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LEGISLATIVE COUNCIL OF THE VIRGIN ISLANDS
BUDGET ADDRESS 2004 “Empowering Our People”
by the
Honourable Ronnie W.Skelton
Minister of Finance and Economics Development
Minister of Health and Welfare
Delivered on: 22 December ,2003
INTRODUCTION
- Madam Speaker, I move that the Bill shortly entitled “The Appropriation
Bill 2004”, be read a second time, and in so doing, I crave the indulgence of
this Honourable House in permitting me to read this Government’s Budget
Address.
- Madam Speaker, when this Government was elected by the people of the
British Virgin Islands we made a solemn pledge before the citizens of this
Territory: to ensure value for taxpayers’ money, to bring new focus and energy
toward growing our economy, and, above all, to give our people the tools they
need to realize their fullest potential. This commitment has been and will
continue to be the fundamental principle guiding our policies and our
priorities.
- Madam Speaker, as you are aware, I was entrusted with the portfolio of
Finance. This challenge I have assumed with determination and humility,
mindful of the fact that divine providence is that of The Almighty and His
alone.
- Madam Speaker, it is the duty of any Minister of Finance to use the
resources of the country to improve the lives, increase the prosperity and
maximize the happiness and well-being of the people. Madam Speaker, it is an
awesome responsibility; and it is this Government’s highest resolve. This
Government will work to ensure that all persons working and living in these
islands share in the benefits of our Territory’s good fortunes. We know that
our greatest natural resource is our people therefore, the most important step
we can take toward future prosperity is to empower them to achieve. That means
opening the doors of opportunity for all. It also means demanding that all
share equitably in shouldering their rightful responsibilities. In other
words, Madam Speaker, equal treatment for all, special privilege for none, and
no district will be left behind.
A Global Perspective
- Before getting into the details of the proposed budget, Madam Speaker, it
is worth taking a moment to review the major global developments that have
impacted our economy and to look ahead to the conditions we can expect in the
coming year.
- The year 2003 began with uncertain prospects for the economies of the
World’s developed nations. This was based on a number of factors, chief among
these were instability and conflict in the Middle East, the hovering threat of
terrorism and the lingering effects of the U.S. recession and global economic
slowdown of the past two years.
- Despite these challenges the economies of the developed world, led by the
United States, are showing clear signs of recovery. As this year draws to a
close, there are good indications of a much more optimistic outlook for
2004.
- Expansionary monetary and fiscal policies facilitated a robust recovery of
economic activity in the United States, which has now experienced two
consecutive quarters of impressive growth. The U.S. stock market is on the
rebound with the Dow Jones once again back above the 10,000 level. Markets and
economies around the world are beginning to respond in kind.
- To be sure, the global economy still faces some real challenges. The
United States still maintains important imbalances in its external accounts
with its currency (the US Dollar) losing ground to most major currencies.
Coupled with this is a growing deficit in the American Government’s finances
that threatens to widen as a result of the Iraq conflict. The European
economic performance appears to be improving, albeit at a slower pace than
anticipated. Latin America continues to experience negative growth reflecting
adverse international financial conditions, the lack of dynamism in the United
States’ economy and the unfavourable evolution in the terms of trade.
- Madam Speaker, taken as a whole, most experts are cautiously optimistic
that 2004 will be a year of growth in the global economy. We share in this
optimism; and we are confident that our Territory is well positioned to
benefit from this rising tide. But even as we look to the opportunities ahead,
we must also be cognizant that the defining feature of the modern global
economy is rapid change and sometimes this change is unpredictable.
- Madam Speaker, new technologies have brought us closer together than ever
before. They have opened the door to new opportunities, and they have also
created an unprecedented level of competition. In this rapidly changing world
the single most important rule is adapt or pay the consequences.
Whether one is speaking of a nation, a corporation or an international
institution, failure to anticipate these developments or failure to respond
swiftly will destroy these organizations. Madam Speaker, the situation in the
BVI is no different. As a matter of fact, given our small size and open
economy, the challenge of coping with and managing change is an even greater
imperative. This Administration is committed to making sure that the British
Virgin Islands is equipped to rise to the challenges of the new and
fast-changing global economy.
- Madam Speaker, one of the most important changes that we see on the
horizon stems from developments in the arena of international trade
negotiations. We live in an era in which the Monterey Conference and its
aftermath, the follow-up of the Doha ministerial meeting, and the
implementation of new frameworks underlying preferential trade arrangements
have all conspired to shape international negotiations.
- The recent collapse of the World Trade Organization (WTO) trade talks in
Cancun due to the failure of developed countries to recognize the concerns of
developing countries, such as debt relief and greater protection for Small
Island Developing States (SIDS), suggests a potential threat to territories
such as the British Virgin Islands. We must recognize these threats and
prepare ourselves to respond accordingly.
