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Chastanet: Get Fiscal Situation Under Control

AT this week’s media briefing before Monday’s Cabinet Meeting, Prime Minister Allen Chastanet spoke about plans for the upcoming 2017-2018 Budget Presentation.

Chastanet, who is also Minister for Finance, Economic Growth, Job Creation, External Affairs and the Public Service, said Government had been engaged in ascertaining the exact fiscal position of Saint Lucia and finding balance.

Image of Prime Minister Allen Chastanet’s
Prime Minister Allen Chastanet

One of the essential issues he noted which had to be dealt with was the housing of Government offices since Government has had to deal with several outstanding concerns of poor working conditions and health hazards.

“I have been physically going around to the different offices and it is amazing to see the circumstances some of the civil servants are being asked to work under,” noted Chastanet.

Among the Prime Minister’s recent visits was to the Inland Revenue Department (IRD). The state of that office, he noted, was in stark contrast to the other offices in the same building.

“People want to see an upgrade in their standards,” said Chastanet.

The challenge, he said, was that Government was already spending millions on rental payments and constrained in terms of what it could do.

“There is $450 million in payroll. There is very little we can do right now other than try to get more productivity for it. Clearly, to do that physically, the Government is going to have to increase the amount of facilities that we have. We are already spending $44 million a year in rental payments so when you get into your salaries, pensions, you get into $300 million a year in debt financing and then the cost of opening up the Owen King centre, you are already struggling.”

Going forward, Chastanet said, the Government was working on a four-year strategic development plan.

“What we are looking to do is a fiscal budget for this year and a very clear programme for the next four years in terms of how we transition,” he said. “You hear some irresponsible statements like there is no need for a sinking fund. When you look at the amount of money we are going to have to turn over in debt this year alone, it tells you that the country was on autopilot and there are a lot of things that are going to have to change. Those changes cannot take place all in one year. We have to be able to put the country in a much more fiscally-stable position.”

Chastanet spoke frankly about the diminishing aid for developing countries like Saint Lucia from larger economies like the United States.

“Can we truly expect and believe that those countries are going to continue giving us money?” asked the Prime Minister. “We have to get our house fiscally in order and we need growth. This country cannot continue to survive on the level of growth it has had. So, how do we find that balance between bringing fiscal responsibility to the State, which may potentially mean increases in taxes, with now attracting new investment, which means lowering your taxes? So we need to find that balance to make that happen. We are hoping to present a plan in the Budget that takes balance into account and also what we will do in the next four years to begin this alignment.”

The Prime Minister, Cabinet Ministers, and various Ministry heads have been engaged for the past several months in Budget preparations and developing a four-year plan for the country.

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