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KINGSTOWN, St. Vincent, Jan 30, CMC – The St. Vincent and the Grenadines parliament Tuesday night approved the estimates of income and expenditure for the 2019 national budget with the government outlining measures to increase revenue from taxes, increase employment within the public service as well as revisit pension reform.
Finance Minister Camillo Gonsalves, who presented the figures to legislators, will deliver the budget statement to Parliament on Monday.
But he said that the EC$1,067 billion (One EC dollar=US$0.37 cents) budget represents a 7.4 per cent year-on-year increase and that the hike in the total outlay in 2019 is accounted for on both the capital and recurrent sides of the fiscal package. ,
Gonsalves presented the figures amidst protest by members of the St. Vincent and the Grenadines Teachers’ Union (SVGTU) and the Public Service Union (PSU) over the government’s handling of matters affecting them, including salary increases.
According to the figures presented in Parliament, recurrent expenditure, inclusive of amortisation and sinking fund contributions, is estimated at EC$844.7 million with capital expenditure of EC$222.5 million.
Gonsalves said that the ruling Unity Labour Party (ULP) in its continued quest to lift the level of public services delivered, would make funds available for improving the human resource capability and that a number of new positions have been created in strategically important areas of the public service to enhance service delivery to citizens.
Gonsalves said that there would be at least 113 new positions, including 81 police officers within the Ministry of National security.
“These additional boots on the ground will give much needed support to the citizens’ security and public security,” Gonsalves said, adding that 10 new posts were added to the fire services.
The nation’s firefighting capacity will be further enhanced with the addition of two new fire tenders to strengthen the department’s ability to respond to emergencies.
The Coast Guard Service has eight new posts added in conjunction with the new patrol vessel, which was commissioned last week.
Gonsalves said that 78 new positions would be created in the Ministry of Health, Wellness and the Environment “to strengthen hospital community health, mental health and laboratory services”.
St. Vincent and the Grenadines will also have a greater presence in Taiwan, and Gonsalves, a former diplomat said that seven posts have been created within the Ministry of Foreign Affairs to also enhance the capacity of the island’s mission at the United Nations.
The government said that the improved revenue performance is attributed mainly to an anticipated pick up in real economic activity in 2019 and administrative improvements at the main revenue agencies. It said revenue from tax sources is expected to contribute EC$568.4 million to the Consolidated Fund in 2019 while non-tax revenue is expected to gross EC$88.2 million.
Gonsalves said tax revenue is expected to grow by 6.8 per cent, driven mainly by strong growth in taxes on international trade and taxes on goods and services, which are projected to increase by 12.5 per cent and 9.3 per cent respectively
Taxes on income and profits, which is projected to grow 1.8 per cent to EC$158.6 million is the third largest source of government revenue.
The EC$88.2 million budgeted for the collection of non-tax revenue is expected to come mainly from the sales of goods and services, which is projected to generate EC$71 million in revenue. Revenue from non-tax sources will also benefit from inflows of property income and other revenue.
The government said that wages and salaries have increased by EC$16.5 million and will account for EC$306.5 million, including the retroactive one per cent salary increase for public servants in the second half of 2018.
“The government is looking toward pension reform in order to address its increasing outlays on this item of expenditure, which has been the single fastest growing item of recurrent expenditure over the recent past,” the Finance Minister said, noting that pension provision will amount to EC$60.2 million plus EC$12.5 million in National Insurance Scheme (NIS) contribution.
“This issue of pension reform, Mr. Speaker, Honourable Members, the framework on this matter was discussed in the debate on the last Appropriations Bill and in the upcoming debate on this year’s Appropriations Bill, I will provide this Honourable House with some additional information on the progress we have made and how we plan to interact with the public and the stakeholders going forward on this very important issue of pension reform.”