Higher spend

. . . but mainly to support debt servicing and state transfers

The Freundel Stuart administration is projecting $4.5 billion in spending for the financial year 2017-2018, up from $4.3 billion last year, with a whopping $1.8 billion set to go towards repayment of principal and interest on Government’s outstanding loans.

Despite all the recent talk of privatization and the need for Government to sell-off state assets, a further $1.1 billion has been put aside for in the coming this year, which begins on April 1, in support of statutory entities which are the main beneficiaries of state transfers.

In fact, only a meagre 2.5 per cent —  or $29.3 million — has been trimmed from these allocations, even though the Stuart Government remains hard-pressed to find much-needed revenue to support an overall economic turnaround on the back of last week’s downgrade by international ratings agency Standard & Poor’s — its 18th since the Democratic Labour Party took office nine years ago.

However, amid worries about its dwindling foreign reserves which fell below the standard 12 weeks of import cover to less than $700 million in December, Government’s earnings continue to fall short of requirements.

This coming year state revenues are projected to reach $2.9 billion — up slightly from fiscal 2016/2017 — but this will still not be enough erase to the running deficit, which, based on the Estimates of Expenditure and Revenue, which were laid in Parliament Tuesday by Minister of Finance Chris Sinckler, is due to decline to $422 million or 4.4 per cent of GDP.

Last year Government had projected an overall deficit of five per cent of GDP (based on accrual reporting). However, up to last week, Sinckler was still reporting a shortfall in the order of eight per cent of GDP, which he was hoping to get down to 5.5 per cent of GDP in the short term.

Interestingly no provision has been made for any increase in salaries, even though public sector unions have been clamouring for such a hike. However,Government will be seeking to take forward promised payments to policyholders and investors in CLICO International Life and British American Insurance Company Limited, with a provision in this year’s Estimates for $25 million in payments for CLICO and a further $4.96 million for BAICO.

However, it was not immediately clear how the monies would be allocated even though Sinckler had earlier promised to bring the matter to a final conclusion for those who were left in the lurch following the collapse of CLICO and BAICO’s Trinidad-based parent company – CL Financial –  back in 2009.

This year’s Estimates also make provision for a large subvention of $146.3 million to the state-run Queen Elizabeth Hospital — the same allocation that was made in fiscal year 2016-2017. The sum of $12 million is to be provided again this year to the Barbados Drug Service for the purchase of drugs, while the Welfare Department is also to receive another $19 million in this year’s Estimates.

The vital tourism sector is also guaranteed strong fiscal support based on an allocation of $87.7 million (which is down slightly from $89.9 million) to the Barbados Tourism Marketing Inc. and a further $8.6 million to the Barbados Tourism Product Authority, which was previously allocated $9.1 million. This has nothing to do with the $45.9 million, which has been provided for the redevelopment of Sam Lord’s Castle, which is nearly half of the $80 million budget that was attached to its transformation into a high-end Wyndham during fiscal year 2016-2017.

The Estimates also include $15 million for road rehabilitation and the same amount for externally funded Barbados Water Authority projects.

In the meantime, grant funding in the amount of $15 million is to be received as budgetary support and to assist Government in carrying out renewable energy programmes, refurbishment of the gymnasium and higher education development projects.

Under the head of education, the subvention to the University of the West Indies remains fixed at $71.3 million, while the Ministry of Education’s Skills for the Future programme is assured of $11 million this year.

A current subvention of $26.6 million and a capital subvention of $2.4 million have been provided to the Sanitation Service Authority which was allocated $29.6 million last year; while $13.5 million will go to the Public Sector Smart Energy Programme, up from $11.5 million.

8 Responses to Higher spend

  1. Don Keyote March 8, 2017 at 6:19 am

    What? No allocation to the Transport Board? Murdah! De pensioners gine have to walk??????

    I wonder how the Government planning to finance the TB. Don’t tell me they increasing bus fares.

    Or maybe they selling it to the Alliance.

    Reply
  2. Tony Webster March 8, 2017 at 6:25 am

    S.O.E.’s: seemed like a “Good Idea At The Time”: made life a lot (A LOT) easier for harried ministers and P.S’s; “concentrated efforts at points where it mattered; gave specific folks specific tasks; engendered initiatves via their boards/ supervisroy bodies. All this however, based on presumtion that there would still be periodic reporting to Relevant Minister; financial probity, and audited, finacial statements rendered to minister, and Parliament; attention to Auditor-Generals reports.

