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Nationwide May 06, 2006

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Nationwide May 06, 2006 Saint Lucia No. 136. Saturday, May 6, 2006 A publication of the Department of Information Services RENOVATED VICTORIAN ARCHITECTURE, BRAZIL ST., CASTRIES A section of the Soufriere-Vieux Fort Road “Take 2 ” - A fi fteen minute news review of the week. Government Notebook A fresh news package daily Every Friday at 6.15 p.m. on NTN, Cablevision Channel 2. on all local radio stations 2 Saint Lucia Saturday, May 6, 2006 THIS EDITION OF NATIONWIDE CONTINUES OUR SPECIAL COVERAGE OF THE 2006 – 2007 BUDGET PRESENTATION BY PRIME MINISTER AND MINISTER OF FINANCE DR. KENNY ANTHONY. THE FOLLOWING IS THE SECTION OF THE PRIME MINISTER’S SPEECH WHICH ADDRESSES THE QUESTION OF HOW GOVERNMENT WILL FINANCE THE COUNTRY’S FIRST BILLION DOLLAR BUDGET Now that the principal budgetary poli- This Government, Mr. Speaker, has al- which have been circulated to Honourable Honourable Members would also note cies have been outlined, I will proceed to ways erred on the side of caution in mak- Members. that work has commenced on Phase 1 of explain how the budget will be financed. ing projections of revenue and expendi- the Castries to Gros Islet Highway. This In formulating a budget, Mr Speaker, ture. We tend to be highly conservative Economic Service project, which covers the section of the we have the difficult task of striking the in our revenue estimates and as a result highway between Castries and Choc, will correct balance between taxes, expendi- tend to under-estimate. Conversely, our Agencies cause some discomfort to motorists. Once tures and debt. Our task is to ensure that precautionary approach leads us to over- The proposed allocation to the Eco- again, I plead for your patience and under- current and future generations are treated estimate recurrent expenditures. In many nomic Service Agencies is $682.1 million; standing as we seek to improve and widen fairly. At a minimum, current generations other countries the practice is the reverse 24.7 percent higher than the amount allo- this road network. On completion, traffic should be required to pay, via taxes, for and as a result those countries experience cated last year and 60.8 percent of the total congestion is expected to be relieved sig- the goods and services that they consume. fiscal problems. Given that Saint Lucia is budget. The amount allocated to recurrent nificantly. An allocation of $28.1 million We also believe that the current generation a highly vulnerable economy susceptible expenditure is $387.7 million, of which has been earmarked for this project. should contribute to investment as they are to shocks, our approach to forecasting is $180.5 million is for debt servicing and The Urban Renewal Programme, which also beneficiaries of the future growth that conservative and judicious. In order to see $40.9 million is for the payment of pen- was explained earlier in my presentation, is generated by that investment. We must the benefits of that practice, I shall review sions to retired public servants. will receive an allocation of $9.6 million. also ensure that we do not unduly burden last year’s fiscal performance against the I have also increased the capital allo- It is expected that the Tertiary Roads the future generation by increasing debt to planned budget. Programme, which entailed the rehabili- unsustainable levels. Mr. Speaker, last year I projected recur- cation to these agencies significantly by 36.2% to $294.4 million. This increase tation of 108 kilometres of road, will be We have, Mr. Speaker, carefully evaluat- rent revenue at $546.2 million. I indicated completed this year and a provision of that we had to be cautious because of the reflects, largely, the amounts required to ed the policy options and the policy trade- complete ongoing projects. just under $23.0 million is made for this offs and believe that we have come up with worrying trend of increasing oil prices. project. the optimal balance between policies that While oil prices did increase, Mr. Speaker, Additionally, Mr. Speaker, I have al- will contribute to sustaining growth while and we had to make some adjustments, I Cricket World Cup located $5.3 million towards community am now pleased to report that revenue in- at the same time ensuring that our debt re- Mr. Speaker, you would recall that it was infrastructure. take was $73 million or 13.4 percent higher mains sustainable. our intention to raise all the funds for the After spending significant sums of money than the actual forecast. This additional I shall now present the Budget Estimates Cricket World Cup Project in the last fis- to rehabilitate our roads, it is absolutely revenue has enabled us to meet our com- for the 2006-2007 fiscal year. cal year, given that I