MOTIONS related the 2017/2018 budget and existing debts on the Regional Government Securities Market (RGSM) came in for sharp criticism by the Opposition when they came up for debate at Tuesday’s sitting of the House of Assembly.
While the entire Opposition team presented various reasons for opposing aspects of the motions, it was really their Political Leader Phillip J. Pierre and former leader Dr. Kenny Anthony who tore into the motions, drawing the ire of Prime Minister Allen Chastanet, who presented the Motions.
Chastanet, who is Minister for Finance, sought Parliament’s authorization to raise EC$103,000,000 for financing the 2017/2018 Budget and EC$262,000,000 for refinancing the existing debts on the RGSM or through private placements at a maximum rate of 7.5%.
Pierre wasted no time in challenging the first motion for $103 million, claiming that since the Prime Minister was asking for that amount, where then will he source the money to continue financing other government projects.
Pierre’s emphasis was on the budget which, he said, was the largest deficit budget the country has had for quite some time.
“Even with an increase in the fuel tax of 60% (and) an increase in airport tax of 152%, we still have a deficit budget,” he said.
He stated further that the budget was in deficit by over $220 million and that refinancing of the budgetary proposals was actually $345 million.
“The money he (Prime Minister) is asking to borrow does not cover the overall deficit that he has. Therefore, the Minister for Finance must return to this Honourable House to borrow some more. It is simple commonsense,” Pierre said.
To amplify his point, Pierre said total expenditure for this financial year is $1.5 billion, with $1.1 billion being total income. He then questioned where the Prime Minister intended to raise the remainder.
Regarding the second motion, which dealt with the RGSM, Pierre said the Prime Minister failed in presenting a list of the debts which the loan he is seeking is expected to refinance.
Dr. Anthony, on the other hand, claimed to be “very mystified about the resolution”, calling it “an unusually crafted resolution”.
“I am not even sure in my mind that the correct procedures have been employed in presenting this resolution to this Honourable House. We seem to be seeking borrowing from two different sources,” Anthony said, adding that the resolution lacked clarity in respect of interest rates.
Dr. Anthony said that since St. Lucia is attracting the highest rates of interest (6%) for its instruments on the RGSM, both positive and negative sides exist. He pointed to the 6% interest rate as positive. However, while the instruments are attracting those rates of interest, the economy is under stress.
Dr. Anthony called for answers to two questions: whether legally one can proceed to borrow sums of money from two Government Acts in one resolution without reference to specific Acts and the amount of money being raised under each Act; and two, whether one can proceed to ask Parliament for its blessings in an open-ended manner, notwithstanding the fact that certainly, in respect of the National Savings Development Bonds Act, one has greater room to maneuver.
Chastanet took objections to both Pierre’s and Anthony’s take on the Motions — that something was not quite right with them.
“I am trying to contain myself,” Chastanet said.
“To suggest that there is something wrong with the Motion, something illegal, something improper and asking us to take a reflection….Am I to believe they were genuine questions?” he asked.
The Prime Minister described Pierre’s question about government’s ability to finance the rest of the budget as “ridiculous”.
Other money resolutions before the House on Tuesday included one in which Chastanet called on Parliament to authorize the Minister for Finance to borrow US$11,228,000 from the Caribbean Development Bank for the purpose of financing the Dennery North Water Supply Redevelopment Project.
Parliament was also called upon to authorize the Minister for Finance to borrow an amount equivalent to US$15 million by way of credit from the International Development Association to finance the OECS Regional Tourism Competitiveness Project.