Contribution By Hon. Minister For Infrastructure, Port Services And Transport And Parliamentary Representative For Castries East, Philip J. Pierre:“STABILITY, CERTAINTY AND CONFIDENCE: STIMULATING SAINT LUCIA’S ECONOMY IN A TIME OF GLOBAL UNCERTAINTY”
SALUTE TO THE PEOPLE OF CASTRIES EAST: “This is my fifteenth budget debate as a member of this Honourable House. For this privilege, I am forever grateful to the people of Castries East. They have stood firmly behind me and the Saint Lucia Labour Party. Despite a five year onslaught of lies, propaganda, innuendoes, flashing mirrors and bluff, they gave their duly elected representative a tripled majority. I am humbled by this vote of confidence and pledge to continue to work in the best interest of all the people within my constituency and throughout Saint Lucia.”
DIFFERING VIEWS ON SOCIETY AND POLITICAL PHILOSOPHY:
*Hobbes sought to discover rational principles based on harmony and peace…which would not be subject to destruction from within. To achieve this he postulated that people ought to submit to an absolute political authority
*Hegel put forward the concept of the “philosophy of right”. He argued that an independent nation is a political community when its members share certain ethical ideals and are united by a generally accepted system of social morality prescribing their duties, roles and functions in society.
*Prime Minister presents optimism; hopefulness within the framework of this reality. We have put forward a budget which shall build a more productive economy and a fairer society. A budget aimed at unleashing the creativity and ingenuity of all Saint Lucians but framed within the context of the extra-ordinary socioeconomic challenges we face
REFLECTION ON THE LAST FIVE YEARS
*When the SLP government demitted office in 2006; the rate of GDP growth was 12.8%. This followed growth rates of 8.%, 9.80% and 5.82% in the preceding three years (Economic and Social Review 2011). In that same period unemployment stood at only 14% and a consistent recurrent surplus was realized (except for the period 2002/2003). The UWP inherited a strong and robust economy with high rates of domestic and foreign direct investment.
*The SLP since returning to office on November 28, 2011 inherited the following: From the fiscal year 2009/2010, recurrent expenditure has exceeded recurrent revenue. In their last year in office the UWP Government was forced to borrow $33million to meet recurrent expenditure, while the unemployment rate skyrocketed to 21.2% at the end of 2011. Foreign direct investment is at an all time low.
Our country has not gotten into this situation by accident. We are at a watershed moment in our economic development as a result of the ill-conceived policies and programmes of the former government; as a result of wastage and scant regard for the opportunity cost of the misuse of our scare resources; as a result blatant corruption and general incompetence.
Reminisce on the following:
- Vulgar infighting and power struggles within the UWP which left the leadership of the government nonfunctional over an extended period of time;
- The ill-conceived acquisition of the “Bois D’Orange Hypermart” at a total project cost of $86.5 million with monthly loan interest payments of $.20 million.
- The Black Bay lands fiasco and the inevitable loss of $58.72 million dollars of tax payers’ resources;
- Excesses and wastage throught the lifespan of the Marigot Housing Project;
- The international embarrassment caused by the revocation of diplomatic and personal visas of a Government Minister
- Unprecedented levels of direct awards of government contracts without attaining the best value for expended resources
- Refusal to account for grant funding through the consolidated fund
- Telephone bills of Government Ministers in excess of $100,000.
It is imperative that we reflect and ask ourselves where would we have been as a government and a country has such wastage not occurred?
Over the next fiscal period the government shall work assiduously to restore confidence in our economy.
- Confidence in the political stability of the country
- Confidence in one’s job, income and future
- Confidence in one’s ability to pursue higher education and attain suitable level of employment
- Confidence by a company to commence operations in Saint Lucia or expand existing operations
- Confidence by investors to borrow money for investment into the domestic economy
- Confidence that the ease of doing business will be consistently improved
- Confidence that bribery and political corruption will be a thing of the past.
While the former government has refused to take responsibility for the current fiscal deficit and the false pronouncement of Growth given during the last budget, the Prime Minister is offering us hope and giving us courage for a call to action. While they are busy finding people to blame-Blame Opposition while in Government, Blame Government While in Opposition, we are mustering the courage and discipline to do things differently so we can experience the better days that we promised. There are those who want to make a mockery of the better days but the SLP made it clear in the Blue Print for Growth that our plan was a long term plan (Page 3 of Blue Print for Growth).
We are in a crisis. The most severe and debilitating crisis since Independence. Yet the former Government could not identify the policies to respond to the mess that they created. As if bad governance was not bad enough, Hurricane Tomas dealt us a lethal blow and left behind a battered infrastructure. Now we face a huge construction bill.
Operating in that scenario, the Minister of Finance could choose to look inward; he could recoil into a gesture of austerity. He could increase taxed, he could become insular, he could retrench public workers or he could even cut back drastically on capital expenditure.
That was not the position he took. Instead he sought to take the public into his confidence, the private sector, the unions, the public sector, the youth, the artists and the unemployed. He took them into his confidence. He gave them opportunity while reminding us that the economy had been left on a “slippery slope”.
