The Budget Address is coming up next week. And I’m told that the Minister of Finance has said there’ll be no new taxes.
Sounds good? Don’t start to relax just yet.
The Minister has to do something.
First, the bonds. I don’t believe that any further interest will be paid on the existing ones. Indeed, they are soon to be a thing of the past.
Please note, I’m referring to bonds, not treasury bills-- which are short-term investments, typically of less than one year’s duration. These treasury bills and public servants’ salaries are the Minister’s last threads of survival.
There are more votes in them. And, as he sees it, if he has to choose between touching the bonds and touching treasury bills and/or public sector salaries and wages, he will touch the former. Whether or not that’s the right decision, he will do that because the record shows that his decisions are nearly always based on politics. His politics.
New bonds will be issued and they will include present bond holders as well as some other Government creditors whose receivables will be transformed into bonds, quite apart from the land-for-debt swaps that are also presently under consideration.
Thus far, three scenarios have been suggested, namely:
(a) a 25-year bond maturing in the year 2036, with a face value reduced by 60% (that’s at least a 60% ‘haircut’, which means, for example, that if the face value of your investment is $100,000.00, you’ll lose $60,000.00, and your new principal will be $40,000.00), with that $40,000.00 being repaid in mortgage-style monthly installments, with no grace period, and with interest payable at 6% until 2015, and at 3%per annum thereafter (also paid monthly);
(b) a 30-year bond maturing in 2041, with a 60% reduction in face value, with the principal to be repaid in semi-annual installments after a 7-year grace period, and with interest fixed at 4% per annum, against the reducing balance; and
(c) a 50-year bond maturing in 2061,with no reduction in face value, with principal to be repaid in mortgage-style monthly installments over 30 years following a 20-year grace period, and bearing interest at 1% per annum.
This information, thanks to the International Monetary Fund (IMF), can be found on the Internet. Go to http://sknmof.com/creditors.htm
Through these new bonds, the Government can reduce its debt significantly. But obviously, its creditors will take a big hit (a haircut of 60% plus is a big, big hit), as will the people of St. Kitts & Nevis. In fact, it has already started.
Of course, prudent management and credibility on the part of the Minister of Finance will be critical going forward. But both are in miserably short supply, having gone from bad to worse over the years, aided and abetted by an environment of blind loyalty, convenience, opportunism, weakness and palpable fear.
This restructuring, along with land-for-debt swaps, etc., may not be sufficient, so the Minister of Finance could be pressed to extract more money from an already beleaguered populace, as he continues to blame the present crisis on God and every other human being but himself.
And you can expect much of the same rhetoric in the Budget Speech.
A good leader comes clean with the people. He doesn’t take them to the cleaners.
He comforts those who are disturbed, and, if necessary, disturbs those who are comfortable. This leader isn’t of that ilk. He comforts the comfortable (although that group has been reducing in size and becoming less and less local), and he disturbs the disturbed (who are increasing in number).
Meanwhile, the questionable decisions continue.
For example, he declared some days ago that he’d grant an exemption from duty to people importing up to $1,500.00 worth of foodstuffs during this month for private consumption.
Why would he be so eager to encourage residents of St. Kitts & Nevis to spend their money in somebody else’s economy?
So what’s going to happen? Yes, citizens in the diaspora will send food to relatives and friends back home. And that’s nice. But apart from that, people will want to see what deals they can pick up in Statia and St .Maarten, which means that money will actually leave our economy.
Some people will be used as ‘mules’ or fronts to bring in their $1,500.00 worth of foodstuff, and enterprising individuals will gather up the goods and run a little action, in the process putting local workers, and local businesses which have to pay the duty, the VAT, the port and payroll charges, the electricity, the salaries and wages, etc., at a disadvantage.
If the Minister of Finance really wanted to give consumers and everybody else in the Federation some comfort for Christmas and Carnival, why didn’t he announce (after having consulted with the private sector) that between 12th-24th December, all foodstuff would be duty free, or at least VAT free?
