PM confident in face of economic challenges

Vincentians can expect the 2011 Estimates to be crafted within the context of the challenging economic times.{{more}}

Prime Minister Dr Ralph Gonsalves, speaking at a press conference on Monday, January 17, said that the challenges associated with the global and regional economic issues and the additional problems with CLICO and British American all provided “a challenging context.”

But, in light of the continued challenging times, Gonsalves said that he is confident that he will be able to, once again, deal with the difficult circumstances.

“In the same manner in which we dealt with a difficult circumstance last year, we will do so again this year and I am quite confident that our successful navigation of the stormy economic waters last year, that will again happen this year,” the prime minister said.

“Last year, we went to Parliament with a budget deficit on the current account of $20.5 million. As it turned out, we had been able to hold tight and we didn’t run a deficit,” he explained, adding that the government made a saving.

He, however, warned that the country was not completely “out of the woods”, as the road to economic recovery was “uneven and haltering.”

And while there was pressure on the Eurozone, Gonsalves said that countries such as Brazil, China, India and Russia were experiencing “expansive growth’, but that these were not areas where we got our tourists or remittances from, nor are they nations with whom we trade our goods.

“This year will have additional expenditures, because Tomas is taking more money from us this year and I have to strengthen the social safety net for the poor, the working people and the marginalized,” Gonsalves said.

This was evident in the $4 million paid out to those in public assistance, the prime minister said.

He did, however, clear the air-that there was not going to be an increase in the Value Added Tax (VAT), as was being speculated.

“We are not increasing it,” PM Gonsalves declared.

“People are going about saying that I [am] going to increase VAT, because there has been an increase in England from 17.5 to 20 percent, St Kitts is 17.5 percent and Barbados increased from 15 to 17.5 percent.”

The prime minister said that it was quite the opposite, in that when the new tax was first implemented back in November 2007, a promise was made to reduce or remove VAT on a number of commodities, so that they would become zero-rated or exempted.

Gonsalves contended that there were, in fact, hundreds of goods and services which were already zero-rated. (DD)