Funding the budgeted expenditure will require creativity from the Central Government – PM

Funding the 2015 budgeted expenditure of $971.37 million will be a challenge and will require creativity from Central Government.

This admission was made by Prime Minister and Ministry of Finance Dr Ralph Gonsalves, as he presented the 2015 Budget to Parliament on Wednesday.{{more}}

He said the total expenditure of $971.37 million comprises current expenditure of $560.8 million, capital expenditure of $296.35 million, amortization of $101.49 million and contributions to sinking fund of $12.7 million.

“Funding these expenditure in a timely and efficacious manner will require creativity from the Central Government; it will be a challenge which demands the most prudent implementation of priorities on the expenditure side, and more efficient collection of revenues, and robust public administration,” he said.

The budgeted deficit on the current account has been estimated at $28.5 million, a figure the Prime Minister said could be eliminated by restricting expenditure and rigorous collection of taxes.

“This deficit can be eliminated by application of an expenditure management programme to restrict expenditure to no more than ninety-five percent of budget. Additionally we plan to pursue a rigorous arrears reduction programme to collect a part of the considerable sum for tax arrears due to the Inland Revenue Department. We thus expect that current revenue will exceed the estimated amount of $532.34 in the 2015 estimates.”

He said financing for the capital budget will come from a mixture of grants, loans and capital revenue.

“Total grants expected for the year amounts to $62.8 million including $30.19 from the European Union, $10.0 million from the Government of Ecuador, $8.64 million from the republic of China on Taiwan, $5.13 million from the Caribbean Development Bank and $4.15 million from the Climate Investment Fund.

“Drawdowns on external loans during 2015 are expected to amount to $72.46 million; mainly from the Caribbean Development Bank in the amount of $26.63 million, IDA in the amount of $18.0 million, the Government of Venezuela, $14.5 million and the Republic of China on Taiwan, $6.83 million.”

The Prime Minister said other sources of funding for the capital budget include domestic borrowings of $71.07 million, sale of assets of $25.65 million (representing the final installment of US$ 9.5 million due on the sale of land at Canouan), a contribution of $16.59 million expected from Petro Caribe and the sale of crown land of $1.0 million.

“As usual we also intend to source other funds which have not been specifically provided for in the Estimates, because no firm agreement had been reached at the time of preparation of the Estimates. In this regard, the Government is actively pursuing other grants and loans from friendly governments and multilateral institutions. We are also examining the feasibility of sale of other state assets which can earn substantial revenue for the Consolidated Fund and spur wealth-creation.”