Finance Minister Hon. E.J. Saunders in the House of Assembly on October 6.
The Following is the entire Supplementary Budget Presentation by Finance Minister Hon. E.J. Saunders in the House of Assembly on October 6.
Mr. Speaker, following up from Monday when I laid the 2nd Supplementary Appropriation Bill for FY 2022/23 in this Honourable House, I rise today to Table the same.
Mr. Speaker, I started off my speech on Monday by stating that “globally, 2022 has been challenging with unprecedented inflationary conditions”.
Well Mr. Speaker, according to J.P. Morgan’s research on “how the rising cost of living is impacting spending on consumer staples.” (September 14, 2022):
• “Inflation is running red-hot — largely fueled by the ongoing supply chain crisis and the Russia-Ukraine conflict, which are in turn increasing food prices and energy prices.”
• “In the U.K., inflation recently hit double digits for the first time in 40 years and is expected to climb to around 15% in 2023.”
• “Similarly in the U.S., inflation peaked at 9.1% in 2022, marking another 40-year high.”
J.P. Morgan Research expects the global Consumer Price Index (CPI) — which measures the change in prices consumers pay for goods and services to “rise again in the 3Q of 2022 (i.e. the July – September period), reaching around 7.5% in the H2 of 2022 (i.e. July – December period). This is up from around 6.6% in H1 of 2022, in part due to rising raw material costs.”
Mr. Speaker, according to the World Economic Forum, “The cost-of-living crisis is having a global impact.” (Sep 21, 2022):
• With the soaring cost of food and energy is affecting people across the globe.
• And with United Nations Development Programme estimating that an additional 71M could be pushed into poverty.
“For many people across the world, the food that they could afford yesterday is no longer attainable today,” says United Nations Development Programme Administrator, Achim Steiner.
Mr. Speaker, it is stated in Nearshore Americas that “As of June 2022, inflation surpassed 10% in as many as 13 countries, according to the Economic Commission for Latin America and the Caribbean (ECLAC).” - Cost of Living Keeps Rising in LATAM Despite Efforts By Central Banks.
Mr. Speaker, startling, but not entirely surprising, an Ipsos poll conducted in May on behalf of the World Economic Forum found that 25% of the population in 11 developed countries were struggling financially. And that in the UK, almost 15% of the adults polled say that they can’t afford to eat every day, (that’s) an increase of 57% since January.
Mr. Speaker, according to The Japan Times Mr. Speaker, “Governments globally are coming under immense pressure to cushion the blow of surging food and fuel prices.” (Sep 13, 2022) And according to the World Economic Forum, “Governments are bringing in measures designed to ease the impact of inflation, including:
- tax cuts,
- free train travel,
- energy subsidies, and
- cash transfers.”
Mr. Speaker, as you can recall, to combat inflation (domestic and imported), our government so far has:
• cut taxes (i.e. fuel tax and CPF on selected items),
• provided energy subsidies by subsidizing Fortis TCI fuel factor to cap it at $0.20, and
• provided cash transfers of $2,500 per qualified adult through 3 stimulus programs.
And if we had a train, I am sure we would have given free rides on it Mr. Speaker.
Mr. Speaker, our government anti-inflation and anti-increase in cost-of-living measures are no less than those in developed countries. We are taking care of our people the same way the “big boys” are taking care of theirs, and we’re probably doing it better.
Mr. Speaker, as we want our message to also resonate with a younger audience, I want them to know that when it comes to taking care of our people, this good government of the people is “G’ing with the big boys”!!! And we’re doing it despite the fact that, according to the International Monetary Fund (IMF), “Smaller Economies in Latin America and Caribbean Face a Bigger Inflation Challenge” (September 19, 2022).
Mr. Speaker, when it comes to addressing the rapid rise in inflation and the cost of living, our government continues to work hard and deliver for our people, because we were taught that “[we] can do all things through Christ which strengthened me”, we, and our entire 14-1 government (Philippians Chapter 4, Verse 13).”
If this was church Mr. Speaker, I’d ask for an Amen.
Because we know can do all things through Christ Mr. Speaker, we will utilize this Supplementary Budget that we are tabling here today:
1. to continue to address the inflationary and cost of living pressures that I just spoke about,
2. to continue provide relief for the most vulnerable among us,
3. to allow the government to aggressively respond to the surge in crime, (Mr. Speaker, very shortly the world will see that we have taken this very seriously) and
4. to make provisions for disaster recovery following Hurricane Fiona, specifically to allow the government to Build Back Better.
Mr. Speaker, our Build Back Better approach will integrate Disaster Risk Reduction measures into the restoration of our physical infrastructure, and social systems and shelters, as well as to the revitalization of livelihoods, our environment, and our overall economy.