Domestic Economic Events and
Performance
- While we keep a vigilant eye on the international scene, on the domestic
front, Madam Speaker, we see reasons for real optimism. The fundamentals of
our economy are sound and the enterprise and hard work of our people continue
to be the best guarantor of our prosperity and economic security. As the
global economy continues to recover, we see opportunities for long-term
development and growth. Seizing these opportunities will require responsible
stewardship, sound management, and forward-thinking policies.
- Madam Speaker, this Administration’s commitment to providing the
leadership necessary to grow our economy begins with our resolve to ensure
that our Financial Services Centre activities, and all our financial dealings,
continue to be conducted in accordance with internationally accepted
standards. Let it be perfectly clear Madam Speaker, the BVI has no intention
of doing business with “dodgy” or illegal business entities. We have confirmed
this position in several local, regional and international fora, and we will
continue to back up these words with determined action.
- We should all derive great pride in being an internationally recognized,
well-regulated Finance Centre jurisdiction. It is to the credit of every
member of our community that our little country stands so large among the
finance centres of the world.
- Madam Speaker, with respect to the fiscal situation it is important to
note that revenue collection has been less than we estimated across just about
all revenue heads. Despite this shortfall, it is estimated that on the last
day of business in 2003 Government would have collected one hundred eighty
million, six hundred thousand dollars ($180,600,000) in revenue and expended
one hundred seventy-four million, nine hundred thousand dollars
($174,900,000); for a provisional surplus on its operations of five million,
seven hundred thousand dollars ($5,700,000).
- From all accounts, and given the constraints under which we operate, this
is a commendable fiscal performance. This Government remains concerned,
however, over the responsiveness and speed with which the Administration
transacts its business with the private sector. When this Government purchases
goods and services from a private vendor, it is incumbent on the
requisitioning government agency to quickly prepare a voucher and dispatch it
to the Treasury for payment. This is a basic and fundamental process. But our
experience shows that too often it does not work smoothly. There are too many
delays, too many glitches, and too little responsiveness. Understandably, this
leads to frustration for our vendors, especially those residing on the sister
islands who are forced to make several appearances at the Treasury only to be
disappointed.
- Madam Speaker, this Government demands efficiency and professionalism from
those with whom it contracts. Those vendors deserve nothing less from this
Government, therefore, Madam Speaker, this Government is resolved to get to
the bottom of this matter. I assure Honourable Members that very early in the
New Year we will take whatever steps are necessary to eliminate this
non-business like practice and create a new standard of conduct.
- Madam Speaker, we recognize the need to improve areas of our Government’s
conduct. The ability to be self-critical and to constantly seek ways to
improve ourselves is the sign of a healthy organization. At the same time, let
us not lose sight of the fact that day in and day out the talented and hard
working men and women of our Civil Service are delivering for the people of
this Territory. Never was this truth clearer than during the recent rains,
when so many public servants went above and beyond the call of duty in their
efforts to protect the safety and well-being of our people and quickly restore
normal activity.
- So, Madam Speaker, on behalf of this Government I would like to take this
opportunity to recognize these outstanding organizations and individuals and
thank them for their dedication and skills:
- Public Works Department;
- Department of Disaster Preparedness;
- BVI Electricity Corporation;
- Royal Virgin Islands Police Force;
- BVI Fire and Rescue; and
- Numerous contractors from the private sector.
We are depending on you and will continue to depend on you in the future.
If we are to progress the business of this country and improve the welfare of
all residents, we need the full support of everyone.
Recurrent Budget Estimates of Revenue and
Expenditure
- Madam Speaker, as we went through the process of developing this Budget,
my colleagues and I remembered the many meetings and discussions we had with
BVIslanders at home and abroad. Madam Speaker, you would recall our community
meetings early in this Administration where we heard from belongers,
residents, and non-belongers from all walks of life and in all segments of
this country - the construction workers, shopkeepers, hoteliers, farmers,
housewives, senior citizens, young people, bankers, lawyers, students, taxi
drivers, and civil servants. In short, the men and women who make up the
fabric of our community and whose work powers our economy. Out of these
discussions, we learned much about the aspirations and objectives that our
people value. We have been told by the people that:
- quality health services must become more accessible;
- more attention must be paid to education in general and improving school
facilities and curriculum development specifically;
- sewerage treatment and disposal systems need improvement;
- our existing highways, bridges and drainage systems need repair;
- more must be done to provide access to public spaces for the physically
challenged;
- British Virgin Islanders must be afforded every opportunity to participate
fully in the development of the Territory and to reap the benefits of such
participation;
- the courts must be well equipped to effectively perform their role as one
of our indispensable democratic institutions; and more specifically, we need a
commercial court in the British Virgin Islands;
- the people are anxious to work with a professionally run and trustworthy
Police Force to ensure law and order in these islands;
- we need better road traffic laws and regulations; and more consistent and
pragmatic enforcement;
- farmers need Government’s assistance in being guaranteed an adequate and
reliable supply of water; and they need more accessible and better markets for
their produce.
