Permanent Secretary in the Ministry of Finance, Timothy Antoine has sought to explain to the public what the two-year old Keith Mitchell administration has been doing with the extra million of dollars collected from increased taxes on the population.
Mitchell’s ruling New National Party (NNP) government has been boasting of increased revenue collection from the Structural Adjustment Programme (SAP) that it implemented with support from the Washington-based International Monetary Fund (IMF).
The opposition National Democratic Congress (NDC) has charged the regime of introducing 24 taxes, levies and increases in user fees for government services which have served to erode on the disposable income of the people.
According to Antoine, 70 cents of every dollar collected in taxes are being spent on wages, pension and debt repayment.
“I think people missed that, they missed that, that’s where the lion share of the money goes. Now something is wrong with that picture – 70 cents. Where is the money for Agriculture and Roads and so on? So one of the things this programme is trying to do is to reduce that, so what is 70 cents will become 50 cents and over time 40 and less in terms of what we spend but that is the lion’s share (of how the tax dollar is spent”, he said.
Antoine, regarded in some quarters as the defacto Minister of Finance of Grenada, disclosed that close to 27 million dollars of the monies collected were spent last year in back-pay to civil servants.
“We have done some (payments) in 2013 and then we did the balance in 2014. We asked – where the monies went? Back pay for public servants and I am happy for all of them, I am one of them.
“Where did the money go? Unpaid Claims, Unpaid Claims (came) down from 105 million dollars to 66.4 million dollars, private sector people who have been owed for years, who Government could not pay, who are now being paid and then we did some other things but I just want to give you a feel for where the money is going.
PS Antoine stated that the controversial sale of Grenadian passports through the Citizenship by Investment (CBI) programme was also bringing in a few million of dollars for the Mitchell government to spend from the Treasury.
He said the CBI, which has nothing to do with the IMF-backed Structural Adjustment Programme, allows them to do more on the Capital Expenditure side of the 2015 budget.
He indicated that the first 6 million dollars collected from the programme were spent in several areas.
“I know we spend on tourism marketing … we see tourism as a productive sector, as is agriculture, as is education and I mean education now in terms of SGU (St. George’s University) as an export (business)”, he said.
“… I know we spent money on the Small Business Development Business Fund, which as you know is aimed at giving people job creation possibility. So when you talking about giving more young people money to open a business that’s exactly what the Small Business Development Fund is intended to do,” he added.
Antoine disclosed that some of the collected funds were also spent on farm labour support.
In its most recent bulletin put out on Grenada, the IMF noted that although the island was collecting more revenue from increased taxation, however, “significant challenges still remain, as elevated unemployment, contracting credit, and large debt continue to weigh down the prospects for a faster and sustained recovery”.
Grenada has been saddled within the past decade by a massive national debt now standing at EC$2.5 billion and is currently engaging its international creditors to seek a “hair cut” on the millions owed to them.