Opposition Leader says SVG fiscal situation will only get worse

Leader of the Opposition Arnhim Eustace thinks that the 2016 Budget presented by Prime Minister Dr Ralph Gonsalves cannot meet its target of increasing economic growth, increasing jobs and will only make our fiscal situation worse.

In an unorthodox move, Eustace yesterday presented his response to the 2016{{more}} Budget, not in Parliament, but at the Frenches House in Kingstown.

The Opposition Leader, whose party continues to boycott Parliament in protest of the results of the 2015 General Elections, said that the Budget does not speak about certain revenue boosting initiatives, among them, exploiting Information and Communications Technology (ICT) and economic citizenship.

Eustace said that in St Kitts/Nevis last year, the economic citizenship programme earned that government EC$222 million. He said the programme in that country is well run and benefits a population of about 54,000 persons, less than half of this country’s populace.

“That’s what they get from that one programme and we have a deficit of $150 million,” stressed Eustace.

He noted that while the Prime Minister said that the central theme of the 2016 Budget was economic growth, job creation, zero hunger and fiscal consolidation, St Vincent and the Grenadines will achieve none of this through the EC$912 million budget.

“Over the past couple years, we have grown accustomed to Budget presentations in this country that have major deficits, cash deficits,” said Eustace, who thinks that to get out of the deficit, the Government’s financial situation must be moving in a certain direction.

Eustace said that despite all the talk about fiscal consolidation, a meaningful Budget must be more than talk, as when one looks at the Estimates, “we see the same old practices.”

He said that the Prime Minister claims he has enough revenue to cover the budget, but in fact, he is short by EC$151 million for 2016, short by EC$168 million in 2017 and short by EC$205 million in 2018, which is, “short of the amount of money needed to finance all the expenditures that the Government says it is going to make.

“If you are moving towards fiscal consolidation which he (the Prime Minister) says is one of the main aspects to be covered, then you started off on the same old foot that you had before. It is getting worse, not better,” said Eustace.

“…remember if you don’t have the money, you can’t do the things you are supposed to do and therefore you have to borrow or depend on somebody for a grant or you increase taxes as you have seen in this Budget,” noted the Opposition Leader.

Speaking to a number of his supporters, as well as one person wearing a red Unity Labour Party T-shirt at Frenches House, Eustace said that consecutively for 10 years, he has made these points over and over again and the Government does not listen or make any effort to deal with the issues.

He is of the opinion that persons sometimes ignore the Budget, as they may have problems understanding, but it is simpler than it sounds.

“We need EC$151 million in 2016 and we don’t have it…so we have to find EC$151 million and the lack of money means that promises made by government cannot be fulfilled…our people are being fooled year after year,” said Eustace.

He said that the money for capital projects, like building roads, is EC$100 million less than last year and that means a number of projects will not be done and therefore you cannot increase jobs and that was said to be one of the main focuses of the Budget.

“Let’s face it, for the last seven or eight years, this country had negative growth. For four consecutive years we did not grow, not even one per cent.” He noted that when we did grow, it was approximately 1.4 per cent growth, and in his opinion, that is shameful.

The Leader of the Opposition said that if we continue with deficits, we will continue to have problems with creating jobs and stimulating economic growth.

“…our debt, while not the worst in the region, is getting worse,” said the NDP president, who stated that the public debt on domestic side (money borrowed locally) is $646.6 million and externally, it is $864.5 million, taking the overall debt to $1.5 billion. He said that this means that we have loan payments of over $100 million a year and that does not include the PetroCaribe debt.

Eustace stated that the Bank of Nova Scotia reviewed the PetroCaribe situation and noted that the debt is some $27 billion in the Caribbean, while SVG has 3 per cent of that debt, some $900 million.

“If the bank of Nova Scotia is right, that means that our debt is not $1.5 billion, it is $2.34 billion, and that means that with a population of 109,000 people, that every man woman and child owes EC$21,950.”

Prime Minister Dr Ralph Gonsalves and Chief Executive Officer of St Vincent Electricity Services Ltd Thornley Myers are both adamant that the local PetroCaribe debt is not $900 million, but in the region of $160 million, the total cost of the fuel between 2006, when the initiative started and now, being about $340 million.

Eustace said that jobs cannot be created in this environment and while sometimes, one may feel a sense of losing hope, “you have to persevere.”

A number of other NDP parliamentarians also weighed in on the 2016 Budget presentation. Also addressing the gathering were representatives Godwin Friday and Roland Patel Matthews and senator Jules Ferdinand. The NDP’s budget response continues today at 4 p.m.(LC)