Roadtown, Tortola - Mr. Speaker, much has been said about the financial status of the Government of the British Virgin Islands and our ability or inability to sustain ourselves. But yet even as I crave your indulgence Mr. Speaker but a short, I am reminded of a quote by the former Prime Minister of the United Kingdom, Sir Winston Churchill who said: “The truth is incontrovertible, malice may attack it, ignorance may deride it, but in the end; there it is.”

I therefore will seek to illustrate certain facts about our fiscal situation today that will provide the people of this Territory with information on which they can formulate an accurate picture in their minds about the task that lies before us.

Mr. Speaker, we budgeted revenue for 2009 optimistically at two hundred seventy nine million, eight hundred forty one thousand dollars, ($279,841,000.00), hoping to have stimulated the economy through the implementation of various infrastructural projects throughout the Territory. 

Foremost among these is the National Sewerage System, which unfortunately has suffered some delays and hopefully should commence before the end of this year. Other projects such as the New Incinerator and the New Peebles Hospital are ongoing and should be completed in the near future.

Currently, recurrent revenue stands at approximately one hundred fifty nine million, one hundred eighty thousand, six hundred thirty four dollars, ($159,180,634.00) while operational expenditure comes in at approximately one hundred sixty three million, nine hundred three thousand, two hundred fifty five dollars ($163,903,255.00).

In addition to this Mr. Speaker, we have thus far had an expenditure of twenty four million, eight hundred fifty thousand, six hundred five dollars ($24,850,605.00) from our capital fund, while we have had revenues into it to the amount of twenty two million, eight hundred fourteen thousand, four hundred twelve dollars ($22,814,412.00). The fund Mr. Speaker, in meeting these expenditures was sourced from loan funding and direct transfers from the operational fund, in addition to pre-existing balances.

I must also state Mr. Speaker, that at this time in the fiscal cycle it is a common trend that expenditure surpasses revenue, with revenues rebounding again in the last quarter of the year. Barring any unexpected surprises therefore Mr. Speaker, and based on a revenue projection exercise that was completed just last week, we expect a shortfall in revenue of five percent (5%) when compared to the revenue projections we made for the budget of 2009. We thus anticipate revenue collection at the end of this year to be in the region of two hundred sixty seven million dollars ($267,000,000.00).

In respect to our borrowing, as at the end of this year, 2009, Central Government is projected to have outstanding loans in the region of one hundred thirty seven million, seven hundred twenty nine thousand, three hundred nine dollars ($137,729,309.00), while the Statutory Bodies will hold combined outstanding loans in the amount of twenty five million, six hundred sixty one thousand, four hundred sixty nine dollars ($25,661,469.00). This will vary from what was produced in the budget document of 2009 due to the payments that have been made thus far this year, and the addition of the anticipated loan being brought to the house today.

Further Mr. Speaker, our ten year projection indicates that with our current plans for development and bearing in mind other expansionary factors, we can expect a noticeable, though not alarming decrease in our cash balances during the next two years that is expected to rebound by the year 2012. It is for this reason Mr. Speaker, that I hold the considered opinion that if expenditure is controlled and utilized on initiatives and operations that make the most of the highest value and long term benefit for our citizens, we will come through this storm relatively unscathed.

Mr. Speaker, while I will not go as far as to indicate the exact amounts of the cash balances we currently have, I can state unequivocally that as of the end of last week the Government of the British Virgin Islands had enough cash in our accounts to carry us through ninety (90) days of operations at the present expenditure levels as stipulated in our financial principles and guidelines.

Presently Mr. Speaker, if we include the forty five million dollar ($45,000,000.00) loan we are bringing to the house today, our net debt ratio, which is our net debt in relation to recurrent revenue, is in the region of twenty six point seven three percent (26.73%) (up from eleven point five one percent (11.51%) before the loan) and our debt-service ratio, which is Central Government’s debt service payments in relation to our recurrent expenditure, is in the region of five point three seven percent (5.37%) (up from four point two one percent (4.21%) before the loan).

Mr. Speaker, to put these in perspective, the Borrowing Guidelines agreed to between ourselves and Her Majesty’s Government states that our Net Debt Ratio should be at a Maximum of eighty percent (80%), our Debt Service ratio should be a maximum of ten percent (10%), and we should have a minimum of ninety (90) days of operating reserves or twenty five percent (25%) of our annual recurrent expenditure.

The budget of 2009 which estimated borrowings in excess of seventy million dollars ($70,000,000.00) to fund major projects that would have stimulated the anticipated depressed economy, projected that these ratios would be at twenty two percent (22%), eight point eight percent (8.8%) and one hundred seven (107) days respectively.

Finally Mr. Speaker, I would like to close by saying that though the economy has been predictably worse than in recent years, the Government of the Virgin Islands has thus far been able to maintain the standard of living of its citizens at enviable levels, and intends to continue to strive to keep it this way.

I merely urge the citizens of this Territory and my colleagues in this Honourable House to join together as fellow inhabitants of these islands and cooperate with each other to produce the best results for all.

Thank you Mr. Speaker.