Parliament approves increase in overdraft limit
November 1, 2013
Parliament approves increase in overdraft limit

Parliament has approved an increase in the overdraft limit of the Government of St Vincent and the Grenadines at local commercial banks, from $35 million to $50 million.{{more}}

On December 4, 2012, a resolution was passed in Parliament, authorizing that the Minister of Finance be able to borrow, by means of a fluctuating overdraft or otherwise, amounts not exceeding in the aggregate $35 million, from First Caribbean International Bank (CIBC), RBTT Bank Caribbean Limited, the Bank of Nova Scotia or the Bank of St Vincent and the Grenadines (BOSVG), during the period of January 1 to December 31, 2013, for the purpose of meeting current requirements of the Government.

However, Prime Minister Dr Ralph Gonsalves stated in Parliament on Tuesday that it has become necessary to increase the borrowing limit from $35 million to $50 million.

He said the motion to increase the limit indicates that the original overdraft limit for this particular period has proven to be inadequate to meet the central Government’s current obligations, due to certain developments which were not provided for in the 2013 budget.

The Prime Minister highlighted two of these major developments.

“First the increase in the debt services cost as a result of the…EC$200 million package for the international airport which … a significant amount was soft loans and I indicated at the time that there would be additional debt services,” Gonsalves said.

“This resolution will help to raise some monies…to assist in any debt services cost for this year. The second, of course, is the government’s decision to pay the outstanding 1.5 per cent salary increase due to the public servants. This is a commitment that I’ve been giving since 2008, when we had agreed for increases in 2009, 2010 and 2011”.

While the Opposition supported the passing of the resolution, Opposition Leader Arnhim Eustace stated that the only reason that he supports the increase of the overdraft limit is so that civil servants can receive monies owed to them. However, Eustace pointed out that it is the same persons who are receiving the money, who will have to repay the loan.

“Who is going to repay this money?” the Opposition Leader asked. “The same taxpayers we are going to pay it to, those who the Government owes. Those very persons who are receiving that money are the ones who will have to pay it back”.

Eustace also stated that the country is being run on deficit and that the Government is seeking to reduce the deficit by borrowing money. He stressed that this is a trend that must not continue.

“If we do not take steps to improve our financial management, our fiscal management, we’re going to get in deeper and deeper trouble,” Eustace said. (BK)