Faced with declining revenue, the new Keith Mitchell-led New National Party (NNP) government in Grenada has announced a series of measures aimed at curbing the island’s expenditure budget.
The measures were announced by Prime Minister Mitchell in his capacity as Minister of Finance when he delivered on Tuesday the 2013 budget to the House of Representatives at the Trade Center at Grand Anse, St. George’s.
According to Dr. Mitchell, the Ministry of Foreign Affairs will see a drastic reduction in its budget which will be cut by a whopping 28%, and the government expects to see savings in electricity costs at the Ministerial Complex and through greater control on the use of State vehicles.
The Prime Minister also disclosed some of the measures to be adopted by his two-month old administration to raise revenue for the island.
Following are excerpts from the Budget speech:
Expenditure Reduction Measures
Through resolute action, we have cut over $60.0 million from the recurrent budget in 2013.
This is the first installment in our expenditure reduction or waste reduction drive given the limited time that we have had to complete this exercise.
The recently appointed Waste Reduction Commission will continue this effort and monitor implementation.
Let me share some of the specific measures taken: On my directive, each ministry and department was asked to cut non-personnel expenditure by at least 20 percent over 2012 spending.
However, we were careful however not to cut spending on medication for our hospitals. In fact, that spending has increased. We have moved to rationalize rentals for government offices. This measure will save approximately $1.0 million in 2013.
We have cut the budget for Overseas Travel by 20% from its 2012 level. Mr. Speaker, only essential travel will be undertaken. Unlike the previous Administration, there will be no globetrotting by this NNP Administration.
The budget of the Ministry of Foreign Affairs has been cut by 28 percent thereby returning it to its 2008 levels.
Through a combination of more joint representation with the OECS such as in Brussels, private sector support for London and the use of non-resident ambassadors and honorary consuls, the cost of our diplomatic service will be managed to reflect our fiscal constraints but configured to deliver our foreign policy and development objectives.
Cabinet will soon announce a policy on private sector support for overseas missions. We have installed LED light fixtures, supplied by the People’s Republic of China, in the Financial Complex.
The next area of focus will be the Customs and Excise to be followed by the Ministry of Education and the Ministerial Complex. Government expects to reduce its electricity consumption by at least 30% and save $9.6 million per year.
We have implemented the new mobile telecommunications plan which will cut our expenditure on mobile telecommunications by at least 40%.
Effective immediately, Government will implement a freeze on net hiring – this will save an additional $8.0 million.
A major challenge for Government is how we manage the payroll going forward, which accounts for close to 65% when we include Pensions and Gratuities.
As it stood, Government would have had to find an additional $38.0 million to meet payroll requirements in 2013 – an impossible task.
In this regard, our Government commenced dialogue with the Public Workers Union, Grenada Union of Teachers and Technical and Allied Workers Union on the shared sacrifices required at this time.
Finally, we are moving swiftly to procure and install an Electronic Tracking System (GPS) for all government vehicles. This technology is already used locally by some private sector entities.
Given the history of abuse of Government vehicles coupled with the fact that Government owns the largest fleet of vehicles, such a system is fully justified and long overdue. It will result in millions of dollars in savings on fuel and maintenance.