- Madam Speaker, the people have given us a job to do. This is the people’s
agenda. It is broad and it is ambitious. And it is our commitment to see that
their will becomes the road map for our actions. The Budget presented here
today is another step toward fulfilling that commitment.
- Madam Speaker, with your kind permission I will like at this time to turn
my attention to the draft Estimates currently before this Honourable House.
While it is not my intention to comment on, or detail all the provisions in
the document, I am compelled to highlight certain matters that I consider
significant.
- In framing the draft Estimates, careful consideration was given to ensure
that all centers of population of the Territory will be served fairly and
equitably. Madam Speaker, we have said it and we mean it: “No District will
be left behind”. We are well aware that it is not possible to answer every
need in one budget, or solve every problem with one stroke, but we intend to
meet our shared challenges with energy and resolve. Above all, we remain
cognizant of the fact that our development efforts should remain targeted at
and for the benefit of the people of this Territory.
- The draft Budget Estimates before Honourable Members anticipate revenue
collection for fiscal year (FY) 2004 of one hundred ninety-eight million, four
hundred and forty-three thousand dollars ($198,443,000). Expenditure to cover
the recurrent operations for the Government for 2004 is estimated at one
hundred eighty-six million, five hundred and sixty-two thousand, five hundred
dollars ($186,562,500). The draft Budget, therefore estimates a recurrent
surplus of eleven million, eight hundred eighty thousand, five hundred dollars
($11,880,500).
- Of this estimated surplus, we intend to contribute nine million, five
hundred and eighty-six thousand, seven hundred dollars ($9,586,700) to the
Capital Fund to assist in financing the Capital Budget for 2004.
- Madam Speaker, it would not have escaped the watchful eyes of Honourable
Members that I will today, introduce the Public Finance Management Bill.
Without trying to contravene the rules of this House in appearing to be
explaining the provisions of the Bill, I think it is fitting at this point to
inform Honourable Members that the Bill makes provision, among other things,
for the establishment of Special Funds – one such fund is the proposed Reserve
Fund.
- In this Budget proposal, Madam Speaker, this Government plans to make an
initial contribution of one million, one hundred and ninety-three thousand,
eight hundred dollars, ($1,193,800) to the Reserve Fund. Madam Speaker, we all
can vividly recall the spirited debate in and out of this House concerning the
level of our surplus balances commonly referred to as the Reserves. The
statutory establishment of a Reserve Fund will provide an open and transparent
mechanism for determining the size of our Reserves. Madam Speaker, it is this
Administration’s collective resolve to systematically build up the Reserve
Fund over the next three years to serve as a cushion or temporary safety net
in the event of adverse shocks to the economy.
- Honourable Members will also note that the draft Budget includes a
contribution of one million dollars ($1,000,000) towards the
Emergency/Disaster Fund. Madam Speaker, the recent experience with the monsoon
type weather of the 9th through the 14th November, 2003, have further
strengthened our resolve that we must always stand prepared to facilitate
quick access to relief financing in the event of natural or manmade
disasters.
- Madam Speaker, now, more than ever we need to ensure that our scarce
resources are effectively utilized and not frittered away. We have stated it
before and we will state it again: this Administration is committed to
obtaining value for the people’s money.
- Accordingly, during the course of the year added emphasis will be placed
on improving the cost effectiveness and efficiency of public expenditure and
on improving the effectiveness and administrative efficiency of our revenue
collecting departments. At this critical time, every effort must be made by
the various departments to collect and promptly pay into the Treasury the
revenue envisaged in these Estimates.
- Accounting Officers are now reminded that their primary function is
to ensure that all public funds are properly safeguarded and applied for the
purposes intended by the Legislative Council, and that public programmes are
efficiently executed.
Public Debt
- Madam Speaker, it would not have escaped the vigilant eyes of Honourable
Members that our annual debt servicing obligations of four million, nine
hundred and forty-six thousand, one hundred dollars ($4,946,100) for 2004 is
just 2.49% of estimated revenue and is up 27.3 % from three million, eight
hundred and eighty-five thousand, five hundred dollars ($3,885,500) in
2003.
- Madam Speaker, by necessity, this Government, will need to avail itself of
loan funds to ensure our continued economic growth. However, Honourable
Members should be assured that this Administration will undertake further
borrowing only after rigorous examination and careful study. Every dollar
borrowed must be dedicated toward projects that are judged to be critically
essential, economically viable, as far as possible self-liquidating, and above
all, of clear and demonstrable benefit to the people of this Territory.
