EC$1.1 billion dollar budget for 2019

Prime Minister and Minister of Finance Dr. Keith Mitchell has presented another billion dollar budget for the fiscal year 2019 with no new tax measures.

Prime Minister and Minister of Finance Dr. Keith Mitchell as he makes his way to deliver the 2019 budget

Presented under the theme, “Building Resilience, Advancing Social Development and transforming our Economy”, the 2019 Estimates of Revenue and Expenditure were presented by

Prime Minister Mitchell to a joint sitting of the House at Parliament Building at Mt. Wheldale, St. George.

According to Dr. Mitchell, one billion, one hundred and thirty-four million, thirteen thousand, nine hundred and fifty-six dollars ($1.134,013,956.00) is sufficient for the sustenance of the economy in 2019.

The budget is comprised in the main of Recurrent Revenue: $780.4 million, Recurrent Expenditure: $637.8 million, Current Account Surplus: $142.7 million, Capital Expenditure: $196.4 million, Primary Surplus (after grants): $201.9 million, Overall Surplus (after grants): 129.9 million and Principal Repayments/Amortisation: $299.8 million.

The Prime Minister announced a small increase in the fiscal year for old persons on government relief.

• An increase in ex-gratia payments to a minimum of EC $350.00 commencing in January 2019. This would result in increased incomes for 280 persons.

• Commencing from the tax period 2019, Personal Income Tax would be reduced to 28% for income in excess of $5,000 per month. Similarly, Corporate Tax will be reduced to 28%.

According to PM Mitchell, this 2 percentage points reduction will obviously affect Government’s revenue collection, but more importantly, it will help to stimulate the local economy, putting more disposable income in the hands of workers and for companies, affording them extra capital to potentially re-invest and grow their respective businesses.

Dr. Mitchell also announced relief for claimants who would have secured judgments against Government over the years for various infractions.

He said that government is keen to finally settle these claims, some of which will be done posthumously.

He spoke of a US$30 million loan received by government on concessionary terms from the World Bank to help reduce the public debt.

PM Mitchell stated that a portion of the funds will be used to compensate claimants, including those whose claims pre-date his ruling New National Party (NNP) administration.

The 2019 budget was presented against the backdrop of a deteriorating industrial relations climate in the country as hundreds of public officers including teachers are into the third week of a strike on demands for their constitutionally protected 25% gratuity and pension payments.




PM Mitchell did not offer any solutions to the issue but hinted that only persons who were eligible to receive pension were those who would have been appointed on the permanent establishment on or after April 4, 1983 to February 22, 1985.

He did not make any mention to the 1998 Court of Appeal ruling of then OECS Chief Justice, Sir Dennis Byron in the Irvin McQueen VS PSC matter which restored pension to all qualified public officers regardless of when they joined the service.

Dr. Mitchell stated that in July, payments of EC $7.7 million were made to these persons to honour “our commitment to pension Restoration” and that “our efforts are now turned towards pension reform”.

He called for the Government Negotiating Team (GNT) led by Cabinet Secretary, Beryl Isaac and the leadership of the public sector trade unions to “continue the dialogue and work together to achieve a resolution that is in the best interest of our country and all its citizens” but based on affordability and sustainability.

He said: Government stands ready and willing to continue to engage the unions to determine the most fiscally-prudent pathway to address the post 1985 workers. We remain committed to offering the best possible package to workers within the context of the Fiscal Responsibility Law.

“Mr Speaker, acceding to the unions’ demands of 25% advanced payment of pension (gratuity) within the current construct, will cripple the country financially. It is simply not feasible given our current and projected revenue stream to meet these demands and furthermore to sustain them over the long term”, he added.

According to PM Mitchell, regional and international organisations have been cautioning that pension programmes must be managed carefully.

“…Mr. Speaker, we must be fiscally prudent with our decisions or we run the risk of undoing the tremendous gains we have made in recent years and lose considerable funding we have acquired through proven fiscal discipline”, he said.

The Prime Minister also informed the nation that government will not pay the striking workers for the days off the job.

He said: “…The issue of paying workers for the days on which industrial action was taken, is not just fiscally irresponsible but also morally bankrupt and politically unwise. Therefore,

Mr. Speaker, this Government cannot agree to such. Workers chose to withhold their labour, their unions should have a strike fund in place and should therefore be responsible for paying their lost wages. In other words Mr. Speaker, we fully agree that workers should be paid, just not by Government”.

Opposition Senator, Ron Redhead has dubbed the budget presentation as “fair” but raised issues with the tone used by Prime Minister Mitchell.

“I think I don’t like the tone used by the Prime Minister. I think it was inflamed. I don’t like the mention of the fiscal responsibility act as a means to determine whether or not we get resources, we don’t need an act to determine whether or not a country is going to get resources, we need to manage prudently and soundly”, he said.

Former NNP Senator, Devon Rachae told reporters after the presentation of the budget that he was pleased to hear the mention of skills development but was looking forward to see more focus on the scourge of sexual crimes.

“What stood out to me…is the estimates towards skills development. I think that is something that is very much needed. When we look at the employment rate …to really make the kind of dent that we would like to see…to get it to 10% or even lower, then it would be necessary to involve some type of skills. So the highlighting of plans to establish skill centres in various parishes that would train our people in furniture making, that would also train our people in uniform making, I think that’s one of the things that really stood out to me in the budget…”, he remarked.

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