 36% being grant funds. The outturn for 2012/13 showed approximately 21% of the capital budget was financed through the receipt of grant.