Capital Budget Estimates of Revenue and
Expenditure
- Madam Speaker, the Capital Budget, sometimes referred to as the
Development Budget of the Territory, is financed through a combination of loan
funds and local revenue. The Capital Budget of sixteen million, eight hundred
and thirty-seven thousand, seven hundred dollars ($16,837,700) anticipates new
borrowing of seven million, two hundred and fifty-one thousand dollars
($7,251,000) from the Caribbean Development Bank (CDB), and nine million, five
hundred and eighty-six thousand, seven hundred dollars ($9,586,700) from local
revenue.
- As I have indicated before, Madam Speaker, this Administration has pledged
itself to operating on the basis of forward-thinking and sound planning. We
must set goals, determine the best means of achieving those goals, and
allocate our resources to reflect our priorities. In that spirit, I must
signal this Government’s displeasure with the sizeable revotes reappearing in
the Capital Budget.
- What is greater cause for concern, however, is that a large percentage of
these revotes are for projects that have not seen any activity for the last
three to five years. In order to rectify this situation, we have already begun
the process in reasserting this Administration’s commitment to the
reallocation of these funds to finance projects of higher priority. This
approach, Madam Speaker, is the primary method employed in financing this
Capital Budget proposal.
- Once again in determining our Capital programme priorities, we have been
guided by our responsibility to all sections of the community. Tough choices
and difficult decisions are part and parcel of any budget, and good budgeting
requires responsible choices and balanced priorities. These decisions have not
been easy. But we were elected by the people of this Territory precisely to
make these difficult choices.
2004 Programmes
- Madam Speaker, I would now like to turn my attention to the substance of
some of the programmes and policies reflected in this Budget. I caution, that
by necessity, I will not be detailing every item in this Budget, but rather
providing an overview of the priorities that are reflected in it.
Health Care
- Madam Speaker, I begin with an area that is of the highest concern to the
people of this Territory, and a top priority of this Government: assuring
quality healthcare for all our people.
- As part of the ongoing effort to improve the delivery of health care, work
has already commenced leading to reform of the administrative structure of
Peebles Hospital. A Statutory Body is to be set-up, that will be called The
Peebles Hospital Management Board, to manage the operation of Peebles
Hospital. Work continues at the Peebles Hospital Expansion Project. This
includes providing new space to relieve cramped conditions and allow for
improved services.
- Provision is also being made to upgrade the various clinics to facilitate
the work of the staff and improve the comfort and convenience of patients.
Government places great importance on addressing the needs of the elderly. In
2004, Madam Speaker, the Ministry of Health and Welfare in conjunction with
the Pan American Health Organization (PAHO) will launch a survey to assess the
status of the elderly in our population. This survey will lead to the
development of a National Policy on the Elderly. This policy will underwrite
and enhance all our services and programmes to this valued sector of our
society.
- Madam Speaker, in addition, design work on the new Geriatric Centre at
Greenland will begin in the New Year and we expect that it will be completed
in time for it to become operational by mid 2005.
- Madam Speaker, in 2004, Government will also focus its energies on
addressing the HIV/AIDS epidemic. The Ministry of Health and Welfare working
in close conjunction with the other Ministries, especially the Ministry of
Education and Culture, will move with all possible speed to facilitate the
development and implementation of the National Plan on HIV/AIDS.
- By the middle of 2004, Madam Speaker, the new residential facility that is
located in Purcell for drug addicted persons will be completed and fully
operational. It will respond to the growing need among individuals for
assistance in curbing their drug addiction and will be able to accommodate a
total of 24 residents, (18 men and 6 women). The new Sandy Lane Center will
conduct a six month programme that will respond to the needs of those among
us, who require this service.
- Taken together, Madam Speaker, these steps will begin the work of building
a healthcare infrastructure that can meet the broad healthcare needs of our
people. These will encompass improvements from preventative medicine, to
health education; from proper pre-natal care, to dignified care for the
elderly. That has been and will continue to be a key area of focus for this
Administration.
- Management and disposal of solid waste is also being addressed. In mid
2004, work is scheduled to commence on the enlargement of the existing
building to accommodate a new incinerator.
Education
- Madam Speaker, in the area of education and culture the focus for 2004
will be on four main areas: improving the physical infrastructure, modernizing
the curriculum, expanding access to higher education, and providing expanded
opportunities for personal expression and growth for all our people, and for
our young people in particular.
- Madam Speaker, in order to realize this vision, this Budget allocates
approximately $47M for education and training at all levels – primary,
secondary and tertiary educational facilities including the HL Stoutt
Community College.
