UPDATE: Another $15M set aside for Reserve Fund in Budget
Contributions to the reserve fund, Dr. Smith announced, would be $15.5M. He told the HOA that, coupled with the Medium Term Fiscal Plan, contributions to the reserve fund form an important part of the Territory’s risk management and fiscal sustainability programme.
The National Democratic Party (NDP) government previously announced an intention of meeting a reserve fund goal of $100M by 2015, a direction that has been heavily and continuously criticised by Third District Representative Hon. Julian Fraser, RA.
As part of the over $300M budget given in his hour-long address at the Fourth Sitting of the Third Session of the Second House of Assembly (HOA), Premier Smith explained that $50,049,400 has been appropriated towards grants. Most of this, he related, has been set aside for statutory boards and government companies such as the BVI Tourist Board (BVITB), BVI Health Services Authority (BVIHSA) and BVI Airports Authority (BVIAA).
Capital acquisitions accounted for some $919,000 while funds set aside for capital development, exclusive of public-private partnerships, were in the region of $23M from debt financing.
According to Premier Smith, some $25M is expected to be directed towards capital development projects.
Outside of the budget and ‘well on the way towards resolution’, Dr Smith related, there is consolidation and refinancing at a lower rate of interest of over $80M of debt held by the Territory.
He said this would create more fiscal head room and borrowing can be done in order to finance much needed infrastructural development.
Dr. Smith told the House that government intends to begin funding the pension fund by way of providing funding for the National Health Insurance (NHI) Programme.
He remarked, “Ever pressing fiscal pressures have forced us to find alternative means of funding these two very important programmes.”
According to Dr Smith, the unfunded Pension liability carried by central government is approaching $300M.
“We have a solemn responsibility to address this issue once and for all,” Dr Smith told the House, “and to this end, we are currently examining ways in which to ensure that this very growing problem is addressed.”
Economic growth
Dr Smith related that it is anticipated that the Territory will return to an economic growth of approximately 1% in 2014. This, he noted, will be buttressed through increased investment in the physical infrastructure of the Territory through planned capital projects such as the Cruise Pier Development, the Terrance B. Lettsome Airport expansion project and the sewerage project among others.
He added that his government’s fiscal strategy for building the economy hinges on five main objectives.
He itemised these as including, building the reserve fund; managing contingent liabilities; improving the financial management structure within central government; improving the recurrent balance by implementing revenue generating and expenditure efficient initiatives and decreasing overall deficits in 2014 and 2015 and convert the deficits into an overall surplus by 2016; and finally, maintaining the borrowing ratios which have been outlined within the Protocols for Effective Financial Management.
See previous story posted earlier today, January 13, 2014:
Premier Smith announces $301M budget!
ROAD TOWN, Tortola, VI – Premier and Finance Minister Dr The Hon. D. Orlando Smith announced a budget in excess of $300M during his address in the Fourth Sitting of the Third Session of the Second House of Assembly (HOA) today, January 13, 2014.
Dr Smith told the HOA today that the budget projects a revenue of $301,746,000 with taxes being collected amounting to some 94 percent or $282,659,000 while the remaining 6 percent of $19,091,000 comes from other fees.
The Leader of Government Business related that expenditure accounts for some $248,349,500 with $180,730,100 of this amount will go towards wages and salaries. Projected revenues for last year were approximately $298,729,000.
He further disclosed that over $54M would be directed towards goods and services while approximately $10M would be put towards social benefits.
More details of the budget will be revealed shortly.
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11 Responses to “UPDATE: Another $15M set aside for Reserve Fund in Budget”
VINO, you all seem to be the leader in 'BREAKING NEWS' why won't you break the news about the real elephant in the room as it relates to the BVI economy? A country making $300Mil is spending more than half of it, $180 on salaries and wages? That doesn't even include rental of all the buildings scattered across the Territory. So it's safe to say we spend almost $200Mil just to operate our Government? And people still wondering what our biggest problem is, financially? Imagine how much money we would have to do major things, if we had a streamlined Government system. We argue about so many petty things daily but this, which is the biggest of them all, is pushed under the rug, while we blame nonsense on our state of affairs. Let's get serious man.
Plus we done pay off how many millions in unpaid debt ???? Like 40 million !!
All who saying that the NDP did well increasing the reserves need to understand that no matter who got into office in all over seas territories that the UK mandated that it had to be done.