“Tough decisions to tackle national debt” – Gov’t continues review of subventions and grants to State agencies

By Office of the Prime Minister
Allen Chastanet

PM Allen Chastanet

PRESS RELEASE – As part of his Budget Address on Tuesday May 9th 2017, Prime Minister Honourable Allen Chastanet spoke to the subject of tackling the national debt stating clearly that the Government will not let another term go by without decisive action.

Speaking about the Government’s Fiscal Strategy, the Minister for Finance, Economic Growth, Job Creation, External Affairs and the Public Service, said the Government has developed a Medium Term Debt Management Strategy (MTDS) to address this situation.

The Prime Minister admitted that the current debt burden has hindered Saint Lucia’s ability to accumulate buffers and to implement fiscal policies to spur the economic growth needed to place the country on a more sustainable path. Solving this problem, said the Prime Minister, is a shared interest for all stakeholders in the economy.

Among the initiatives undertaken by Government is determining whether the performance of statutory bodies and affiliated agencies justifies continued support of these agencies.

Said Prime Minister Chastanet: “There may be instances where a merger of agencies, or an elimination or reduction of transfers is the most suitable option. In some cases the environment has evolved, and the purpose for the creation of these agencies no longer exists. In other instances agencies may be better placed to operate as private institutions and allow market forces to set rates and determine the true cost of operations.”

The Prime Minister first spoke to the decision taken by Government with the Saint Lucia Tourist Board.

“Upon assuming office my Government took a decision to close the Saint Lucia Tourist Board and to establish the Saint Lucia Tourism Authority. This has resulted in the reduction of administrative expenses from $8.6 million in 2016/17, to $5.6 million programmed for the 2017/18 financial year.”

Other agencies whose operations and performances have been reviewed and a determination will be made on their continuation in their current form in the coming weeks and months; these include The Saint Lucia Marketing Board which the Prime Minister informed the House of Assembly was no longer the primary “farm gate” purchaser across the island.

“Currently, it handles approximately only 2% of the total produce of farmers. Consecutive years of losses have now rendered the Board virtually obsolete although its liabilities continue to burden taxpayers.”

Another entity which has drawn the concern of Government is The Saint Lucia Fish Marketing Corporation and the Government Supply Warehouse. The Prime Minister also gave the House of Assembly information about Radio Saint Lucia, stating the station continues to accumulate liabilities which could possibly be inherited by Government.

“Like the Marketing Board and the Fish Marketing Corporation, the factual matrix upon which RSL was established has changed,” admitted the Prime Minister.

“When RSL was established there were few avenues for disseminating information to our citizens. The radio was the most widely used tool for mass media and there were very few other radio stations. Madam Speaker, the current climate is far different; the internet, television, cell phones have taken over in terms of communication. The airwaves are saturated with radio stations, and multiple avenues exist for Government to get its message across to its citizens. We must therefore revisit the question of the role of RSL in this current climate. My government will reorganize the GIS to more effectively disseminate government information and its programmes. The company currently known as RSL will be closed, and the relevant programs will be restructured to take advantage of the new technologies for information dissemination.”

The Prime Minister then explained that the Saint Lucia National Trust has been advised to revise its business model to become financially independent.

“The Trust is charged with conserving the natural and cultural heritage of Saint Lucia,” Prime Minister Chastanet informed Parliament. “It is an advocacy group and is responsible for developing the sites which have been vested in it. The Government has supported the Trust through an annual subvention as well as through the vesting in the Trust, premier heritage sites. These valuable national assets can and should be leveraged to generate more significant revenue to sustain its operations, and thereby the Trust is being asked to revise its business model to become financially independent. As a result, the annual subvention will be discontinued. However, the government will continue to provide support to initiatives the Government believes has merit in supporting the development objectives of the state.”

Another agency under assessment is the Saint Lucia Postal Service with a consideration for privatization.

“This is not a decision we will take lightly,” noted the PM, “but one which we must consider given the requirements of the times and our dire fiscal situation. Privatization will accomplish two things – it will force the organization to review its operations and become more efficient, and the value of the services will face market forces and be priced accordingly.”

