PM explains sixty million dollar hole in budget…
It was not the quarterly press conference but there was plenty economic information and more coming from the P.M. today at a budget consultation in Belize City. And the picture looks bleak. The Financial year begins on April first, and the budget for 2009/2010 is still on the drawing board but a draft report on it is out based on consultations held with relevant agencies. Despite the marked decrease in fuel and butane gas prices, the outlook is not as promising as was anticipated and the projects and promises to reduce the cost of living by the administration is still up in the air. But first PM Dean Barrow pointed to some of the key factors, which occurred in 2008, that led to a shortfall and a gaping crater in the budget.
Prime Minister Dean Barrow
“Shocks to the Belizean economy have arisen from three sources, one the two natural disasters of 2008; two, the slumping petroleum prices; and three, the economic and financial turmoil in the economies of our major trading partners. There has been a dramatic fall as well in government’s revenue collections from the flat tax on imported fuel and from the business tax and the royalties on domestically produced petroleum.”
“We had originally in the budget estimates last year put down something like ten million dollars as a kind of place holder for what we expected to get from the windfall tax and after the negotiations were completed we went back and we upped that figure to something like eighteen million dollars. That’s of course gone, never materialized. And then, with respect to the decrease in the revenues from the income tax and the royalties, we’re looking at a shortfall of something like thirteen million dollars; that’s on one end. Concomitantly, expenditure has increased as a natural progression but also because of some particular circumstances.”
“We also are committed to the continuation of, for example, the two million dollars that we had found for the most marginalized for the poorest of the poor by way of social assistance. That’s now an additional recurrent item to our budget. Kidney dialysis treatment is costing us a great deal of money. Altogether, were looking at a recurrent expenditure increase of around twenty-seven million dollars. So there’s that on one end and then there is the thirty odd million that we lose on the other end as a consequence of the non-materialization of the windfall tax and the fall in the taxes from domestically the produced petroleum and the royalties. There’s also naturally a decrease in the GST that we collect from the imported petroleum products. So ladies and gentlemen we clearly are confronting a major challenge, one that is going to require the kind of resourcefulness and ingenuity that I certainly am confident the Belizean people can muster.”
But with all the financial woes, Barrow says government was still able to pull off some significant accomplishments compared to the previous year. But that did not come by way of a single-handed effort; grant inflows from the Republics of China on Taiwan and Venezuela pulled the country up for the time being. But 2009, according to the P.M., will be no walk in the park as far as the recurrent budget and local capital projects are concerned. Barrow said government will have to find innovative ways of bridging a sixty million-dollar gap this year. It’s something Barrow admittedly told reporters, first jokingly, then on a more serious note, that he has some ideas of solving the problem by the time the budget is presented on February twenty-seventh.
Prime Minister Dean Barrow
“I haven’t quite figured it out yet but I assure you that by the time of the formal presentation of the budget I will have figured it out. I have some ideas but if I went into those ideas with you that would be telling and there would be no drama left for the time of the formal presentation so, on a very serious note, we are talking to various partners. We are looking at various strategies. As I said there’s going to be a mix of foreign assistance and perhaps some local borrowing, some domestic borrowing from the Central Bank but we will get it right by the time of the presentation of the budget. We’re looking at extra investment in things like tourism. We’ve just, as you know, signed on for the thirty million dollar loan from the I.D.B., we’re looking at extra investment in agriculture so that in terms of the productive sectors we expect to retool our efforts and be able to weather the storm and come out on the other end of the recession in good shape.”
Barrow said he will rely on the inflows Belize is getting from the C.D.B., the World Bank, the European Union and the I.D.B., monies that amount to around a hundred million dollars. And according to Barrow, the Taiwanese government has stepped up with the magic wand and has agreed to provide a four-year hundred million Belize dollar package which he intends to revise and increase. Barrow projects that education will likely get the largest share of the budget.
