A Closer Look at the 2017-2018 Budget

News Five has begun its review of the 2017-2018 General Revenue and Appropriations Bill, also known as the Budget, which is scheduled to be debated on the second reading on Thursday, March twenty-third and Friday, March twenty-fourth. The Government of Belize is projecting a primary surplus for the first time in several years of just under seven million dollars, but it is immediately wiped out by payments for loans including the B.T.L. settlement and the recently re-negotiated Superbond. Tax increases of eighty million dollars including an addition in G.S.T. to electricity bills above one hundred dollars are joined by cuts in expenditure to several major Ministries. Aaron Humes reports.

Aaron Humes, Reporting

The Government of Belize is planning to spend nearly six percent less in expenditure, about fifty-nine million dollars less, and collect close to a hundred and nine million dollars more in overall revenue than last year’s figures in the Budget, subject to approval by the National Assembly. Those cuts can be seen in such Ministries as Foreign Affairs and Health, although the cost of pharmaceuticals as debated in the House has not been substantially affected. On the flip side, Housing and Urban Development has been allocated close to a million dollars and Works went up by ten million, as did Education and Finance, typically the two largest Ministries in the Budget calculations. When the Government typically spends more than it earns, people are legitimately sceptical that the surplus can be defended; especially considering that almost a hundred and fifty million dollars is needed to finance the budget, especially for repayments on loans. Prime Minister Dean Barrow assured reporters on Monday that the calculations are legitimate and that economic recovery is underway.

Dean Barrow

Prime Minister Dean Barrow

“Unfortunately, we are going to be moving to the surplus that we are projecting, because of course we’ve had to engage in very painful cost cutting measures and the revenue raising measures. That’s the long and short of it.  There is clearly going to be a bounce-back in terms of agriculture as we tried to set out, so we are perfectly certain that our projections are legitimate.”

Of the eighty million due in taxes, about twenty-eight million will come from adjusting the excise levy on aerated water (soft drinks and carbonated water to you and me), beer and stout, cement and fuel; and a further fifteen million from a one percent increase in environmental charge on imported goods. But while many will complain about the lowering of the tax threshold adding a further sum of General Sales Tax to electricity bills above one hundred dollars, for instance, the Prime Minister says this is mild compared to other possible measures involving that tax.

Prime Minister Dean Barrow

“We wanted to do our very best to avoid – and we did so manage – anything like increase in business tax; anything like a rollback of the exemption threshold for income tax so the middle class wouldn’t suffer; we were determined we would not raise the rate of G.S.T., or in fact, get rid of the zero-rated categories. Also we would not get rid of the exempt categories – because the producers, the productive sector, the agriculturalists, depend on those exemptions and their ability to claim back for the input. So we did the very best we can; we thought about this long and hard; there is no doubt that we are increasing taxes, but we have tried to pick our spots. The one that I most regret, of course, is fuel; but again, you will see that notwithstanding the pact with OPEC, shale production is on the increase in the States and so prices are coming down. So we thought that people would be able to absorb this.”

After a delay, the final portion of the salary adjustment for teachers and public officers goes into effect with this Budget. It was the issue that drove the former to the streets for eleven days and gave the Government much pause for soul-searching. But Prime Minister Barrow is not about to take the adjustment back despite concerns from those who feel they do not deserve it – and whose tax revenues pay for it. He was careful to respond to the question, saying that the public officers are showing a case for improvement, but there is a question for the teachers that they must answer.

Prime Minister Dean Barrow

“It is a point of view; it’s not my point of view.”

Reporter

“It cannot be your point of view, because you are in the business of winning elections.”

Prime Minister Dean Barrow

“(Laughing) Indeed, sir; well, not anymore, you know, not anymore, not anymore. But, look: I prefer to think that certainly in terms of the public officers, with whom I am principally concerned, that a good faith effort is being made by the public officers to curtail costs, to cut expenses, to ensure that there is not the kind of wastage in terms of electricity and fuel and telephone that we are accustomed to seeing. With respect to the teachers, I suppose there is an argument to be made in terms of our less-than-stellar results in terms of things like the P.S.E. are a consequence of the children not being as bright as when you were going to school, sir, and I don’t accept for a moment that that can be the case but that argument can be put up – it is a choice between that and the version or the opinion that you offered, that maybe the teachers are not cutting it. I’m not going to get into that; let the Minister of Education speak to that. The fact is they are there and I don’t see how we can be retrenching teachers.”

But can the Government convince others, such as Leader of the Opposition John Briceño, who will lead off next week’s debate?

John Briceño

John Briceño, Leader of the Opposition

“There’s nothing new in the Budget; there’s no innovation in the Budget – the same empty Barrow promises; capital expenditures, which is really the investment in a country, has been cut dramatically. So, while I wish we could see something better, I am not surprised by the Prime Minister’s bogus budget.”

Aaron Humes reporting for News Five.