By Building Back Better Mr. Speaker, our government, and our islands, especially our vulnerable islands, will be able to resist, absorb, and recover from the effects of a hazard in a timely and efficient manner, including the preservation and restoration of essential basic structures and functions.
Mr. Speaker, as I reported on Monday, government revenues have ticked upwards, and it is forecast to come in at $404.2M (including a Caribbean Catastrophe Risk Insurance Facility payout of $670k and grants and contributions of over $790k). This is an improvement of $1.45M.
I had visions that we could get to $400M in revenues by the end of our term in mid-2025, but God in his infinite wisdom saw fit to get us there sooner. Mr. Speaker, what we’re seeing today is summed up well in Psalms Chapter 107, verse 37, where it is stated that “They sowed fields and planted vineyards that yielded a fruitful harvest.”
Through this Supplementary Budget Mr. Speaker, our government is seeking to increase our projected Expenditure for this financial year by an additional $18.4M (4.5%), bringing it to a historic $420.3M.
Mr. Speaker, the Leader of the Opposition always claims that our government can do more, so please permit me to speak directly to him now Mr. Speaker.
Mr. Leader of the Opposition, not only is our government doing more, we are doing it historic levels.
Mr. Speaker, a member of the public said that our government “should spare no expense”. Well Mr. Speaker, not only did we not spare any expense, but some may say that we broke the bank, as this Supplementary Budget will take us from a projected Surplus to a Deficit.
This unfortunately has become necessary following:
1. a surge in violent crime, particularly on Providenciales (HE The Governor spoke extensively to this during his Address and the Speech from the Throne on Monday),
2. approximately a 10% rise in inflation since budget approval in May 2021, and
3. the impact of hurricane Fiona on the islands.
To fund the additional spending, our government will draw down $16.0M from our Cash Reserves, which now stands at $240M, up from $189M at the start of the FY (i.e. at 1st April 2022).
Mr. Speaker, please note, and for the fiscally conservative among us, and those in the public, that although we are projecting a deficit budget for this FY, we are projecting a return to sustained surplus budgets in the medium term, if not before.
And Mr. Speaker, although I stated it on Monday, I want to reiterate again that all the debt sustainability ratios agreed between the Turks & Caicos Government and the UK Govt. continue to be met, specifically:
• liquid Cash Reserves now stand at $240M, which equates to 212 Days Cash; (What does that mean Mr. Speaker? That means that if the TCI economy shuts down today, and our government was unable to generate not even $1 dollar or revenue, we could pay all our bills for up to 212 days.
• For reference Mr. Speaker, the UK government requires us to keep a minimum of 90 days’ worth of cash reserves, we’re at 212 days! And Mr. Speaker, my long-term goal is to increase this to 365 days. God forbid, if we ever go into another prolonged lock-down again, one thing is for certain, the TCI will not have to, as the saying goes, “beg, borrow, or steal” to pay its bills. That’s prudent financial management. And that’s your government, the people’s government, working on the people’s behalf.
• Mr. Speaker, Net Debt as a percentage of Core Revenue is negative (that’s a good thing), and
• the National Debt Service currently stands below 0.1% of Core Revenues – i.e. that means that it’s less than $400K.
Mr. Speaker, that was a bit of re-cap of how our government is earning money on behalf of the good people of the Turks & Caicos Islands.
Now l will turn my attention to, and inform this Honorable House, as well as the general public, on how our government is planning on utilizing the additional funding in this Supplementary Budget on behalf of the good people of the Turks & Caicos Islands.
1. The Police is getting $554K, to allow them to get a much-needed base salary increase of 10%.
2. Mr. Speaker, our government is allocating $1.5M to address the surge in crime, particularly on Providenciales. This funding will be used to provide support and tools to assist the RTCIPF Tactical Unit to identify, locate, and apprehend suspects of serious crime. With this funding, we will achieve a) Enhanced safety for Police Officers, b) Offenders brought to justice, c) Increased public safety, and d) Increased trust and confidence in policing.
Mr. Speaker, I take comfort, as well as confidence, that these funds are being well spent, because in the words of Psalm Chapter 44, verse 5, which states “Through You we will push back our adversaries; Through Your name we will trample down those who rise up against us.”
3. Mr. Speaker, and Madam AG, the Attorney General’s Chambers is getting an additional $800K to support Judicial Administration, and $45K is being allocated to launch the Judiciary’s electronic Case Management and Electronic filing project (i.e. “E-Judiciary”). $250K is also being made available for the hiring of additional staff.
4. Mr. Speaker, the Ministry of Immigration and Border Services is also getting $91K for the hiring of additional staff. In addition, our government is making available $500K for Repatriation and Detention Expenses.
