Not all OTs required to send budget to UK – Dr. Smith
At a live broadcast from Carrot Bay last evening October 17, 2011, Leader of the Opposition, Dr. D. Orlando Smith said that it’s not true and that it applied only to other Overseas Territories who have had difficulties with their financial management.
“It is certainly not true that all the Overseas Territories are required to submit their budgets to the United Kingdom before it is passed. Bermuda is not required to submit before they pass it.”
“There are some other Overseas Territories who are required to submit their budgets to be vetted or reviewed by the United Kingdom and that is because there was financial difficulty with those countries and what I am also hearing the fact that it is now being suggested, that the British Virgin Islands should have their budget reviewed by the UK before it is passed in our legislature could only come because of our poor fiscal management,” Dr. Smith said, stating that the NDP was respected by the UK Government during their time in office and it is unlikely “if we had continued our policy that this would have been required”.
NDP claims borrowing guidelines were made public
Touching on the subject of the borrowing guidelines, former Minister for Finance during the NDP’s administration Ronnie Skelton, made it clear that in his budget address on December 13, 2005 he reported in the budget statement, which was a part of the Legislative Council records, that the NDP signed the borrowing guidelines and in the budget statement it outlined what those guidelines were all about.
Skelton said the borrowing guidelines have been around since 2005, and it is surprising to him that in 2011, the now Minister of Finance is saying it is the first time he is hearing about it.
“When we got into office in 2003, there were discussions with the previous government regarding these borrowing guidelines when we got there, based on revenues and expenditures, we negotiated with the British Government for something we think was reasonable for us to do here in this country.”
“Basically the borrowing guidelines set the parameters for which this country can borrow without getting the UK approval for borrowing, once you maintain certain ratios you can go about borrowing without UK approval. What has happened since then, it seems the present government has breached all of these guidelines so if they want to borrow an additional penny they have to go back to the UK to seek approval,” he pointed out.
According to Mr. Skelton, the borrowing guidelines give a lot of flexibility and “once we maintained 90 days of revenue to pay recurrent expenditure and our debt service was not more than 10 percent …we were within the borrowing guidelines and the total revenue borrowed could not be more than 80 percent of total revenue”.
Dr. Smith also reiterated that the borrowing guidelines were not signed in secret since it was made public during the budget address of 2005 where the legislature and the people were told adequately about it.
Since the disclosure that was made by Deputy Premier Dancia Penn QC in Parham Town at her launch on October 10, 2011 that the VI has been requested to send its budget to be reviewed by the UK two months before it is passed, there has been a back and forth on the campaign trail between the VIP and the NDP as to the reasons behind such a request.
On October 13, 2011 Dr. Smith had said that the UK’s request to see the VI’s budget was an indication that the VIP was spending recklessly.
During the Hon. Fahie’s launch on October 15, 2011 at Capoons Bay, Fahie had called the NDP’s comments “un-factual statements” and a misguided attempt to sway voters.
“Those who know better, should do better. The UK is currently stating to all Overseas Territories (OTs) that we heard earlier – not BVI alone – that they would like to see the budgets for each Territory two months before. The perception management bureau [the NDP] is now once again trying to mislead you my people with perception management. They are trying to convince you that it’s only the BVI has to do it!” Hon. Fahie had stated.
Premier O’Neal had also refuted the NDP’s claim, stating that it is not the VI alone who has to send their budget for review. The Premier had also said when Dr. Smith was the Chief Minister he had signed the borrowing guidelines with the UK which was never made public and it was when the VIP took office in 2007 that it was brought to Cabinet for approval and then tabled in the House of Assembly.
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