Nevis Premier presents 2010 M$1.64 Budget; no new taxes
Premier of Nevis and Minister of Finance Hon. Joseph Parry, presented a 2010 budget of M$1.64 with no new taxes themed “Re-orienting economic activity by fostering a competitive business and investment environment”. The budget address was delivered at a sitting of the Nevis Island Assembly on Wednesday.
The Budget represented a 6.36 percentage increase over the M$1.53budget of 2009 which has been attributed to the impact of the global recession.
“Planned Capital spending for the period is $37,717. Such capital investment will be financed $18,325,473 from revenue; $17,574,544 from loans and $1,817,272 from development aid.
“Projects such as the Water Network Rehabilitation, Renewable Energy, Police Barracks, Cotton Ground Police Station construction and the St. Thomas Primary School expansion are included in the capital estimate,” Mr. Parry said.
The Ministry of Finance received the biggest bite of M$59.7 from the budget, which will be used for debt servicing. The Ministry of Education came second with a M$17.1, the Ministry of Health followed with M$13.3 and the Ministry of Communications M$9.7.
Mr. Parry spoke of the programmes that would continue during 2010 and important ones related to security that would commence. He pointed to the water drilling programme which he said, would continue to ensure adequate capacity for a growing economy. The year will also see the continuation of the Road Improvement and Maintenance of Schools projects.
“My Administration is highly committed to providing adequate security for both nationals and residents. To demonstrate such commitment, we propose to undertake several projects to improve the condition of law enforcement officers.
“Combined costs of these projects are $2,315,070 with estimated spending for 2010 being $1,948,623. Sequenced according to financial significance, those programmes include the purchase of land and construction of a new Cotton Ground Police Station, construction of Police barracks at Belle Vue and the repair of the old Cotton Ground Police Station,” he said.
Mr. Parry said some of the obstacles which Nevis faced in 2009 due to the global recession would undoubtedly continue to affect the island in 2010 and the projected outlook for overall activity was less than upbeat.
In that regard, the budgeted current revenue was set at $101,446,000 for the fiscal year 2010. The Ministry of Finance is expected to collect $84,608,000. The collection includes $33,989,000 at Customs, $38,759,000 at Inland Revenue and $11,619,000 at Financial Services.
The total revenue on taxes was calculated at $72,341,000 where subsidiary reduction was expected for taxes on income.
The Finance Minister explained that taxes on domestic goods and services collected at the Inland Revenue Department would continue to suffer from low receipts for Hotel and Restaurant Tax and Stamp Duties. Customs collection for taxes on International and Trade Transaction would see a drop of 11.94 percent compared to the 2009 projections.
He said declines in Import Duties and Consumption Tax were the major attributors to the reductions and the Financial Services Department revenue was also expected to shrink due to a decline in non tax revenue.
However, he said the estimated current expenditure which included principal repayment and transfers for 2010 stood at $125,830,000.
“This represents a nominal increase of 6.9 percent over the 2009 estimates which was $117,687,000. The most noticeable increase in the allotment to ministries was in the Ministry of Finance, whose increase is predominantly for debt servicing.
“The temporary rise in debt servicing is inevitable as it is needed to buttress the short term decline in revenue. Accordingly, it takes up a significant portion of current spending contributing to 30.10 percent of its total,” he said.
According to Mr. Parry, compensation to employees (salaries, wages & allowances) remained the most significant spending area in government.
“Budgeted at $53.8 million, it [compensation to employees] is 42.75 percent of current expenditure. The provision for transfer for the period is $2,549,700 down from $2,681,000 in 2009. Moreover, the amount appropriated as pension and gratuities is $4,500.000,” he said.