This theory of expansion during depression is not unfounded. It is the theory postulated by Nobel Prize Winning Economist Paul Krugman who in his book “End this Depression now” states:
“The boom, not the slump, is the time for austerity. Now is the time for the government to spend more, not less, until the private sector is ready to carry the economy forward again – yet job destroying austerity policies have instead become the rule”
HOWEVER, the Prime Minister is not encouraging reckless spending. He is requesting constraint and asking for fiscal consolidation without the onerous burden of taxation on individuals or business. The Government is recommending one major tax policy-VAT.
The SLP had the trust and the confidence in the people to tell them before the elections that we had no choice but to implement VAT!
We are the last Caribbean country to do so.
The good news is that there will be the removal of some taxes such as consumption tax.
There are exempt and zero rated items.
Vat will be delayed on utility bills. We are putting safety nets to protect the poor and we are attending to the concerns of the hotel and other business sectors.
There is relief in the form of increasing the tax threshold to $18,000 and increasing the property tax allowance to $100,000. This means that some persons will be exempt from these taxes, while all the others can claim more and in effect will have more disposable income. EVERYONE WILL BENEFIT!
We are reducing the debt burden to WASCO and the public hospitals.
We are providing a stimulus to the economy by reducing prices of building materials. Bank of Saint Lucia has agreed to provide loans for construction at a rate of 5% per annum for a five year period for new residential and business construction.
THOUGHTS ON NEW POLICY DIRECTION FOR THE MINISTRY OF INFRASTRUCTURE, PORT SERVICES AND TRANSPORT
The Ministry is charged with the responsibility “to develop modern, affordable and resilient infrastructure that can support our social and economic development” coupled with the maintenance of an efficient transportation system. For this financial year, the Capital Budget allocated to this Ministry is $95,885,273, of which $82,267,344 is for programming while $13,617,929 is for repayment of completed Design/Finance/Build projects. Recurrent Estimates of $29,547,600 support the Capital Estimates.
The Ministry expects to fulfill its mandate, utilizing the principles of integrity, equity and fairness together with the following:
- Utilization of all three (3) established thresholds of procurement such as the Central Tenders Board, Departmental Tenders Board and authority of the Permanent Secretary, based on project cost.
- Creation of clear qualification criteria for evaluation of tenders based on the capacity of bidders and bid price.
- Maintenance of a Contractors’ Register containing categories of contractors as small, medium and large, from which pre-selection would be done for invitation to bid.
- A combination of open tender and pre-selection will be utilized based on project complexity.
- Improve road rehabilitation through simultaneous intervention of reconstruction and maintenance (potholing).
- Utilization of performance-based contracting for maintenance of the primary road network.
- Utilization of a GIS-based Road Maintenance Management System (RMMS) to capture road inventory, traffic data, pavement condition data, and economic data for decision making on prioritization on maintenance treatments and interventions.
- Bridge Maintenance Management System to capture data on structural conditions of bridges for decision making on prioritization on maintenance treatments and interventions.
- Buildings Maintenance Management System to capture data on structural conditions of buildings for decision making on prioritization on maintenance treatments and interventions.
IMPROVED PROJECT MANAGEMENT
- Concentration on the planning, implementation, monitoring, evaluation and reporting functions of the Technical Department, in particular.
- Improved Contracts Management through the recruitment of a well-qualified Contracts Manager.
- The Ministry intends to strengthen its planning function through the inclusion of a Infrastructural and Transportation Planning Unit, staffed with skilled personnel to conduct research and develop the necessary short, medium and long term plans of the Ministry.
BUILDING CAPACITY IN THE CONSTRUCTION SECTOR
- Assistance to small and medium sized contractors through training in Estimating, Bid Preparation, Project Management in order to meet the criteria of international funding agencies.
- Providing concessions to engineering and construction firms for importation of specialized equipment and supplies
- Institutionalize an Apprenticeship Program for Engineers to provide exposure to the work of the Ministry.
IMPROVED STAKEHOLDER RELATIONS
- More use will be made of the mass media to inform on project execution that will inconvenience the public.
- Greater collaboration with major stakeholders of the Ministry including Engineers’ Association, Taxi and Minibus Associations, Insurance Council, Garages, etc.
LEGAL AND REGULATORY FRAMEWORK
- Strict adherence to the Finance Act and Procurement and Stores Regulations.
- Review of the Works and Roads Act to bring it in line with current practice and standards in order to safeguard the public infrastructure.
- Development of a Meteorological Services Bill. At present there is no legislation which supports the mandate and authority of this Department.
- Review of the Saint Lucia Air and Sea Ports Authority Act to clarify regulatory functions of the Authority, to improve the tariff which is outdated, and to ensure harmonization and consistency with other related Acts such as the Shipping Act and the Civil Aviation Act.
- Recognizing the cost to the State for mortality and morbidity resulting from road accidents, the establishment of a National Road Safety Committee made up of key stakeholders such as the Ministry of Health, Police Department, Statistics Department, to prevent road traffic crashes, minimize injuries and their consequences.
- Improve traffic circulation through the identification of appropriate locations for bus terminals and erection of laybys along bus routes.