By Benjamin Flowers
Prime Minister Dean Barrow presented his 2015/16 budget, last Friday in which he gave notice that his government would be doing some substantial capital spending through the Petro-caribe Fund.
“The policy of this Government will therefore be to continue to exploit its current access to concessionary funding to drive infrastructure, work, poverty-alleviation and social protection for as long as it can,” Barrow explained.
The new budget marks the second time government expenditure will exceed exceed a billion dollars. Barrow put total budgetary spending at $1.1 billion while total revenues and grants are estimated at $980 million.
While holding firmly to the policy of no new taxes, the Prime Minister announced salary raises for teachers and public offi-cers and a substantial boost for development and infrastructure spending.
Needless to say, the overall deficit has been advanced by to 2.5 percent of the country’s gross domestic product (GDP), or some $88 million, the most it has ever been.
The PM added that another $86 million would have to be added to this for loan amortization, bringing the country’s total financing debt for this year to $174 million.
These 2015 over-budget spendings will be butressed from several sources: from $40 million in loans already contracted with multi-lateral development par-tners, $20 million in generous budget support financing from the Republic of China (Taiwan) under t on-going bilateral economic cooperation program;$41 million from Belize’s own domestic financing, and a further draw-down from the PetroCaribe Fund of some $73 million.
Central Gov-ernment’s debt to projected to increase by $102 million to $2.7 billion, the equivalent of 76 percent of GDP for the 2015/2016 fiscal year. .
External or foreign obligations make up 85 percent of the debt, while the remaining 15 percent is from domestic sources.
The 2038-Bond payments account for 48 percent of Belize’s external debt, while the debt to Venezuela through PetroCaribe is projected to climb to 14 percent of external debt.
No New Taxes
The Prime Minister empha-sized that this new budget, the eighth under his administration,will involve no new taxes.
For the past five years in succession the Government has increased spending and carried out numerous de-velopment and social programs without calling on the country to pay any new taxes.
He explained that government will rely on lifting revenue flows through improved tax administration and the closing of existing loop-holes.
“We will focus our efforts on tax auditing and on monitoring fiscal concessions and on cracking down on GST evasion,” Barrow said.
Teachers and public officers
Teachers and public officers will be getting another raise-of-pay in the new fiscal year, Mr. Barrow announc-ed. Under the salary adjustment framework, government has allocated some $20 million for pay raises for teachers and public officers, but this figure is not set in concrete, and is subject to change.
“As a place-holder only, we have allocated the sum of $20 million in the Capital II Program to fund the raise of pay. This translates into at least a 4 percent jump for these GOB employees, and it is on top of last year’s 6 percent. …It may end up being a little more or a little less, depending on the final recurrent figure,” Barrow said.
He added that the pay raise is the second under his administration, constituting a 10 percent increase within just two years.
Under the proposed frame-work for Salary Adjustment for Public Officers, Teachers, and Senior Managers, for the three-year period 2014 to 2016, the Government made a commitment to apply fifty percent of any increase in the difference of actual recurrent revenue performance between suc-cessive fiscal years toward an annual salary raise, retroactive to April 1 2014.
The Prime Minister said that the UDP’s success in municipal elections, particu-larly in southern Belize, will cause some changes to the budget because more funding will be allocated toothose areas that are now UDP municipalities.
“To take the two obvious examples, the citizens of Dangriga and Punta Gorda have a right to expect immediate relief from the punishing effects of the mal-admiistration inflicted upon them by the outgoing PUP Town Councils.
Among other things it will take Central Government money to assist in their return to progress”, Barrow said.
The Prime Minister also highlighted advancements in areas of education, health care and national security.
Budget indi-cators show that the Central Bank of Belize realistically expects GDP growth to ebb to between 2.0 percent and 2.5 percent this fiscal year – down from the optimistic forecast of 3.6 percent foreseen in the last budget.