Commentary: The Turks and Caicos Budget – The good, the bad and the ugly

0
Drexwell Seymour is from the Turks and Caicos Islands. He graduated with a Bachelor of Arts degree in Accounting at age 19 and a MBA in Finance at age 20. In 1992 at age 22, he took and passed all four parts of the CPA exam. He is currently part of a credit union exploratory committee and hopes to have credit unions established soon in the TCI. His articles are also posted on his website www.drexwellseymour.com

By Drexwell Seymour

For the past couple of years, the budget of the Turks and Caicos Islands has been growing at a rate of more than 4 percent. Only one year the budget remained unchanged and that was 2017/18 because of the hurricanes. The biggest increase in the budget was in 2016/17 at a rate of 12 percent. In 2013/14, Budget (B) was 209 million and Actual (A) was 202 million, 2014/15, B was 218 million and A was $246 million. In 2015/16. B was 228 million and A was $264 million. In 2016/17, B was $255 million and A was $263 million. In 2017/18, B was $273 million and Actual was $277 million. In 2018/19, B was $273 and Actual was $277 million. In 2018/19 B was $273 million and A was $309 million and in 2019/20 B is $303 million representing an increase of 11 percent.

The increases in our budget on an annual basis indicate a continuous positive trend in our country. This article will examine the good, the bad and ugly elements of the budget.

The good

Accommodation tax and import duties continue to dominate the budget representing $69,403,664 and $78,485,921 respectively. This is a good indicator that tourism is expected to increase.

The legislation for credit unions was passed in August 2016 and now two and half years later, regulations for credit union are expected to be implemented by June.  Another great initiative is the provision for the trade vocational institute. This is indeed a great milestone and is long overdue.

This budget has provision for the establishment of a ministry of housing and trade. We have such a major housing shortage issue, pricing of housing and an increase in illegal shacks in our country. Hopefully, the ministry will address these issues. Well done on the creation of these ministries.

The government intends to review the procurement ordinance and the cost of living assessment. Should these initiatives become activated, this will be great for all residents.

The bad

Given the changes in the all-inclusive accommodation tax rate, I am not sure the budgeted accommodation tax will be realized.

Work permit continues to be a major revenue earner for the Government projecting $30, 142,059 which is an increase over last year budget and last year actuals. The majority of this is for work permits fees and permanent residence fees. Does this mean more workers are expected to come to TCI? Are the fees increasing? Should we encourage and promote locals living abroad in Bahamas, USA and UK to return home? Perhaps offer some sort of incentives.

Three million was spent to purchase a school building a few days before year-end with the intent to accommodate the vocational institute. That building is not suited for a vocational institute in its current state. Since the Government has already purchased the building, I recommend the government retain the building as a permanent place for the Oseta Jolly Primary School. The Oseta Jolly location in Blue Hills can be used for expansion of the Clement Howell High School since they plan to introduce A-level in the secondary school. I also heard the former Minister of Education recommended that form 3 should be at Clement High High School. I highly recommend that the Government find suited land perhaps next to the Long Bay High School to construct the vocational institute.

If the government is building a complex and has already purchased three buildings on the island of Providenciales, then why Property rentals are increasing in 2019/20 to $5.2 million and remain so in 2020/21. There is a slight decline in 2021/22.

The ugly

NHIB and Hospital charges are the second largest expenditure of the budget in the amount of $54,880,168, with $33,254,427 for NHIB and $21,625,741 for Hospital. This line item is steady over the next three years. Does this imply that the overseas medical treatment costs are not expected to decline? Are there no plans to expand additional services at the Hospital?

The integrity commission made recommendations to changes in the parliamentarians’ allowances since June 2016. These were approved at this budget hearing. I know there are some parliamentarians who have made and are making sacrifices in their career and time to serve in parliament but I think in comparison to the rest of the Caribbean, our parliamentarians are adequately compensated. I don’t see the need to make any changes at this time for any allowances let alone making them retroactively.

Conclusion

I hope this financial year is not like previous years in which projects never materialized and some believe it is due to the absence of project managers. Perhaps the government needs to change the procurement ordinance and outsource project management similar to what was done many years ago.

print

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.