- In addition, we will build, in the near term, at least one additional high
school. We plan to improve handicap access to school buildings, bathrooms and
classrooms and this investment reflects the pivotal role this Government
places on preparing our people to meet the challenges of the 21st
century.
- Investments in Information Technology will be expanded with the
implementation of Phase 1 of the networking of public schools. Madam Speaker,
work is currently under way to review the national curriculum and this work
will continue through the year.
- In addition, there will be a special focus on Early Childhood Education
with the implementation of the first Early Childhood Curriculum in all
preschools in the upcoming year.
- Madam Speaker, The Ministry of Education and Culture will continue its
efforts in general teacher training as well as the continuation of the
Alternative Secondary School Programme. The Scholarship Programme will be
closely monitored and managed to ensure that the Territory’s young people are
provided every opportunity to prepare themselves. Reading and literacy is
expected to be further enhanced with continued implementation of the River
Deep Reading Programme. Madam Speaker, in our focus to develop our Youth and
Sports Department, the Ministry of Education will develop and implement plans
to improve recreational grounds and facilities throughout the territory with
an immediate focus on the A.O. Shirley Grounds, the Old Recreation Grounds,
and the Greenland Recreational Ground.
- With the completion of the Multipurpose Sports Complex, the Ministry of
Education and Culture will embark on a strong marketing campaign, in
conjunction with the Tourist Board to develop sport tourism in the
Territory.
- Madam Speaker, between Education ($46.7M), Health and Welfare ($37.3M) and
Youth Development ($1.02M), there are appropriations of over $85.02M to begin
to address the various social issues concerning our community.
Natural Resources
- Madam Speaker, this administration is also committed to the goal of better
use of our natural resources to meet the needs of our people. Towards that
end, the Government will be purchasing new lands at Long Bay, Beef Island; and
continuing payments for lands at Spooners Estate, Paraquita Bay and Brewers
Bay.
- Additionally, in an effort to ensure that our Cays and smaller islands
remain in the hands of our people, we will purchase Green Cay and Sandy
Spit.
- Madam Speaker, the purchase of these lands will also tie in with our Home
Ownership Programme. We believe that every British Virgin Islander has the
right to decent housing. Therefore, the 2004 Budget Estimates will reflect
monies for our Pilot Project for the home ownership programme. Simultaneously,
Madam Speaker, we have begun to develop a full scale Housing Policy.
- As we work to develop and use our land for the good of our people, we are
also committed to assisting our farmers and fishermen to similarly benefit
from our natural bounty. As a first step in this direction, this
Administration conducted an Agricultural Census that has been completed. This
project provides vital information to make sound technical decisions. We will
continue the cutting of feeder roads to ensure that our farmers have access to
their plots. This Budget provides funds for a new Poultry Processing Unit and
the completion of a new Nursery at Paraquita Bay.
- Madam Speaker, with our Fisheries Regulation now on the Books, we are
beginning to see important results. These regulations have gone a long way in
strengthening the 1997 Fisheries Act along with protecting and promoting the
BVI Fisheries Sector. Additionally, we intend to embark on fishermen training
with a view towards developing our pelagic Fishing Industry.
- Madam Speaker, the sport fishing industry has tremendous revenue potential
for the BVI and, with this in mind, we have engaged a consultant to assist in
developing the industry. The Ministry of Natural Resources and Labour is doing
its part and has made some important contacts in the United States in this
endeavour. Madam Speaker, The Minister of Natural Resources and Labour has
given his commitment that, 2004 will see a serious leap forward in this
area.
- Furthermore, Madam Speaker, we have begun discussing an Environmental Levy
and we view this as another option for the protection of our environment and
funding of environmental projects.
Tourism
- Madam Speaker, the natural environment which is the centre piece of our
tourism product is an endowment from our Creator. We are charged with the duty
to preserve and protect this legacy so future generations can enjoy the same
privileges we enjoy today. The planners call it sustainability.
- Looking back at 2003, Madam Speaker, we characterize it as a year of
severe challenges and transitions. The combined effects of war, terrorism,
SARS and slumping economies heavily impacted the global travel economy. Many
tourist destinations experienced their worst years in recent times due to
shifts in visitor patterns driven by a new consumer psyche seeking safety
first and a vacation experience second.
- The good news, Madam Speaker, is that as the year comes to a close
we are experiencing a return to what we would refer to as the new normalcy.
Pent-up demand for travel, a recovering U.S. economy and improved security in
air travel are getting people to put aside their concerns and get back on
planes.
- At the same time, this new normalcy is also characterized by a
consumer who is demanding more value in his travel experience and more
flexibility and control of travel arrangements.
