Prime Minister presents Budget of hope - OPM
Prime Minister Hon Allen Chastanet
Prime Minister Honourable Allen Chastanet presented the 2020/2021 Appropriation Bill to the House on Tuesday under the theme “New challenges, new opportunities for building a stronger Saint Lucia, Together” taking an optimistic outlook at the plans for Saint Lucia’s continued growth and progress.
The Prime Minister and Minister for Finance spoke on Economic Recovery, gave a report on the last four years of the Government’s tenure and mapped the way forward for the country. The over three-hour delivery was packed with the Government’s detailed plans for the country and took into account the current COVID-19 pandemic.
The Prime Minister explained that in 2019 Saint Lucia had yet another year of positive growth of 1.7 percent driven by expansions in tourism, manufacturing and transportation.
The Prime Minister also announced that the unemployment rate continued to fall and at the end of the last quarter of 2019, the unemployment rate was 16.8 percent. Youth unemployment also decreased from an average rate of 36.3 percent in 2018 to 31.6 percent in 2019. Consumer price inflation was 0.5 percent in 2019 compared to 2.6 percent in 2018.
The Minister for Finance spoke to achievements and opportunities in various sectors including Agriculture, Road and Infrastructural Development, Social Services, Youth Development, Healthcare, Education, E-government Reforms, Culture and the Creative Industries, Security and Justice, Renewable Energy, Climate Change and Sports.
The Prime Minister’s Budget focused in on some key components of the Economic Recovery and Resilience Plan. The plan includes stimulating the economy, fast-tracking shovel-ready capital investment projects and strengthening social protection systems.
The Government will also focus on building resilience of productive sectors, health resilience, disaster risk and climate change.
The measures to stimulate the economy include the provision of US $3.1 million to provide grant assistance ranging from to $5,000 to $25,000 to micro and small enterprises, with a focus on food security and digital technologies.
The Prime Minister also spoke to the provision of low-cost financing to meet working capital requirements of SMEs affected by COVID-19 with an allocation of EC$5.0 million to benefit 350 people.
Landlords can also expect a 50 percent waiver of Commercial Property Taxes for the period 2019 or 2020 to landlords as long as they extend moratoriums of a minimum 20% of monthly rental charges for a period of three months, covering either April to June or July to September 2020.
“This is intended to support tenants affected by the slowdown in business activity,” stated the Prime Minister. “We have not forgotten those in rented accommodation. We propose offering a tax deduction to landlords of 20 percent of the monthly rental value for a period of six months. In effect, a tenant who pays a monthly rent of $1,000 may now have their rent reduced to $800 and the landlord can claim an amount of $200 per month for that period.”
There were other relief measures including a waiver of taxes on interest earnings of financial institutions from loans to microenterprises, the increase in the subsidy on bulk flour to bakers from $12 to $17 per bag, the waiver of duties and related charges on importation of personal hygiene supplies for the period July to December 2020.
The fast-tracking of shovel ready capital investment projects include the Hewanorra International Airport Redevelopment, St. Jude Hospital and the completion of the Respiratory Hospital. Other projects such as the West Coast Road Rehabilitation Project, Vieux Fort Water Redevelopment Project, the Disaster Vulnerability Reduction Project (DVRP) (e.g. Micoud Secondary School and Rehabilitation of selected Community Centres) will also be implemented.
“We anticipate that through implementation of these capital projects, a total of EC$396 million will be spent and between 1,500 and 2,000 jobs will be created, providing much-needed employment to persons who have lost their jobs, and stimulating the domestic economy,” stated the Prime Minister.
The Prime Minister also announced the waiver of import duties on building materials for Housing Development, reduction in electricity fuel surcharge to generate savings which will be used to reduce electricity bills of qualifying households by between $50.00 and $100.00 per month.
The Prime Minister also announced:
- Expansion of the Public Assistance Cash Transfer Programme from 2,600 households to 3,600 households
- Increase in the Child Disability Grant from $200 to $300
- Increase in the grant for Persons Living with HIV from $100 to $200
- Increase in the grant for children in Foster Care from $200 to $300
- Provision of Covid-19 hygiene care packages for the poor and vulnerable
- Micro-finance loans to households to diversify into micro small enterprise and cottage industries
- Small infrastructure projects within the Rural Community
The Prime Minister also announced duty-free concessions on vehicles for nurses, police officers, firemen and firewomen. The Medium-Term Development Strategy (MDTS) featured strongly in the Budget Address which spoke to the development of infrastructure, improving road connectivity, the Hewanorra International Airport (HIA), the Cul-de-Sac Bridge, water security and infrastructure such as the John Compton Dam Water Protection Project and The John Compton Dam Desilting Project, the Dennery North Water Supply Project and the Vieux Fort North Water Supply Project. The Castries redevelopment project and the development of Port Castries and the Vieux Fort Cruise Port.
Sustainable Health care was a key feature of the budget and the Prime Minister spoke to the completion of the St. Jude Hospital Reconstruction Project Hospital, Health systems strengthening, Upgrade of Health Sector-related Infrastructure, Health Care Financing, Housing Developments and land rationalization, to name a few.
There was a call by Prime Minister Chastanet to support local products more: “We must give as much support as possible to the products and services that are manufactured and provided by Saint Lucian businesses and corporations. We must support and buy Saint Lucian. Therefore, government, through the Ministry of Commerce, will be reactivating and doubling towards implementing a Buy Saint Lucia campaign aimed at stimulating the purchase of Saint Lucian goods and service by the public. The government itself, will lead by example and will be purchasing as much Saint Lucian goods and services as possible, as part of its strategy to stimulate domestic production and the manufacturing sector in particular.”
The Prime Minister spoke about Saint Lucia’s Debt Management Strategy and assured that the “Government’s approach to managing sovereign debt level ensures that our current and prospective debt do not compromise our ability to service our debt obligations and to generate economic growth in the country”.
In terms of financing the Budget for the Fiscal Year 2020-21 with the planned expenditure this year of $1.697 billion and projected revenue and grants totaling $1.126 billion, this leaves a financing gap of approximately $560 million, net of refunds.
“This will be financed as follows: Government debt Instruments—including bonds and Treasury Bills of $267.12 million; External Borrowing of $292.86 million,” explained Prime Minister Chastanet.
As the Prime Minister ended his Budget presentation he presented a message of hope, stating: “The transformation of our nation is not an overnight exercise. This is a journey that will take time . . . On this journey, we have encountered many communities of believers, and even more voices of positivity and hope, and they are boarding the bus of optimism, as they know where it is headed. They want to be part of this journey. We will not betray their confidence. We are not afraid. We are not alone. We are All In as we Build a Stronger Saint Lucia Together.”
Read the full Budget at: http://www.govt.lc/news/new-challenges-new-opportunities-to-continue-to-build-a-stronger-saint-lucia