Fonseca explains why budgets get busted
As the clock ticks down to B-day on Friday, all eyes and ears will be on Belmopan for details of what is expected to be the Musa administration’s first “haad times” budget. One man who is intimately involved in matters of public sector finance is Ralph Fonseca, the current minister of Home Affairs and Investment and former Minister of Finance. This morning we asked Fonseca why Government expenditure always seems to exceed the amounts budgeted.
Ralph Fonseca, Minister of Home Affairs
?We live in a democracy. We have twenty-nine representatives. They are under tremendous pressures. There are certain circumstances when you start the year that you project based on those circumstances. Circumstances change during the year. For instance in 1998, we never expected that would have four hurricanes in three years. But we did and that cost us a billion dollars. We had to find the billion dollars or have Belize become a basket case. You don?t budget for a hurricane. When it comes along, you have to deal with it and you exceed your budget and then you try to explain it afterwards. There are many other circumstances. In the case of this year, we have the fuel situation, which is not just in the way of costing us more money, but it also affects revenue because in many cases we have to absorb the cost and the only way that we can absorb the cost if we bring down the taxes. When you bring down the taxes you get less money, but then you have to pay out more money for fuel. That?s an example.?
Janelle Chanona
?A great concern right now of the business community is that Government is specifically looking at business and sales tax for increases. Is the Government exploring different avenues as well to tally those fears?
Ralph Fonseca
?The Government is looking at everything as the Prime Minister has said. We are trying to make sure that whatever we do, it does not affect growth; that we still continue to grow the economy because growing the economy is the only way to alleviate poverty.?
Janelle Chanona
?How would you respond to Senator Hulse?s categorisation of closing the gate after the horses left the stable??
Ralph Fonseca
?Well, I think people misunderstood what he was saying there. He was saying that people will always say that and people will always say that because of evolution. You know at one time it depends on whether you came from Adam or Eve or you swung from one tree to the next. We have been proved significantly that it was an evolutionary process. It is the same thing with good governance. You improve as the pressures are put on you, as you find out where the problems are. When you are in Government you are so busy, you take lots of things for granted. You don?t realize that people are looking at things out there and saying why is this happening this way until they say so. Then when they say so, then you try to fix it of course because you want to win the next election. You have to be a crazy politician not to listen to the people. But most of us spend a lot of time giving speeches and then you ask for questions and there are no questions. Then something happens and people perceive it in a certain way and then all of sudden you have a stampede and they want to go another direction. Again, it?s a matter of balance. The evolution of democracy is like the evolution of us from where we came from.?
As a matter of clarification to our viewers regarding the “four hurricanes” referred to by Minister Fonseca, we feel compelled to point out that only three hurricanes threatened our shores between 1998 and 2001: Mitch, Keith and Iris. And while Keith and Iris did cause significant damage in Belize, Mitch, which veered south to Honduras, only produced strong waves which caused some coastal erosion and damage to piers. Tropical Storm Chantal, which hit us in August 2001, did cause some agricultural and infrastructural losses in the north, mostly due to flooding.
