High recurrent expenditure a concern for VI Gov’t
Projected Revenue: $382.67M
Premier Wheatley, during his Budget Address given at the Sixth Sitting of the First Session of the Fifth House of Assembly (HoA) held at Eileene L. Parsons Auditorium, H. Lavity Stoutt Community College campus at Paraquita Bay on Tuesday, November 21, 2023, said the technical experts at the Ministry of Finance projected revenues to be $382.67M and added that some $360.24M is expected to come from receipt of taxes, $5.96M from grants and $16.47M from other revenue sources.
Recurrent Revenue vs Recurrent Expenditure
Dr Wheatley said in recent years the high cost of Government operations versus revenues collected leave very little room to finance capital projects, forcing the Government to rely heavily on loan funding for infrastructural projects.
“To illustrate, Madam Speaker, the average recurrent revenue for the last six years has been $364.05 million, but the average recurrent expenditure has been $351.26 million, leaving a surplus of just $12.98 million. This sounds like a lot of money, but this can only stretch so far when you consider that the average allocation for capital expenditure for the last six years has been $39.05 million – and that only covers a few major projects that are prioritised as urgent
A need to increase revenue
The Finance Minister said it is clear that there is a need to increase revenues and this includes exercising innovativeness to draw out more business from existing revenue streams while developing new ones.
“We also have to look at how we can lower the cost of Government operations without compromising the quality and efficiency of service, and ensuring that our public officers are justly and fairly compensated for their work,” Dr Wheatley added.
The Premier had emphasised in his budget address that approximately 41% of every dollar of government revenue raised, or $159.75M, will go towards compensation of Government employees and that approximately 24% of every dollar or $93.94M dollars will towards paying for the goods and services required for running the operations of government.
Meanwhile, Dr Wheatley announced that measures are being put in place to improve the efficiency and effectiveness of collecting revenues owed to the Government.
These, he said, include the electronic tax system known as Sigtas as well as pending policy decisions on good standing.
The National Budget presented for 2024 is $399,838,963.
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14 Responses to “High recurrent expenditure a concern for VI Gov’t”
It is of a truth that the infrastructure of the BVI needs urgent and careful attention. This need cannot be overlooked and must be address asap, even now. However the greatest service any government leaders can do, as employees of the people, is to manage ours entrusted finances into their care for the benefit of all the citizens. True democracy according to its founded principles is a system by and for the people, not only some, but rather all.
Give more to the poor
We should not any longer allowed the spirit of Party Politics cloud our minds from seeing our greater needs. Remember it is people that improve infrastructure developments and other needful life services in any community, not infrastructure developments and other services usurp the people's needs, especially those that are your employer, not excluding other that are living among us and those that are visiting the BVI.
2. Is the high recurrent expenditures due to a)poor fiscal policy and budget management, b) bloated civil service, c) poor organizing and planning, d) low productivity ( low productivity is expensive), e) low budget management efficiency, f) persistent over-price, poor constructed, and little value for money contracts, g) high dependency on government for direct employment, h) lack of a codified national development plan,etc?
3. Can government cut budgets without cutting services?
4. Should government mandate that all departments cut their budget by 10-15%?
5. Should government freeze all non essential travel?
6. Government force all departments to develop business plans with minimum performance standards?
7. Should government part ways with under performers who fail to show improvements after counseling and coaching?
8. Which politician, if any, except the ones leaving, will vote for trimming the bloated civil service?
9. Is the flawed Westminster system which forces government to put non-management personnel in management positions contributing to the high cost?
10. Is government promotion and embrace of the Peter Principle contributing to low productivity and increasing costs?
11. Why is Bermuda which smaller than the BVI, and Cayman Islands annual revenue hauls is in the billions but BVI’s is 50% less?
That said government can trim its personnel by a) instituting a hiring freeze save for essential personnel, b) incentivizing personnel to retire early, c) not filling vacancies created by resignations, retirements, firings,,etc., d) revamping and modernizing job descriptions, e) conduct an in-depth and comprehensive and independent civil service review.
Assuming a GDP for BVI of $1.2 billion and we are spending $160 million on civil servants salaries it means that we are spending over 13% of GDP on civil service salaries.
In turn that means 2 things,
1) we have a grossly inefficient civil service in comparison to the world average
2) if we could even get down to something like the world average we would have $70-80 million dollars per year for infrastructure products
All it takes to do that is the political will