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St Lucia on a slippery fiscal slope, says MP
Published on May 6, 2014 Email To Friend    Print Version

By Caribbean News Now contributor

CASTRIES, St Lucia -- On the final day of debate on the 2014/2015 estimates of expenditure in the House of Assembly, opposition member Richard Frederick said that new and innovative revenue measures were required “to halt the slippery slope on which Saint Lucia finds itself from a fiscal standpoint.”

richard_frederick8.jpg
Richard Frederick
According to Frederick, direction is necessary to lead Saint Lucia on a better path, based on the two days of debate on estimates of expenditure, which painted a miserable financial statement of the island’s finances.

“Once again, we cannot finance our monthly bills with our monthly earnings, so we have to borrow to finance, not only our recurrent expenses, but all capital projects as well,” he pointed out.

“Two things need to be done. We need to desperately cut our expenditure, especially recurrent, and attempt to increase our revenue intake. And although there has been a slight decrease in our recurrent expenditure of $22 million from the estimates, this has to be just the beginning,” he continued.

He noted a disparity in the law that prejudices revenue collection between government departments. On the one hand, he said, manufacturers who, having collected taxes on behalf of the government and people, are permitted to roam the streets without any sort of arduous effort being made to collect those monies, whilst an importer, whose goods are at customs is sometimes held to ransom.

Frederick said that revenue collection could be improved if the Inland Revenue department went about its business in a different fashion.

“I have vented my vehement opposition to the way things are done there. Once there is economic activity, there will be collection of taxes. But if from the onset you prevent a man from getting a ten million dollar loan because he probably owes some income or property taxes, how on earth can he cause the stimulation of economic activity, create jobs, all of which are taxable? So at the end of the day, we have to put in place mechanisms that will cause our collected revenue to far surpass the estimates,” he said.

Frederick pointed out that public sector salaries and wages, which include National Insurance Scheme (NIS) contributions and retirement benefits, amount to an alarming 47.59% of recurrent expenditure, totaling some $440 million.

Another very worrying figure within the estimates, he said, is the allocation to rental payments, which take up 4.09% of recurrent revenue, or approximately $38 million on renting properties every year.

“Something has to be done about that almost immediately!” he said.

“If the government of Saint Lucia spends $38 million a year putting up a building, every year we can build and own a building like the ministry of communications and works, debt free because we can construct that building for that sum or even less and in five years, we can probably have five of those buildings, paid off because we are using the rental expenditure to build them and have them debt free and, in a very short time, bring this expenditure almost to zero. That is why I am in total support of owning as opposed to renting,” Frederick explained.

“It’s about time the government and people have something to show for the enormous expenditure parliamentarians are called on to approve every year in the name of the people of Saint Lucia,” he concluded.
 
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