- Madam Speaker, the British Virgin Islands has weathered the challenges of
this past year. We are resolved now to actively and aggressively seize the
opportunities we can see in the coming year. This global optimism is supported
by an outlook, which shows the Caribbean to be among the most favoured
destinations for winter travel from North America and Europe. This is further
enhanced by a strong Pound and Euro, which makes travel from Europe to US
dollar destinations such as the Caribbean quite attractive and at the same
time makes American travelers more inclined to avoid traveling to places where
they will have to trade their currency at unfavorable rates of exchange.
- Madam Speaker, Honourable Members would have noticed the increased
subvention – ten million dollars ($10,000,000) being contributed to the
Tourist Board for 2004. This is an attempt to provide the Tourist Board with
the resources to launch its aggressive plans for taking our tourism sector to
the next level. Madam Speaker, in 2004, The Board plans to:
- implement a national service training programme to provide our people with
the tools they need to provide world-class service to our visitors and which
will make training a pre-requisite to obtaining work permits, taxi licences
and other permits required to provide services in the hospitality
industry;
- exploit technology as a management tool and implement a tourism statistics
system to provide timely tourism data that is so essential for making informed
decisions; and
- Madam Speaker, additionally The Board plans to establish a Tourism
Development Fund to provide easier access to financing by our small tourism
properties. This financing will be used to fund capital projects for the
purpose of implementing specific recommendations to improve the physical
conditions of their properties and, hence, raise the standard of accommodation
in the Territory.
- Madam Speaker, I would like to take this opportunity to commend the
Tourist Board on the work it has done over this past year. The programmes
noted above represent a vision of a vibrant and dynamic tourism sector. This
Administration has every intention of acting as a committed partner in
realizing this vision to the benefit of every family in our Territory.
Financial Services
- Madam Speaker, I turn now to the second pillar of our economy, Financial
Services. Notwithstanding increased competition, heightened international
regulation and greater scrutiny of financial transactions, the British Virgin
Islands continues to be the premier offshore corporate domicile
centre.
- Information on International Business Companies registration for 2003
showed a slight decrease when compared to 2002. As of 30th November 2003,
44,389 new International Business Companies were incorporated bringing the
total number of International Business Companies incorporated under the Act as
of 30th November, 2003 to over 550,000.
- Efforts to diversify our financial services sector offerings and to
enhance the attractiveness of the Territory as a Financial Services Centre
will be intensified during the course of the year.
- In this regard, draft legislation has been fashioned on the anvil of
widespread debate and ongoing dialogue with the private sector. Government is
also in the preliminary stages of considering legislation affecting the
industry’s regulative mechanism.
- The Financial Services Commission will utilize approaches such as
surveys - consultative papers, aide memoirs, and the like, to establish a
robust consultative programme on legislation and policy initiatives.
- They have pledged judicious use of their website to inform and keep
interested parties and industry practitioners abreast of proposed new product
offerings, legislative and procedural changes; all aimed at making the sector
more vibrant, responsive and business friendly.
- In addition, Madam Speaker, the Financial Services Commission plans to
work with the Attorney General’s Chambers and other concerned agencies in
preparing for the implementation of the Insolvency Act, 2003. The Government
will shortly be calling upon the customary support of Honourable Members in
effecting substantial amendments to several key pieces of financial services
legislation namely; The Bank and Trust Companies Act, Company Management Act,
Mutual Funds Act and Insurance Act.
Preparing to Move to the Next Level
- Madam Speaker, I would like to use the last part of this budget address
today to look ahead to our prospects in the coming year, and to offer this
Government’s plans on the steps we will take in order to bring growth and
prosperity to our people.
- Madam Speaker, our land is singularly blessed in many respects; and we
have much to be thankful for. In 2003 (so far), we have escaped the too
familiar ravages of hurricanes and, save for the damages from the 7 (seven)
day rains, we have been spared the suffering of any other natural or man-made
disasters. We have been able to pay our bills; and ever since 1987 we have
been able to realize a surplus on our recurrent operations. Our visitors and
residents alike can live and work in relative peace and harmony. Given the
turmoil that now grips so many parts of the world, we should be forever
grateful for the quiet blessing of our islands’ tranquility.
- Madam Speaker, if we are to maintain and even improve on the standard of
living and the degree of prosperity to which we have all grown accustomed,
there are a number of things we must do.
- Firstly, Madam Speaker, we must intensify our focus on diversifying the
economy of the British Virgin Islands. This is one of this Administration’s
primary objectives in the near term. We should continue to foster stronger
economic linkages between the twin pillars of our economy - Financial Services
and Tourism. We must be prepared to allocate resources to encourage and
nurture micro enterprises and small entrepreneurs to share in and ensure the
continuation of our economic success. We must encourage greater involvement in
vegetable and fruit crop farming, fishing, small stock and poultry rearing.
