Budget presentation says all is well

Today was that one day of every year that no matter which party is in power, no matter how empty our pockets or how dismal our prospects… disbelief is suspended and Belize is transformed into a land of endless plenty and unlimited potential … And in that respect 1998 was a vintage year for a budget presentation. Patrick Jones was in the press gallery in Belmopan.

Manuel Esquivel, Prime Minister

“The good sense of the people now reaps the reward that good sense can always expect. Because of their good sense employment is now growing, taxes are coming down, opportunities for growth are opening up, health care is improving, educational opportunities are more available, land is being distributed, homes are being built, exports are growing, tourism is seeing a new dawn, crime is better controlled, and production activities are expanding.”

In short, things couldn’t be better. In fact, the Prime Minister’s budget presentation this morning had few surprises. His review of Government’s fiscal performance over the last twelve months was upbeat: debt repayment was on schedule, the foreign reserves are at their highest in five years, exports are doing well and Government’s deficit is down to twelve point one million dollars. Then it was time to look to the future and in the middle of his presentation came what most people were expecting:

Manuel Esquivel

“By June of this year, legislation will be introduced to remove Value Added Tax charged on telephone service, thus reducing telephone charges to residential users by 15%. With regard to Corporation Tax, it is self evident that the current tax on profits motivates companies to minimize profits and encourages waste and inefficiency. We will therefore also be introducing legislation to abolish the 35% Company Tax, and replacing it with a simpler tax that rewards good business practices and greater efficiency.

The self employed in business will also receive a tax break. Non-company business will come under the same new tax regime as companies so owners of these businesses will not pay personal income tax. In addition, later this year at least 6,000 workers will be totally exempted from the payment of income tax. They will join the ranks of the 7,000 workers we have already exempted from income tax. This is in keeping with our goal of eventually abolishing personal income tax altogether.”

Despite the cheering from his fellow representatives, that so called “new and simpler” business tax sounds a lot like the dreaded G.R.T. But those are details that for the moment were lost on most of the audience. During the break the P.M. explained what he believes is the single most important economic achievement of his Government in the last five years.

Manuel Esquivel

“Up until 1994, the shortfalls in Government revenues had to be met by borrowing from the commercial banks in Belize. The effect of that is that the banks have less and less money to lend to the people and this caused a constriction in the availability of credit and therefore a drop in investment in the economy which then had a domino effect to everything that we have seen happening in the last few years.”

The Prime Minster said that the austerity measures imposed over the last few years have worked and that the four hundred and thirty two point one million dollar budget for fiscal year 1998-1999 is one his Government is proud of.

Manuel Esquivel

“Indeed because it is by no means profligate. It is quite a tight budget. It indicates that we are not engaging in some kind of wasteful election year budgeting but at the same time it is very people centered. It is a budget which is aimed at providing the goods and services that the people need. And hence in the speech I made reference in particular to things like water supplies, expansion of electricity, better roads better sanitary facilities, better educational facilities, we spoke about the school books which we are negotiating with the British. All of these things are directly targeted at people and in particular the poorer people of the country.”

The budget will be debated when the house meets next Thursday although it is doubtful that any opposition members will be present. Patrick Jones, for News Five.