SVG Budget 2012

PM to present 2012 budget today

Prime Minister and Minister of Finance Dr. Ralph Gonsalves (File photo).

KINGSTOWN, St. Vincent — Vincentians will today hear about their government’s plans to secure the 2 per cent economic growth forecast for this year in the face of turbulent economic times internationally.

But Opposition Leader Arnhim Eustace told I-Witness News yesterday that based on the Estimates Parliament approved in December he was not expecting much difference between the 2012 and 2011 budgets.

Parliament meets at 4 p.m. and Prime Minister and Minister of Finance Dr. Ralph Gonsalves will in this budget speech outline the fiscal and economic policies to be adopted by his Unity Labour Party (ULP) administration this year.

Legislators in December approved estimates of EC$793,911,053 for this year’s budget, 0.7 per cent or EC$7.42 million more than the approved budget for 2011.

Gonsalves told reporters last week that the broad issues for the budget were laid out in the Estimates, which he said in December “are fashioned to respond to the current economic circumstances and the strategic path which this government has chosen”.

“Based on the estimates, I don’t see a big difference between the budget last year and this year. That is all I have to go by at the moment,” Eustace told I-Witness News on Sunday.

He said that he would in his response to the budget say what a New Democratic Party administration would have done in the existing economic circumstance.

But Eustace, an economist and former prime minister and minister of finance, said he is expecting “some attempts at fiscal consolidation, although I don’t see much of that in the estimates”.

Eustace further expects Gonsalves to outline the ULP administration’s plans for the National Insurance Service (NIS) and the general pension system here, which Gonsalves has said has become extremely costly.

“I expect him to make specific proposal with regard to that: whether he is going to increase contribution rates, whether he is going to extend the age of retirement and how he is going to marry the public service scheme and the National Insurance Service,” Eustace said.

He noted that while the public service pension is fully funded by the government, there is no contribution by public servants.

Opposition Leader Arnhim Eustace (File photo).

Eustace said he wants to know how the government is proposing to mesh the two pension services especially since public servant retire at 55 and those in the NIS at 60.

“So, I expect there will be some attempt to try and marry the two time periods to ensure that they come together or as close together as possible,” he explained.

Eustace further said it was clear from what was being said and from the economy that “expenditure has to come under some control and this gives rise to the question of the three per cent that is due to civil servants and whether that can in fact be paid.

“So, there are a number of issue of a fiscal nature which I consider to be very critical tomorrow (today) but some of them I wont know until he announces his proposals,” Eustace said.

Gonsalves told reporters last week that while 2 per cent economic growth is forecast for this country this year, “this can go awry if the situation in the developed countries and an in particular North America takes a turn for the worst”.

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Discussion

One thought on “PM to present 2012 budget today

  1. The ULP Government have been selling Treasury Bills for the last 9 years. The Treasury Bills are sold at a discounted rate i.e. January 4th 2012 was discounted at 5.82% repayable in 91 days. That is equivalent to paying an interest rate in excess of 23% a year.

    I write to bring this to your attention because the IMF are under the misconception that we are not borrowing at commercial rates. Gonsalves told us the we are getting cheap money at %2 from ALBA. Why did he not tell the people that we are using the Bond Market and selling Treasury Bills, paying through the nose for that money, in excess of 23% per annum.

    Dr. Slater said yesterday in parliament that we have not taken any commercial money and are borrowing at 2%.
    That is not true we borrowed money to bail out the NCB bank at much greater rates than that. We also sell our treasury bills at 10 times that amount.

    Below are the proposed Treasury Bill sales

    January 4th 2012 Government of St Vincent and the Grenadines 91-day EC$25M, 5.82% Treasury Bill
    [=23.28% p.a.]

    February 1st 2012: Government of St Vincent and the Grenadines 91-day EC$25M, 5.82% Treasury Bill.

    March 1st 2012: Government of St Vincent and the Grenadines 91-day EC$25M, 5.82% Treasury Bill.

    April 10th 2012: Government of St Vincent and the Grenadines 91-day EC$25M, 5.82% Treasury Bill.

    June 4th 2012: Government of St Vincent and the Grenadines 91-day EC$25M, 5.82% Treasury Bill 4 Jun 2012

    May 4th 2012: Government of St Vincent and the Grenadines 91-day EC$25M, 5.82% Treasury Bill

    June 4th 2012: Government of St Vincent and the Grenadines 91-day EC$25M, 5.82% Treasury Bill

    Posted by Peter | January 11, 2012, 13:43

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