As the Prime Minister announced the agencies being reviewed he also stressed that these decisions are not easy to make.

“These tough decisions are necessary if we are to begin to turn our economy around. Subventions and grants to state affiliated agencies should not be a black hole into which money is poured,” he noted, “but rather should be viewed as investments which should produce returns of relevant, quality services to the people of Saint Lucia.”

For more on the budget presentation please visit http://www.govt.lc/.

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This article was posted in its entirety as received by stlucianewsonline.com. This media house does not correct any spelling or grammatical error within press releases and commentaries. The views expressed therein are not necessarily those of stlucianewsonline.com, its sponsors or advertisers.

13 comments

  1. We could have been much further and economically stronger in this country. You know why we are in this mess? The reason is because everyone thinks he or she has the answer. Too many square pegs in round holes and those degree holders who think they know it all are driving this country further into the gutter. Why cant we as a nation identify the problems of this country one by one in terms of priority and find solutions to them collectively and execute those solutions promptly. Sometimes the answer is in the hands of the kindergarten child that you would never expect. We claim we want to develop the country for our children and the next generation yet we refuse to engage the young people who are the ones who will inherit whatever decisions that we make a nation today.

    Why cant we come together at least for the children sake and execute some plan for them to inherit something that they can look back and say yes our leaders back then did well we are grateful for what they have done for us. No that is further away from the politcians mind they alone can do it even when they have been removed from office they still dream and believe that they are still in control.

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  2. So, with the closure of the SLMB, where do their farmers sell their produce? At the already overcrowded market? Certainly, the roadside is not an option as you find roadside bending an atrocity within the Capital and soon to be banned.
    And what happens to the employees? Permananent vacation?

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  3. Jacques Boucle

    This is all sophistry and gibberish. The primary function of government is to render service to the citizenry. Market forces should not be the preeminent economic concern of government or the sole driving force behind our economy . Market forces was instrumental in bring the USA to the Great Depression in the 1930s. It was widely believed that if the economy was left to market forces it would eventually correct itself and reach a state of equilibrium. The predicted state of equilibrium never came to fruition. Therefore, this is a specious argument the PM is trying to promote. It may appear to be sound and logical but beneath he is trying to promote blatant falsehoods, lies and stupidity. The PM believes in market fundamentalist theory that if everything is left to the market eventually it will correct itself. Nothing isn't more further than the truth. We need government intervention to stimulate the economy and not the abdication of responsibility through privatization. Privatization leads to higher prices of consumer goods and monopoly market.

    We can see through the facade of deceptions. The Prime Minister's agenda will bring us persistent poverty. Let us not sit idly by and allow the PM to inflict more pain on us. Let us resist his policies at all cost. RESIST!!!!

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  4. The following comment is non-partisan.

    Our nation, due to both parties, has inherited an unfortunate legacy of fiscal decisions and a management approach that has involved complicity.

    Now is not the time to point fingers.

    Now is the time to face up to something that we have mostly all been aware of for a while. We have been living beyond our means.

    Put another way, "there have been too many passengers on the train." Think about that in a broad socio-economic context.

    Like a spoiled teenager with an unrealistic sense of entitlement, there needs to be a reckoning.

    Will it be pretty? No,

    Will there be difficult conversations to be had? Yes.

    Will those that show both courage and leadership to talk about the proverbial "elephant in the room" be vilified by those of both sides that would prefer to instead "kick the can down the road" rather than being realistic and say "This is how it is, we need to talk."? Yes, absolutely.

    Independent of party, our fiscal situation has been, to be very trite, a festering boil that needs to be talked about. There is a hard discussion that needs to be had, lead by the courage and leadership to engage the population as is presently being done.

    Most families occasionally have intense discussions that, ultimately result in a re-affirmation of a common interest, mutual respect, and being future-forward. Now is that time.

    In conclusion, like or dislike whatever party, at the end of the day, we all play for the same team.

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  5. Statement:
    The Prime Minister then explained that the Saint Lucia National Trust has been advised to revise its business model to become financially independent.