Of course, his announcement would’ve come either after little or no planning and deliberation; or, alternatively, it might’ve been planned well ahead of time but announced only in the second week of December, more as a political gimmick than anything else.
If he’d announced the temporary suspension of duty and/or VAT, while the Government would’ve lost some revenue up front (as it will with his St. Maarten Shopping Spree), the local economy would’ve fared better.
In addition, those Kittitians and Nevisians who can’t afford to go to St. Maarten and buy even $200.00 worth of food will now lose out entirely, although they’re the ones who most need the comfort and the help.
Similarly, people who choose not to go, or, because of commitments are unable to go to St. Maarten for the Shopping Spree will also lose out.
But that’s not all that the Government, the economy and the people are losing out on, you know.
The present situation is so tough and the tax regime so Draconian that reports from the street suggest an increase in smuggling.
Talk about leakage, and duty free and tax free! And the people who are involved are, in their own way, also ‘taxing’ (robbing) the country.
Smuggling is an old ‘tax’.
No new taxes, just increases on the existing taxes and ‘taxes’, eh?
But I’m still not done with this point.
There’s been a spate of break-ins and robberies recently. These criminals are, in their own perverse and frightening way, ‘taxing’ their victims and the country.
In the Central Street area between College and Westbourne Streets, there have been at least four break-ins of businesses in the past week. One business was ‘taxed’ twice.
The Minister is taxing the people to death, and so are the criminals. If you ask me, the whole thing is criminal, and the good people, as well as the good name, of St. Kitts & Nevis, are the victims.
In a particular robbery, the perpetrators demanded US money, hoping, it’s believed, to send that money to St. Maarten on the boat to buy goods. To spend in the Minister’s St. Maarten Shopping Spree.
Now when these stolen goods are sold, they fetch attractive prices, so some people will be tempted to buy them. And as people sin their souls, the public purse is also robbed, and further expense is incurred by police investigations, court action, lawyers, etc. We’re all ‘taxed’.
That’s what desperation, born largely of the lack of fiscal and administrative common sense and vision, and an utter lack of respect and compassion for local workers, consumers and businesses, can do.
If you want to see a glaring example of this lack of respect and compassion, look at the persons who sell, install and service air-conditioning systems in, of all places, Government offices: they’re here all the way from China.
The Minister of Finance is of the opinion that locals don’t possess the skills to do this work as well as people whom he’s described as “friends of the Government”.
So while they gobble up work in this and other areas of our economy, and while they (and others) embed themselves as the Minister’s darlings and new private sector, the citizens of St. Kitts & Nevis, in whom millions upon millions of dollars and love are invested, end up out of business and jobless, on the outside looking in.
In their own country!
People are coming into our Federation setting up business, and getting jobs, without following, in fact without the slightest regard or respect for the law.
Of course, we must embrace decent, hard-working people who want to join us in our national development. But there must be rules, and they must be made to abide by them. And the process must be managed. Most importantly, and our citizens are not to be disadvantaged.
But they are being disadvantaged. And treacherously so!
Taxed and ‘taxed’ out of business, out of work, out of bread, out of home, and out of their patrimony.
And I can guarantee you that, obsessed with himself as he is, the Minister will do all that he can to turn this situation to his advantage, as he solidifies his new private sector (and source of political funding and other patronage), and sets up the numbers, through inward flows of people from distant lands as well as from the OECS, to form his new voter support base in the next general elections, not to mention how many names of Kittitians and Nevisians are being targeted, even as we speak, for removal from the Voters’ List.
And that would be just another dose of an already existing ‘tax’, this one a ‘tax’ on democracy and on the people‘s sacred right to vote and to have a free and fair election.
A ‘tax’ in the form of the worst kind of violation and rape of the people of this land, short of physically taking their lives, although a man deprived of his dignity, his fundamental freedoms and his democratic rights is a dead man anyway, especially if he accepts the situation. At that point his resurrection is in his own hands.
As I said, no new taxes, but more of the same. A heavier burden, and a heavier injustice being perpetrated against the people of this country.
Taxes and ‘taxes’ killing we.
So no new taxes, eh? Lol.
