Road Town, Tortola - Premier and Minister of Finance Honourable Ralph T. O’Neal, OBE, announced during a 50-minute Budget Address delivered at the House of Assembly today that Government’s projected revenue for 2010 is $271,666,000 and its operational expenditure is $250,517,000.
The reduction from last year’s estimate of $252,465,400 reflected what the Minister of Finance said was Government’s focus to further cut back on operational expenditure. In his introduction of the Budget Address, Finance Minister O’Neal said, “The past year has been fraught with challenges. The worldwide economy on which we depend suffered a major slowdown that caused many economies in the Caribbean to experience significant challenges.”
He continued, “We must become more efficient and effective in advancing the cause of our people.” Hon. O’Neal added that in order to achieve this, there must be “benevolent and visionary leadership, trust and support of each other, and a deep and single-minded commitment to participating in this global village. These components are essential ingredients to realising socio-economic success in the Virgin Islands.”
The Premier and Minister of Finance further stated that the Government recognises that “there are many expenses that can be reduced and processes that can be re-engineered to realise a less costly and more efficient institution.”
Honourable O’Neal noted that initiatives to reduce costs include the reduction of waste and high costs associated with the public sector, in concert with significant efforts in revenue enhancements; an increase in the taxation of alcohol and tobacco, a comprehensive review of existing tax and fee legislation rates; along with an attempt to reduce the number of public servants through the existing workforce planning programme.
He also noted that after contributions are made to commitments in the Development, Pension, Reserve, Emergency Disaster, Contingencies and Repairs and Renewal Funds, the Territory will have a sum of $18,149,000 to fund the development portfolio. He explained that the sum “indicates that the majority of capital works for this budget cycle may have to be done through debt financing and that our modus operandi, in respect of operational spending, is thoroughly examined and its cost reduced.”
The Premier and Minister of Finance reported that at the end of 2009, total revenue collected amounted to $268,607,550, while Government’s recurrent expenditure amounted to $275,486,962, which resulted in an overall deficit of $6,879,412.
Honourable O’Neal also reported that “78% of total operating expenditure was spent on salaries, pensions and departmental expenses.” He continued, “Although revenues fell 5%, Government was still able to maintain most operations at previous levels.”
The theme of the 2010 Budget Address was Creating a Legacy of Sustainability. In an interview with the Department of Information and Public Relations, Financial Secretary Mr. Neil Smith explained, “The theme expresses Government’s response to the fiscal trends, which are currently not sustainable and delivers the message that action needs to and will be taken.”
That action, Mr. Smith said, is to cut back significantly on operational expenditure. “The Government is seeking ways to increase overall efficiency, and improve effectiveness in how we implement sound forward thinking policies. Fundamental as well is the manner in which they will address the two major expense areas, personnel costs, and departmental expenses.”
Following today’s presentation, the budget will be now referred to the Standing Finance Committee of the House of Assembly for deliberations scheduled to begin on March 9. The deliberations will involve meetings with heads of all ministries, departments, as well as statutory boards, to discuss their respective budgetary submissions.
British Virgin Islands News