    False:
    The Trust was never advised because there was never a meeting to discuss what they doing with their money or what their work programmes involve. Perhaps if there had been then you can talk about giving advice. Don't stand on outside and assume you know everything.

    Statement: “The Trust is charged with conserving the natural and cultural heritage of Saint Lucia,” Prime Minister Chastanet informed Parliament.

    True: Wow!!!! the word HERITAGE means something to the PM? I wonder if he knows the definition of it and what it means to a country's Eco-Tourism market?

    Statement: “It is an advocacy group and is responsible for developing the sites which have been vested in it.

    False: The Trust is a non-profit non government organisation established by and Act of Parliament to preserve and conserve Saint Lucia's patrimony for the enjoyment of present and FUTURE generations. Therefore it is not in the business of making money. Nonetheless the Trust has been able to implement an average of 3 projects per year with donor funds and to use one heritage site to maintain others in support of heritage and eco-tourism in Saint Lucia. Ask the other agencies what they have been doing to raise their own funds to support their work programmes. Their response will be uuuuhhhhmmmmmmm. Uhhhmmmmm, welllll we have been trying to uuuuhhhmmm do some stuff but so far we've had little success.

    Statement: The Government has supported the Trust through an annual subvention as well as through the vesting in the Trust, premier heritage sites. These valuable national assets can and should be leveraged to generate more significant revenue to sustain its operations, and thereby the Trust is being asked to revise its business model to become financially independent.

    False: Not everything is up for sale! How can you preserve and conserve something if you sell it all!!! Oh by the way Saint Lucians, there are properties that were given or donated to the Trust for the sole purpose of preserving the green space and restoring the land to prevent deforestation, land erosion and degradation which in the long run prevent your rivers from drying up!

    Statement: As a result, the annual subvention will be discontinued.

    False: The Trust was victimised because it refused to support the destruction of Pigeon Island, Makote Mangroves and Maria Island and it spoke out blatantly!

    Statement:
    However, the government will continue to provide support to initiatives the Government believes has merit in supporting the development objectives of the state.”

    False: Govt support can be should by having discussions with the National Trust and working together to find workable solutions which will support both the Govt projects and the SLNT. And having discussions on what can be cut back and if there is a cut back do so gradually and in consultation with the Trust and making recommendations on how the Trust can raise funds only after understanding what the Trust has been doing to raise it's own funds to complete it's work programme!

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  6. This man will decimate this country for years

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  7. When a company cannot grow its revenues cost cutting is the first move to improve. I support getting rid of non-producing entities and cutting subventions. I also believe there are too many ministers and we could save some money there. Sure you want to put your supporters to work regardless if they are best for the job but too many ministers. Perhaps you should get rid of some Permanent Secretaries and give those jobs to the junior ministers. We would achieve some cost savings there.

    We're burdened by obscene amounts of debt with no strategy to pay off. If an individuals goes to a bank seeking a loan, they would like to see how the debt will be paid off. The same standards should be held to Governments. This debt situation is ridiculous. Just take a look at Barbados. IMF is knocking at their door. Grenada went through it. Dominica and St. Kitts. You don't want IMF coming to take over a black man's country. Nothing good comes of it.

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    • Cost-cutting, yes. But not if the company has a growing fleet of workers which it MUST look after for decades. The company must then create more jobs with available resources.

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  8. All NGOS should be allowed to seek international funding which is available to them. They have a track record that can help fhem acquire the funding. Help the new school leavers get organized to start being trained for new business. They're the next set of innovators. They can't get funding externally. Be kind to us.

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    • I agree. What is good for the goose is good for the gander. Don't cut some agencies completely and ask them to fund themselves entirely and others are left with their full budget. Cut back gradually on everybody!

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  9. Tough decisions seriously but that call centre you will pay salaries for a year for the investors..pay water electricity cable internet just to say you provided more jobs.Are you serious PM ? Who you think you fooling with that crazy deal DSH...its coming wait for it..what you ew is what you reap

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    • are you serious?--most all businesses require salaries to be paid and need the basic necessities to function--fool

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      • Yes. These businesses pay the salaries of their workers. In this case it is the government of St. Lucia paying salaries and all utilities for the company.

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