Greater self-sufficiency in basic foodstuff should remain a high priority for
this and any future administration.
- Secondly, Madam Speaker, we must protect our natural resources, the very
attributes on which our way of life depends. Our water-ways, beaches,
coastlines, our seabeds and lands with their fauna and flora must be guarded
zealously so that they will remain to benefit generations of BVIslanders yet
unborn.
- Thirdly, Madam Speaker, if we are to continue along the path of economic
prosperity and political stability we must be prepared to take the bold
initiative to critically review our institutions and systems to ensure their
appropriateness and functionality.
- We must recognize that a fast-changing world may render some of our
institutions and systems obsolete and harmful to progress. If we are to
continue our progress we must revamp and retool when needed. We must be
prepared to eliminate waste and inefficiencies. We must not allow ourselves to
become mired in the comfort of the known – rather, we must be prepared to try
new approaches and encourage new thinking. In the end, our only benchmark
should be success measured in terms of meeting our obligations to our
people.
- Madam Speaker, one area where new thinking is critical to the future
success of this Territory is the provision of an affordable and competitive
telecommunication infrastructure. Madam Speaker, the Minister of
Communications and Works has specifically asked that I inform this Honourable
House that 2004 will be the year that this Territory will commence the process
of formulating the deregulation regime that will liberalize telecommunications
in this Territory.
- Fourthly, Madam Speaker, for any of the foregoing to happen we must have
the involvement of the people - all the people. We must continue to search for
the right mix of British Virgin Islanders and foreign residents with-in the
context of the optimal mix of foreign and local investment. Our labour and
immigration policies must be informed by our development objectives which in
turn should reflect the aspirations of the people.
- Through the efforts of past Administrations, significant improvements have
been made in the physical, social and human infrastructure of the BVI. But
there is still much that remains to be done. The Government has its
responsibilities and we intend to meet them. But so too, each individual in
the Community, each section and sector of the Community, and each island
within the Territory also has its responsibilities. As a people we are few in
number and this underscores the need for us to work together on the things
that unite us. Securing our shared future means getting the best out of all
our people. Our Creator has endowed all of his children with talents and
strengths. It is our duty before him and our responsibility to each other to
make the most of these for the benefit of all.
- Madam Speaker, building a strong and vibrant economy and promoting the
well-being of our people is not just about Government. More than ever, we must
enlist the support and cooperation of the private sector. This Administration
recognizes that businesses, large and small – the restaurants, shops, offices,
hotels, banks and other private enterprises – are the true engine of growth in
our economy.
- Madam Speaker, one of the first steps in growing the private sector is
that of increasing the disposable income in the hands of the consumer. In this
budget proposal, Madam Speaker, this Government is proposing to lift the
ceiling of tax exempt income from three thousand dollars ($3,000) per annum to
seven thousand, five hundred dollars ($7,500).
- Honourable Members will note that the Income Tax (Amendment) Bill on
today’s Order Paper proposes, among other things, to grant all persons subject
to income tax an exemption on the first seven thousand, five hundred dollars
($7,500) earned per annum beginning January 1, 2004. Allowing workers to keep
more of their hard earned wages will give them the option to either spend or
save – both activities being a pre-requisite for expanding the economy.
- In addition, Madam Speaker, this Bill will allow for equal deduction of
PAYE through out the year.
- Madam Speaker, many people have made representation about the need to
synchronize the age of retirement from the public service with Social Security
age of eligibility for benefits. This Government will take the appropriate
steps to correct this imbalance.
- Madam Speaker, on the matter of the National Health Insurance and the
National Pension Scheme, I am pleased to report that this Government expects
to receive the final report on these two most important areas of our social
infrastructure by the middle of the second quarter of fiscal 2004.
- Madam Speaker, the rehabilitation of Road Town is another priority of this
Government, and will continue with the removal of the mounds of dirt commonly
referred to, as Mt. Peebles and Mt. Savage by the end of the first quarter of
2004. The completion of parking lots, road development to allow for better
traffic flows, beautification, sidewalks and other planned programmes to make
Road Town the capital it should be will continue.
- Madam Speaker, this Administration proposes to increase the national
housing stock over the next four (4) years by facilitating access to mortgage
financing; involving contractors, bankers and realtors in augmenting the
capital stock of private housing and, hence, promoting home ownership and the
attendant economic activities.
- Madam Speaker, this Administration is currently exploring the cost and
benefits of granting certain concessions to taxi operators to provide some
much needed assistance to this essential service area of our economy. This may
include a custom duty exemption on the importation of vehicles to be used as
taxis.