5. Mr. Speaker, my ministry – i.e. Ministry of Finance, Investment and Trade – getting $200K for a long overdue clean-up of the SIGTAS tax management software.
6. Mr. Speaker, the Deputy Governor's Office is getting $50K to increase allocation to the Professional Development Fund, as well as an additional $150K to conduct a Job Reclassification Review.
7. Mr. Speaker, the Ministry of Education, Labour, Employment and Customer Service is getting $55K to allow for the hiring of an additional Permanent Secretary to strengthen support for the Labour Department. And the Sports Commission is getting a Subvention of $298K to allow it to continue to grow sports in the TCI.
8. Mr. Speaker, Home Affairs, Public Utilities and Transportation is getting:
• An Additional $612K to fund Foster Care;
• An Additional $305K to fund Social Enhancement (i.e. welfare benefits); and
• An Additional $179K to fund Grants and Contribution.
Mr. Speaker, our government has allocated $2.5M (let’s call it a “mini Stimi”) to subsidize the electricity Fuel Factor, where it is being capped at $0.20 during the September – December 2022 period. Mr. Speaker, As Fortis TCI bills went out last night, 5th of October 2022, this initiative by our good government is already saving our residents hundreds of dollars on their monthly electricity bills.
Mr. Speaker, our government is providing $718K in funding to implement project “Transitioning Towards Green Energy in the Turks and Caicos Islands”. This project is designed to accelerate our islands migration to sustainable energy, increase energy resilience, and to support green economic recovery.
Mr. Speaker, $300K is being approved to allow the TCI Telecommunications Commission to hire consultants to start the preliminary work around the build-out of a domestic fiber optic cable connecting Providenciales to North Caicos, Middle Caicos, South Caicos, Grand Turk, and Salt Cay.
Mr. Speaker, this is an example of our government Building Back Better. When the domestic fiber optic cable goes live, it will make the experience of islands, especially the Nation’s Capital, experiencing poor telecommunications services after the passage of a storm, a distant memory.
9. Mr. Speaker, the Ministry of Physical Planning and Infrastructure Development (PPID) is getting $2M to allow it to conduct a number of restoration, repairs, and cleanup projects to put our islands back to state of normalcy.
Mr. Speaker, in addition, a number of Government offices and facilities have been impacted by hurricane Fiona and is in need of repair. This funding will allow the Ministry of PPID to move forward, and I would say in haste, with much needed restorative works.
10. Mr. Speaker, the Ministry of Tourism, Agriculture, Fisheries, Heritage and the Environment is getting $80K to develop and rollout the "TCI Agriculture Development and Food Security Plan", which will see the build-out of a domestic climate-resilient and sustainable agricultural systems, thereby strengthening our national food security and nutrition in the short, medium, and long terms, while protecting our water supplies and soil.
Mr. Speaker, $71K is being made available to utilize funding received from the Joint Nature Conservation Committee (JNCC) to support project "Sustaining Queen Conch Fisheries and livelihoods in the Turks and Caicos Islands (TCI)”.
Mr. Speaker, and the Hon. Minister of Tourism, $250K has been allocated to support the continuation, and successful operation, of the all-popular Island Fish Fry on Providenciales; and an additional $100k for the production and distribution of promotional items; and another $100k for product development.
Mr. Speaker, we have a high-end tourist product, and we are committed to producing 5-Star marketing content to match our 5-Star brand.
11. Mr. Speaker, the Ministry of Health and Human Services is getting an additional $485K to be used to increase the Dialysis services capacity within the local clinics. As a good government of the people, we have an obligation to support those persons who are not healthy, including those persons who are living with chronic illnesses, and we are meeting that obligation.
12. Mr. Speaker, the Office of the Premier is getting $2.7M to facilitate stimulus payments ($700K) to those persons who have not received the $500 stimulus payment nor the current $1,000 stimulus payment, and $2M to provide for Citizen Relief from those affected by Hurricane Fiona.
Mr. Speaker, an additional $1.25M has been allocated to cover increased cost associated with the Delivery Unit, which is providing high-level project management for 10 high priority projects – including the domestic fiber optic cable.
Finally, Mr. Speaker, $3.5M is being used as Capital Contribution to increase the Development Fund.
In closing Mr. Speaker, I would like to let the good people of the Turks & Caicos Islands know, that despite the challenging times that our country is currently going through, our government’s resolve is strong, and we are committed to addressing each and every issue to the benefit of our people, and I am confident that we will succeed because we have been taught in Jeremiah Chapter 1, verse 19 that although they will fight against us, they will not overcome us, for the Lord is with us, and he has promised to deliver us.