Cash deficit figures more than outlined in budget, says Eustace

According to the Leader of the Opposition, the cash deficit projected in the 2015 Budget is not EC$30 million – instead being closer to $142 million.

President of the New Democratic Party (NDP) Arnhim Eustace said that the Government’s estimated recurrent deficit is “technically{{more}} correct,” but does not give a true picture of the cash deficit.

“In addition to having these expenditures of $560 million, the Government also has to pay… the repayment of loans of $101.4 million, and sinking fund payments of nearly $13 million,” he explained, speaking in Parliament yesterday, January 29.

“We have to have the cash to pay those also in the coming Budget. So when you look at it on a cash basis… you are looking at about $142 – 143 million deficit.”

Eustace added: “I have long spoken about this… it is critical that all of us be very clear about this matter.”

The Opposition Leader questioned the Government on where this additional revenue is to be sourced; making sure to highlight that he was not expecting an easy solution, but rather urging them to recognise the gravity of the issue.

Eustace also questioned where the Government intends to get the monies needed to pay salaries, pensions, NIS, loans, and the various other necessary expenditures.

He further asserted that the other problem the Government faces is lacking the “implementation capacity” to deal with the issue of the cash deficit.

PetroCaribe

Additionally, Eustace heavily criticised the Government’s management of loans sourced through the PetroCaribe agreement with the government of Venezuela.

He said that instead of setting up two new companies to handle the monies, the Government should have brought said monies into a consolidated fund.

“We don’t know what these companies are really doing!”

The Opposition Leader chided the Government for not giving sufficient thought in the initial stages to the possibility of oil prices falling – as they are doing now.

Eustace insisted that with oil prices at less than US$50 per barrel, the Government would not be able to access the loan fund. This was refuted by Senator Luke Browne, who cited the PetroCaribe agreement signed between SVG and Venezuela.

“There is nothing in this agreement that says if the price of oil falls below $50 that there would be no loan component at all,” denied Browne.

“In fact, this agreement contemplates the price of oil dropping to up to below $15 – even at which point, the Government would be able to access loan funds.”

Eustace said that he would believe that only upon seeing the agreement for himself, and subsequently requested that the document be made a document of the House – which Speaker of the House Hendrick Alexander agreed to. (JSV)