predicted that interest important that we develop a maintenance mitments to public servants in respect of rates were likely to increase. I am pleased plan to prevent a recurrence of this situ- The total planned level of expenditure new salaries and back-pay. More crucially, to say that this was the right decision as in- ation in the near future. In addition, Mr amounts to $1,121.5 million, represent- we have been able to reduce our borrowing terest rates have increased and are expect- Speaker, it is important that we reduce the ing an increase of 17.3 percent over the requirements. planned budgetary outlay in the 2005-2006 ed to continue to increase. The funding for damage caused by heavy goods vehicles. fiscal year. In effect, this is a 1.1 billion Mr. Speaker, I wish to emphasize that this project has been raised and we are in As a result, we have agreed to implement dollar budget. our sound fiscal management enabled us to effect re-budgeting the balance of the loan a motor vehicle weight control system. An pay the back-pay to public servants with- The details are as follows: (1) The funds, which amount to $42.8 million, to allocation of $1.5 million is earmarked for out having to resort to borrowing from the complete the upgrading of the Beausejour this initiative. planned level of recurrent expenditure, ex- banks or for that matter the Central Bank. clusive of amortisation, is $611.6 million, Cricket Ground and provide for the oper- Increased Allocation representing 54.5 percent of total planned In addition, Mr. Speaker, we had planned ating expenditures for the hosting of the expenditure, and is 2.9.8 percent higher to raise bonds of $189.6 million to finance matches. to the Tourism Sector than the previous year; (2) Debt amorti- the capital programme last year, of which The expansion of the Saint Lucia econ- sation is forecast at $88.5 million and ac- $56 million was earmarked for the Cricket Water Supply Infra- omy has been driven, in large part, by the counts for 7.9 percent of total planned ex- World Cup project. Given that we received tourism sector. This sector is now the en- penditure; (3) The planned level of capital more favourable rates from a bank than structure gine of growth of the economy and it is cru- expenditure is forecast to increase by 25.5 what we would have obtained from the cial that Government provides the requisite Regional Government Securities Market As indicated in my last budget presen- percent to $421.4 million and accounts for tation, Government has launched a major support. I propose therefore to increase the 37.6 percent of the total budget. This in- (RGSM), we decided to take a loan for overall allocation to this sector to $29.6 Cricket World Cup. This reduced our bond Water Infrastructure Improvement Pro- crease largely reflects the continuation of gramme, which is aimed at alleviating million. Of this amount, $25.8 million will ongoing capital projects and the re-budget- requirement to $133.6 million. However, be allocated to tourism marketing. given our excellent revenue performance the water shortage problem in the north ing of EU-grant financed projects, as fund- of the island. Honourable Members, I am ing was not received in the last fiscal year. Mr. Speaker, we only had to raise bonds of $100 million. Mr. Speaker, this is proof sure, would agree that this improvement Agriculture Diversifi- The sources of financing for the 2006- programme is critically needed as the de- that the financial stewardship of this coun- cation Programme 2007 Budget are as follows: (1) Recurrent try is in safe hands. velopment in the north continues apace. I Revenue of $621.6 million; (2) Capital would like, for the benefit of Honourable Revenue of $9.2 million; (3) Excess Rev- This year, Mr. Speaker, while we are Members, to restate the components of Sadly, Mr. Speaker, last year we could enue and the re-budgeting of bonds from projecting real GDP growth of 6.6 percent, this programme: (1) Upgrading the Roseau not implement the agriculture diversifica- fiscal year 2005-2006 of $16.0 million; (4) we are again going to err on the side of Dam Pumping Station; (2) Improving the tion programme because the anticipated re- Grant Funding of $76.5 million, of which caution and project revenue collections at raw water transmission between Vanard ceipt of Special Framework of Assistance $61.4 million is from the European Union; only $621.6 million, a mere $2.4 million and Sarot; (3) Upgrading the Theobalds (SFA) funds from the EU did not materi- (5) Previously approved Loan Funding of above last year’s actual collections. If our Water Treatment Plant; and (4) Upgrading alise. We are assured that most of the bu- $153.8 Million; (6) Previously approved real GDP growth materialises, as we have the Morne-Bocage Distribution Pipeline.
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