    However, all this predicated on a few things that CANNOT de divorced from Relevant Minister: –
    1. Competent top-down policy direction, and regular overview, based on verified facts.
    2. Ministerial responsibility for placing roundpegs, in round holes, both at Board level, and in the engine-rooms of all the S.O.E.’s. Alternatively, in plugging holes, including those holes, and cheque-books, which now a bit further removed from Big Desk.

    What we have now, is delegated authority gone mad, sans the essential retained responsibility at the top. The SIXTY-THREE (63) little brats, have snatched the real power from where it formerly resided at the ministers’ desks…and they all keep calling for more $tuff, or else their public service (!) suffers, and political fallout is only avoided, by hooking them up to the M.O.F.’s fiscal I.V. drip…..mo’ and mo’ dollars. The trumpeteed $100M cut in “transfers” to these out-of-control kids…just will not happen…and “supplementaries”, will continue to flow.

    Bets?

    Reply
  3. Richard Johnston March 8, 2017 at 8:32 am

    How much of the $200 million increase is attributable to greater cost of funding the debt?

    Reply
  4. Ossie Moore March 8, 2017 at 9:24 am

    Hmmmm. No mention of tackling recurrent expenditure where wages and salaries make up the largest porion. One would think that with 10%+ unemplyment that the market would dictate lower wages but no we actually saw an increase in Salary for mambers of Parliament. The How very interesting

    Reply
  5. hcalndre March 8, 2017 at 11:44 am

    I heard a lot of the DLP supporters asking the opposition what are they going to do for them? what I`m getting is that they are quite contented with the promises the DLP made and they ready to give them another 5 years. Why are they not asking the DLP why they have not delivered on any of the promises that was told to them and never delivered. First on the agender for the BLP is to get country out of the financial bottomless pit that will be left by DEM. All who are satisfied with the DEMs., tell them what a great 8 years they enjoyed under Stewart`s leadership and vote for them again.

    Reply
  6. Bajan March 8, 2017 at 11:50 am

    Twenty five Million Dollars for CLICO payments! The government has missed the real issues surrounding CLICO. They need to consider the Allen Stanford situation and use it as a model to go after CLICO as there are similarities between the two. However, the difference is the approach that the US government took with Allen Stanford and the approach that CARICOM governments are taking with CLICO.

    The USA Justice Department choose to investigate Allen Stanford’s management of people’s investments as a crime. Several Federal agencies including the US Security and Exchange Commission, The FBI and others, investigated his business dealings from every conceivable criminal angle including money laundering and fraud. The Justice Department built a solid case and successfully prosecuted Mr Stanford and his businesses. He is in prison for life now and restitution is being sought for his investor victims.

    On comparison, the CARICOM governments facing suspicious business practices of CLICO, choose to treat the issue as if dealing with a financial institution in crisis and they dumped millions of tax payers dollars into CLICO to keep it alive. A few of the CARICOM government departments responsible for regulating or conducting investigations into such matters have requested assistance from their respective local Police and Directors of Public Prosecutions, none of whom, are capable of conducting investigations of such magnitude. As far as we know, not one of them has requested the assistance of the US Justice Department, Scotland Yard or Canadian Mounted Police, all of whom have the experience, the resources and more importantly the international influence to conduct an investigation of this magnitude and complexity.

    An important question is where did the money go and what was it used for? Since it is now officially confirmed that Trinidad has strong active ties to ISIS and terorism and that persons and organizations in that country are funding these terrorist groups, how can one be sure that the money, or at least some of it, was not being used to fund terrorist activities overseas? Yet another reason why the CARICOM governments should have exercised better judgement and demanded a full criminal investigation, led by an international law enforcement agency, into the financial activities of CLICO. Follow the money!

    My advice to the policyholders. If there is any evidence that CLICO or any of its directors had business dealings in the USA or its protectorates (eg. living in the USA, bought a house, enrolled their children in college, medical treatment, business interests, have stocks of a US traded company, bank accounts etc.), you should consider lodging a criminal complaint with the US Justice Department. The affected CARICOM governments have demonstrated that they lack the political motivation to have CLICO properly investigated for criminal culpability. Remember, the government is not the victim per se in this matter. YOU the policyholders are and you don’t have to wait on the government to represent your collective interest. Follow the money!

    Reply
  7. Mr. Crowley March 8, 2017 at 12:15 pm

    Good read Bajan. However, the average Bajan/Caricom national is not nearly sophisticated to follow advice

    Reply
  8. Twister March 8, 2017 at 2:49 pm

    At least I hope i get my money

    Reply

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