The Government has announced a wave of financial easements in the face of rising inflation caused by external shocks.
Premier Hon. Washington Misick, during a news conference late Thursday, unveiled $16M stimulus package dubbed ‘Price Inflation Stimulus’. In addition, the Premier announced assistance to domestic rent, mortgage and loan repayments as well as transportation.
“While there are some major considerations going on to take some long-term decisions in relationship to the current state of affairs, the government has made some decisions to try to alleviate the current inflationary pressure. And so, the cabinet agreed today to offer Turks and Caicos Islanders what we called a ‘Price Inflation Stimulus’ – a package of $16m,” the Premier announced.
He added: “And what does the package contain? The package has three parts. (One is) direct assistance of $1,000 to Turks and Caicos Islanders and British Overseas Territory citizens…residents estimated at $12M. The benefit will be extended to approximately 12,000 individuals.
“The stimulus is being given to provide relief for homeowners who require assistance with rental payments, provide relieve for homeowners who require assistance with utility bills, relieve homeowners who require home assistance with loan payments and utilities, provide relief for loan repayments, transportation expenses and groceries.”
Stating that government understands the importance of making such a package available to the citizens of the country, Premier Misick said those who previously received stimulus would not have to register for this new one, explaining that it would directly go to their accounts and would be contacted to pick up the check.
“So, it has been agreed that the previously approved list of citizens – Inflation Stimulus Applicants – will be used to distribute stimulus checks. In other words, those persons who are already registered in the system, based on the last disposition, would not have to reapply for the benefit and go through the vetting process.
“Again, if you receive the $500 earlier this year, you do not have to apply for this Inflation Adjustment Stimulus. The payment for you would be processed automatically,” he emphasized.
He also announced that government has agreed to provide a waiver of customs duties and customs processing fees on certain staple and breadbasket items imported to the islands from August 1 to November 30, 2022.
“A further $2M injection is being made in the Works Program, to assist with providing additional jobs in the economy. In addition, cabinet today approved a $600 exemption per returning residents on purchases imported on non-business-related trips. This is a $200 increase from the current $400 currently exempted,” he pointed out.
Additionally, the Premier said government would be removing the process of filling out customs declaration forms at all international airports effective August 1, 2022, on goods valued up to $600.
As a result of the package, the Premier said there would be a reduction in its revenue collection for the current financial year.
“In anticipation of the rise in inflation, cabinet agreed that the approved annual estimates for financial year 2022/23 would factor in a reduction in fuel tax from 85 cents to 64 cents and customs processing fees from 7.5 percent to 5 percent. The planned revenue lost from the initiative was $15m,” he said, noting that the TCI economy was facing similar pressure as its regional and international counterparts.
“The Turks and Caicos, like most economies in the world continue to experience the effects of the Russian invasion of the Ukraine. Rising prices of fuel, supply chain issues, increasing commodity prices and skyrocketing food cost have negatively impacted that the purchasing power of every household.
“And according to the Department of Statistics, inflation is now at somewhere around 9.1 percent. Bills are increasing at such a fast pace that salaries can’t keep up. Households in the lower income brackets are disproportionately washed off because the majority of their earnings are spent on rent, food and electricity, and they have very little wiggle room to recover and buffer further increases.
“While the government is aware anecdotally that residential rent has increased especially in Providenciales, the overall rate of increase cannot be given at this time. But data shows that food has reportedly jumped by 38 percent, and electricity bill by 23 percent,” the Premier revealed.
He added; “The government, through an initiative to proactively track the rising costs of fuel at the pumps in the Turks and Caicos since March 2022, has seen the rising trends. A report issued by the Department of Trade in early July recorded price increases in regular gas per gallon of that month, ranging between 20 cents to a dollar, depending on the island and the station.
“Increases in premium gas ranged from 38 cents to 96 cents, and diesel from 28 cents to $1.58. Gas prices are as high as $7.98 for regular and $7.95 for premium and $7.40 for diesel. So, everyone is feeling the pinch.
As we have done in the past, and as we promised to do at any time when it is required, to make sure that we make investments and take decisions that are in the best interest of our people, to ensure that their standard of living is not substantially impacted by external shocks.”