- Madam Speaker, Honourable Members will recall that we have established an
Economic Recovery Advisory Committee (ERAC). This Committee has shared with me
a preliminary report of its deliberations. Contained in this report are a
number of recommendations intended to energize our economy. These
recommendations which I endorse wholeheartedly, include, references to the
following :
- that the Government approaches the BVI Bankers’ Association to solicit the
cooperation of its members to provide special assistance to clients affected
by the recent 7 day rains. I am aware, and I take special note, that the USVI
banks are giving similar assistance to their clients;
- that the Government seeks the support of the Social Security Board for the
establishment of a special line of credit to be used solely for the purpose of
assisting members of the public whose properties including retaining walls
were damaged during the recent 7 day rains. Madam Speaker, it is imperative to
emphasize that this special facility should be available only for
reconstruction or rehabilitation arising out of damages incurred during the
bad weather.
I agree that this facility should be managed by the
Development Bank of the Virgin Islands (DBVI) with appropriate checks and
balances including the development of a means-test to ensure that the facility
is available to the most deserving persons;
- that the Government announce a 3-month “holiday” during which penalties on
all outstanding arrears of government revenue would be stayed provided the
account is either immediately settled or an effective and binding payment plan
is agreed;
- that the Government commences immediately an exercise aimed at improving
efficiency and cost savings in Government expenditures; and
- that the process of trade licences be streamlined and made more efficient
to facilitate both local and foreign investments. BVIslanders not only have
the right, but also should indeed be encouraged to engage in economic
activity.
We must make sure that no roadblocks undermine this
basic right.
- Madam Speaker, this Government intends to implement these recommendations
from the committee.
ACKNOWLEDGEMENT
- In concluding, Madam Speaker, I will like to acknowledge the contributions
of all our partners in our continuing struggle for development. The statutory
bodies and parastatals, such as the Financial Services Commission, Social
Security Board, The Development Bank of the Virgin Islands, BVI Electricity
Corporation, BVI Ports Authority, BVI Tourist Board, H.L. Stoutt Community
College, National Parks Trust and Wickham’s Cay Development Authority all of
which we rely on to assist us in designing, producing and delivering all the
goods and services necessary to foster development and prosperity.
- Donor agencies such as the United Kingdom (UK), Caribbean Development Bank
(CDB), European Investment Bank (EIB), European Economic Community (EEC),
United Nations Development Programme (UNDP), Commonwealth Fund for Technical
Co-operation (CFTC) and United Nations Educational Scientific and Cultural
Organization (UNESCO) have all contributed to our development efforts thus
far, and we will be relying on these agencies for their continued support.
- Madam Speaker, I would like to record my thanks to the many persons who
cooperated in helping to produce the Estimates. The list includes my
colleagues and fellow Ministers, the Deputy Governor, the Permanent
Secretaries, Heads of Departments and their staff. Moreover Madam Speaker, I
would like to thank my staff at the Ministry of Finance for without their
cooperation it would not have been possible to present these Estimates today,
six (6) months and Six (6) days following this Administration’s assumption of
office.
- Madam Speaker, we have a long road ahead. Together, let us reaffirm our
commitment to building a strong, vibrant and secure future for our people. Our
creator has blessed us with His grace. Let us take pride in our labor and let
us remain steadfast in our resolve to lifting up and empowering all our
people.
- Madam Speaker, it is with great pleasure that I present this
Government’s Budget for 2004. I commend its provisions and policies for the
consideration and approval of Honourable Members.
Financial Secretary
Glenroy A. Forbes
Deputy
Financial Secretary
Neil M. Smith
Director of Financial
Management
Lucia C. Lettsome
Budget Unit
Diane Parsons –
Budget Officer II
Trecia Thomas-Maduro – Budget Officer I
Michelynne
Bassue – Finance Cadet
Delroy Jennings – Finance Cadet
Laurel Smith –
Finance Cadet
Daphne Frett – Senior Executive Officer
Lilian George –
Senior Executive Officer
Jahmal Rabsatt – Clerical
Trainee
Administration Unit
Cecile Jardine
Althea
Richardson-Crandall
Lenia Smith-Hodge
Gwynne Chapman
Maria
Smith-Thomas
C. Jovita Mercer-Scatliffe
Travicca Smith
Sonya
Penn
Rhonda Glasgow
Helen Ajisebutu
Shervon Tyson
Andre
Donovan
Kareem Thomas
Tristan Mills
Procurement
Unit
Avonette Morton
Diana Purcell-Gumbs
Myra
Maynard
Project Cycle Management Unit
Beverly
Charles
Lucille Malone
Bryan Durante
Shaina Smith
Carlene
Prentice
Human Resource Management Unit
Marisa
Frett
Finance and Economic Affairs Secretariat
Natalie Fahie-Smith
Dwayne Thomas
Marva Sylvester
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