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| Hon Vance Amory Premier and Minister of Finance in the Nevis Island Administration |
CHARLESTOWN NEVIS (December 7, 2005) -- Premier and Minister of Finance Hon Vance Amory announced there would be no additional taxes for the fiscal year 2006 but instead revenue would be increased through the improved efficiency in tax administration and the collection of outstanding arrears.
Mr Amory's announcement came while delivering the 2006 Budget Address during a sitting of the Nevis Island Assembly on Wednesday December 7, 2005.
The Finance Minister estimated a budget of $97.87 million for the fiscal year 2006 forecasting an increase of 18.15 percent over the amount estimated in 2005. The recurrent expenditure however, is estimated at $88.86 million, an increase of 9 percent over the estimated budget for 2005 resulting in a projected surplus of $9million on the recurrent account.
According to the Minister of Finance, capital revenue derived from loans and developmental aid for 2006 is projected at $55.40 million while Capital Expenditure is estimated at $69.92 million with the need to finance $14.52 million of the capital budget from current revenue.
Among the allocations for 2006, Tourism received $4,230,870; Culture received $961,448; Financial Services received $1,883,637; Education and Training received $12,714,877; Health and Social Services received $10,906,385; Youth Development received $1,114,440 and Agriculture $3,751,568.
He regarded the deficit as being more than the surplus projected on the recurrent account and therefore expects an overall deficit of $5.52 million. Notwithstanding, Mr Amory explained that it was noteworthy that the overall deficits over the last five years came after the shocks of 1998, 1999, 2000 and 2001 have been declining gradually as a result of the Administration's tightening of its fiscal policies.
The Finance Minister disclosed that despite the many challenges Nevis' economy faced last year the revenue position of the government has began to demonstrate a gradual upsurge which he is confident will continue into 2006.
"The fiscal position of the Nevis Island Administration has strengthened over the past year. Revenue collection has improved markedly and this has helped the government to keep its debt level in check.
"We are very optimistic that the economy will continue to strengthen and will continue to show signs of buoyancy in 2006 and beyond as the government implements its development policies and programmes to increase employment and investment throughout the economy," he said.
Mr Amory explained that Nevis' actual recurrent revenue outturn for 2004 amounted to $77.70 million, a significant increase of $12.16 million or 18 percent over 2003, which was mainly due to increased efficiency in revenue collection at the Customs Department. The total recurrent expenditure amounted to $83.13 million, an increase of $9.85 million or 13 percent over 2003 which resulted in a deficit on the recurrent account of $5.43 million which was due mainly to the 10 percent increase in salary and wages which was granted to all public servants.
Mr Amory noted that capital revenue declined from $43.44 million in 2003 to $10.83 million in 2004, a reduction of 75 percent which he attributed to a direct result of a fall off in grants and developmental aid, as well as the Administration's conscious decision to reduce its borrowing to bring down the debt levels without jeopardising the government's investment programme.
Regarding the matter of Nevis' debt accumulation, Mr Amory said it had not reached a critical point contrary to the thinking of some.
"Over the years the government of Nevis has paid its debts and has gained a good reputation in this regard. Matter of fact, the Nevis Island Administration has successfully negotiated with AIC a US$15million loan to fund the Road Improvement (RIMP) III Programme.
"We are only awaiting a Federal Government guarantee to finalise the agreement with Surrey Paving to commence the road construction which is vital to the overall development of Nevis.
"While we are well aware that unsustainable debts could impede the progress we have made over the years, your government will continue to source funds to carry out its public investment to ensure the growth in the economy continues and consequently, we call on the people of Nevis to exercise patience as we seek to meet your demands for good quality social and physical infrastructure such as roads, schools, water and health services," Mr Amory said.
Mr Amory said despite the strides in development that Nevis has made there is no time for complacency as there are still many challenges that will be confronted on the journey to prosperity for all.
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| A section of the gallery at the Nevis Island Assembly |
He said the NIA had taken some bold initiatives to stimulate economic growth and development in Nevis and that the debt incurred by the island was necessary and it will remain necessary for the Administration to incur additional debt for future growth and development just as other countries in the Caribbean have been forced to rely on debt financing to continue their development thrust.
"However, we recognise that the accumulation of debt must now be given serious attention. We have started to implement fiscal policies to improve the management of our debt stock and the last review conducted by the International Monetary Fund during their article VI consultation revealed that we are in fact making significant progress," the Finance Minister said.
Mr Amory also took the opportunity to clear the air on a referendum for the independence of Nevis citing that the issue was still alive and would continue to live in the hearts and minds of all true Nevisians and in the leadership of the government until this aspiration is achieved.
"The time will come when all Nevisians will be called upon again to take a stand for justice and freedom for our country without rancour or divisiveness. I believe this is an earnest expectation of all right thinking Nevisians. When the time comes, every man and woman will be expected to stand up and be counted," he said.
