Money talks! NDP Gov’t presents hour long $299,526,366 Budget for 2018
The 2018 Budget, which not surprisingly is below the 2017 Budget, is $299,526,366 and represents a 7.3% decrease from last year’s.
Premier Smith, emphasising that Government must have value for money for the people of the Territory, said the total recurrent expenditure is projected at $335, 391,200.
Capital expenditure, which will be focused on recovery projects, is estimated at $51.7M.
A significant portion of this expenditure will be spent on projects funded by the acquired Reconstruction and Rehabilitation Loans from the Caribbean Development Bank, aimed primarily at the rebuilding of schools, roads and water and sewerage infrastructure in the coming months.”
More details to follow.
16 Responses to “Money talks! NDP Gov’t presents hour long $299,526,366 Budget for 2018”
Clearly, government cannot spend money it does not have so how will the $54M deficit be made up? Is government estimating that it will take in significantly more revenue than projected? Will government have to borrow the $54M to make up the delta? Will the delta come from unreserved funds? Will a mid-year budget review be conducted and adjustments made as needed? Will vertical/horizontal cuts be initiated and if so what programmes/functions will be on the chopping block? Why government did not submit a balanced 3918 fiscal budget (expenditures=revenues)?
Moreover, in another commentary, the indications were that there wouldn’t be any tax increases for fiscal year 2018. This is welcome news for struggling residents in the wake of the hurricane disasters. The lion share of government revenue comes from taxes and fees so it is surprising given the need for more revenue for the recovery effort that taxes would not have been increased, if only nominally. Nonetheless, I will take a guess and assume that government is sacrificing revenues to promote more robust economic growth. At a certain overall tax level relative to GDP, revenue can be maximize but at growth expense.
Further, there appears to be a big disconnect between revenues and expenditures in the proposed 2018 budget. The projected revenues are $299,000,000.00 yet the proposed expenditures are $353, 000,0000.00 This equates to a deficit of $54,000,000.00. The big question is how will the $54, 000,000.00 deficit be adddress? Will government have to borrow $54,000,000.00 to make up the deficit? Deficit spending increases the national debt and this deficit will thrust and project the national debt upwards towards approximately $200, 000, 000.00. This number does not include the $721,000, 000.00 proposed 5-year hurricane recovery cost. Let’s not forget that the estimated recovery cost is $3, 600, 000, 000.00.
Moreover, the territory has to incur a mountain of debt to recover from the devastating hurricanes and grow the economy, sustaining the standard of living and quality of life. Nonetheless, revenue streams need to be identified to pay back the incurred debt. Taxes and fees will have to be increased to pay back the loans.
We must anticipate, expect and embrace this reality. There may not be a tax increase in 2018 but there will be in the following years; the BVI has no other means to fund the required borrowing. There will be no gain without the pain. It is a double body slam for BVI residents; they were blasted by the decimating hurricanes and now/future they have to incur and endure increase taxes to pay for the damages.
The coming months or years will be a huge challenge for the VI/BVI yet a grand once in a life time opportunity to rebuild for the future, for the next generations of Virgin Islanders. We have to plan, programme, budget.........etc to rebuild effectively with positive, long-term, long lasting outcomes. With this opportunity, we must realize/show value for money. Leh ve du dis ting rite mehson!
This is why the country is in turmoil. If I'm in power, I should hear the concern of the people negative or positive, and thenow make my decision after that.