St Lucia’s budget expectation vs. facts (commentary by Melanius Alphonse)

1
St Lucia’s budget expectation vs. facts (commentary by Melanius Alphonse)

Prior to the presentation of the estimates of expenditure for 2018/2019 in parliament, Saint Lucia’s dual finance ministers have been signalling “marked improvements” in the fiscal position of the government by way of a “three percent growth rate”.

But, while this was being advanced at a briefing on Tuesday, March 13, by the minister in the ministry of finance, Ubaldus Raymond, on the other hand, prime minister and minister for finance, Allen Chastanet attempted to temper the public’s expectations leading to the 2018/19 budget presentation and subsequent debate:

“Any attempt to suggest that my government is gloating or proud and believing that we’ve achieved something colossal with three percent economic growth – No!

“The three percent economic growth suggests to us that we’re moving in the right track that the direction of the ship has been changed and we’re seeing early signs that we can address the unemployment problem in this country. We’re seeing early signs that we can address the debt problem and generate more cash for this country and that we can put this country on a on a growth rate. It’s when we have doubled the GDP of this country that we will then start saying okay we know that we’ve done something in which the people of this country are going to feel.

“It’s difficult for everybody to feel a three percent growth. But certainly it’s a good sign. It’s a good first step. A year and a half into, into government that we’re able to reverse those times and certainly seeing an improvement in the fiscal position.

“But by no means is my government suggesting at all that we’ve arrived. All we have said is that we’re seeing early signs of improvement but the success that we want for this country we’re a long way away from achieving that success. And we have a lot more investments a lot more things to do before we can start seeing a doubling of the GDP of this country.”

Unsurprisingly, in parliament the following week, March 21, the minister for finance presented the estimates of expenditure 2018/2019 in the sum of EC$1,487,583,200.

The finance minister announced that government’s economic performance, revenue enhancement measures and efficiencies in tax administration impacted the main tax sources as well as the anticipated improvement in economic activity for 2018/2019:

“The total projected recurrent revenue for 2018/2019 is comprised of 1,000 million, 1,008.36 million or 91 percent of tax revenue, and 1.484 million in non-tax revenue. Tax revenue is forecast to increase by 4 percent in comparison to the out-turn of 2017/2018, while non-tax revenue is expected to increase by 6.4 percent compared to the revised estimates.

“Taxes on income and profits are projected to amount to EC262.79 million, up by 6.88 million or 2.6 percent above the revised estimates of 2017/2018. This reflects expected increases in all the components of this category of revenue, namely income tax from corporations, individuals withholding tax.”

Social media postings were abuzz with “AllenMatics 1,000 million”:

• “Lies sound like facts to those who’ve been conditioned not to recognize the truth.”

• “1,000 million is equivalent to one billion. Chastanet stumbles with numbers. Saint Lucia’s revenue will be one billion… doesn’t sound factual. We always suffer annual deficits. So I guess he’s dyslexic.”

• “It’s a huge gamble to place an economy at the mercy of these two guys. You have a better chance at the slots in Vegas.”

According to the finance minister, there is a primary surplus of EC$45.6 million, the equivalent of 1 percent GDP and an overall deficit of EC$116, 800 000, or 2.5 percent of the GDP is anticipated, relative to a primary deficit of 1.1 percent of GDP and an overall deficit of 4.7 percent programmed for the year:

“We had projected a deficit of, a primary deficit of 1.1 percent and we achieved a deficit, a surplus of 1 percent. We had projected a deficit, an overall deficit of 4.7 percent and we actually achieved a deficit of 2.5 percent of GDP.”

Leader of the opposition, Philip J Pierre, rearranged the finance minister’s attempt to hide the poor fiscal performance of the economy by comparing estimated budget figures with the actual figures that mirror the performance of the economy, in his contribution to the “Ides of March Estimates.”

“I will attempt once again to show the reality of the fiscal situation in Saint Lucia and the real state of the fiscal health of the island. Economies are measured by actual figures and I will demonstrate that in terms of actual figures the fiscal position of the government worsened this year:

• For year ended 2017 the current surplus difference between actual current revenue and expenditure was EC$93 million;

• For the year ending March 2018 the current surplus was EC$62 million;

• The country did worse, the surplus was lower by an amount of EC$31 million:

• For year ended 2017 the recurrent surplus (deficit) the difference between recurrent revenue less recurrent expenses these recurrent deficit was EC$32 million;

• For the year ending March 2018 the recurrent deficit was EC$61 million;

• The country did worse by EC$29 million;

• For the year ended 2017 the primary surplus or deficit which is total revenue less;

• Total Expenditure leaving out interest and sometimes called the fiscal effort of the government is another significant measure;

• For the year ended March 2017 the primary surplus was EC$85 million;

• For the year ending March 2018 the primary surplus is EC$45 million;

• The primary surplus was worse by EC$40 million;

• The overall surplus (deficit) is the difference between total revenue and total expenditure;

• For the year ending March 2017 the total deficit was EC$73 million;

• For the year ending March 2018 the total deficit was EC$116 million:

• The total deficit was worse by EC$43 million.

These figures are substantiated by the social and Economic Review (page 9) which states “despite an improvement in revenue the government fiscal situation is expected to deteriorate in 2018 with smaller current and primary surpluses”.

Then the notice from Pierre to the administration: “I hope it is not left to the trained surrogates and consultants to respond.”

But let’s assume that answers are provided to the social and political context, benefits to local communities and the nation at large that directs government priorities and the fiscal responsibilities of the estimates of expenditure 2018/2019.

First, the analysis is such that it’s going to be more of the same: documents written by civil servants that bear no reality, with the exception of the prime minister’s tendency to castrate the English language.

Second, given the minister for finance’s concept of numbers, $1,000 million, “then, the people know this is a myth to the fiscal realities.”

Third, at this perilous moment in Saint Lucia, the prime minister and minister for finance has expressed the ideology: “Should it be every dog that barks that I should respond,” which aligns with his agenda, influenced directly by repugnant wealthy tycoons of the Caribbean.

Melanius Alphonse is a management and development consultant, a long-standing senior correspondent and a contributing columnist to Caribbean News Now. His areas of focus include political, economic and global security developments, and on the latest news and opinion. His philanthropic interests include advocating for community development, social justice, economic freedom and equality. He contributes to special programming on Radio Free Iyanola, RFI 102.1FM and NewsNow Global analysis. He can be reached at [email protected]

(1)(2)

No posts to display

1 COMMENT

  1. Facts cannot be disproved . They remain facts forever. Like Phillip said, “facts are facts”.

    (2)(0)

Comments are closed.