The ruling New National Party (NNP) Government of Prime Minister, Dr. Keith Mitchell is boasting about “remarkable achievements and tremendous strides” in stabilising the nation’s economy, since taking office approximately two years ago.
Minister for Economic Development, Planning, Trade, Cooperatives and International Business, Oliver Joseph said “the country is on a path to sustainable development” as a result of the austerity measures implemented under the International Monetary Fund (IMF) supported Structural Adjustment Programme (SAP).
“We have seen that the measures that we have introduced under the Structural Adjustment Programme are working for the benefit of the people of Grenada”, said Minister Joseph in his presentation to Parliament last week Friday.
The cash-strapped Mitchell administration has introduced a number of taxes including a widening of the income tax threshold, hikes in Property Tax, as well as on a number of fees for government services provided to the public.
Minister Joseph told the Lower House sitting that Grenada’s “economy grew by 2.9% in 2014 and that “Government’s recurrent revenue and expenditure have been reduced by more than half.”
The Minister who was delivering his ministerial statement during the sitting of the House of Representatives recalled that when the NNP administration came back into office in February 2013, there was a fiscal gap of EC$18M.
“Right now Mr speaker, at the end of 2014 we dropped the deficit from EC$18M to EC$9M,” Minister Joseph told the House, pointing out that the “Inland Revenue Department (IRD) and Customs Department collected more revenue than what was budgeted.”
“This is the first time” that the major revenue earning departments performed so well, Minister Joseph claimed, noting that government has been able to “raise revenue” to meet its recurring spending needs.
He said Government, is using “the extra monies collected to ensure that all public officers remain employed.”
“We have seen over the last two years this government has been able to pay over EC$47 million in back pay and six percent increase. We have to be able to raise sufficient revenue to meet our recurrent expenditure,” he said, while adding that the former Congress government had to resolve “to the selling of Government assets to pay salaries.”
“Nobody gave us money to pay salaries…we have been able to do that…we increased revenue and cut back on expenditure,” he said.
Minister Joseph alluded to a downward trend in the millions outstanding in Unpaid Claims in the Treasury as another achievement of the NNP in the past two years in office.
He said that “at the end of 2014, the unpaid claims (monies that government is owing to local suppliers for goods and services) at the Treasury was reduced from EC$100 million to EC$66.4M, putting money in the hands of Grenadian suppliers.”
“When you have money in circulation and people spending more, businesses import more goods, consumers have more disposable income and government collect more taxes, you would see growth in the economy”, he added.
“That is what we achieved,” Minister Joseph stressed and attributed the achievements to the cost cutting measures implemented under SAP.
The Mitchell government is expected to introduce a few more taxes in the 2016 Budget to be presented in Parliament towards year-end as part of its Letter of Intent signed with the IMF to govern the operation of the Structural Adjustment Programme (SAP).