Tough Times Recognized by Government and Social Partners at Budget Consultations
On Friday, consultations with the trade unions and civil society on the General Revenue and Appropriations Bill or the Budget took place, succeeding talks with the business community on Thursday. After three hours at the Biltmore, Financial Secretary Joseph Waight emerged to speak to the concerns raised by both social partners. News Five’s Aaron Humes has a recap of the frank discussion on all sides and what it may mean for your pocket.
Aaron Humes, Reporting
The stark reality coming out of the budget consultations held on Thursday and Friday at the Belize Biltmore Plaza Hotel is that profligate spending and feasting by the Government of Belize in the past decade or so is almost directly responsible for the current time of famine. According to Financial Secretary Joseph Waight, in addition to its own belt-tightening, the Government finds the need to pass on that pain to the people it serves in the form of increased taxes.
Joseph Waight, Financial Secretary [File: January 10th, 2017]
“No, we can’t rule out – there’s very likely to be a tax increase. What the components are, we don’t know just yet; this is the process we are going through, but at this point in time it is inevitable that there will be increases in some taxes. We are trying to see what items can least impact the economy but at the same time generate the resources needed. There are some rigidities in the expenditure profile – wages, transfers, interest payments, pensions – those things are very hard to compress, leaving what may be more compressible may be goods and services; and you go back to the usual things – fuel, utility usage, and also procurement; more efficient procurement of goods and services for the Government of Belize. But there’s a small menu of things you can really look at to squeeze down expenditure because there is so much rigidity in the system.”
The government faces a correction of three percent of GDP with a projected outlook of negative zero point six percent in growth. With that in mind, the current administration turned to its social partners for ideas – and there are plenty of them.
“The business community, essentially give valuable input, story being that they were concerned that whatever measures the government takes is equitable, easy to implement and would not retard or depress growth. They said that the government should try to improve its administration, its efficiency first before moving to taxes or increases taxes in that case. The unions are saying the same thing that there’s room for government to tighten its belt. Of course they are also concerned about what they perceived to be inefficiencies and maybe inequities in the system. We get ideas from them but at the end of the day what we plan to do is put everything together and see how it matches and then take that back to Cabinet and report that to our principals.”
The trade unions’ principle in this matter is of doing the least harm and the most good to the national economy. For them, that is a combination of self-subsistence and a changed outlook.
Jacqueline Willoughby, Interim President, National Trade Union Congress of Belize [File: January 10th, 2017]
“Generally, what we did was actually call on Government to say, if we are going to have austerity measures, let everybody be on board. So that we have to look at how we diversify agriculture; how we put in policies for procurement; how we do better tax enforcement – rather than just introduce new tax laws, how do we enforce what we have; how we bring the informal sector over into the formal sector; how do we increase our export – stop bringing in things that we already have here; encourage our people to have subsistence farming that kind of thing. While I agree with you that we have to increase income; we have to increase the revenue; I’m not sure that I would totally agree with you that we must raise tax. But of course, I’m sure that it is a discussion that is on the table, albeit the response that we received today, is that it is something that is being looked at, but it is not something that has actually been decided; and in the meantime we have the Tax Reform Committee going on, so when and if Government decides that this is the route, we will know.”
Eldred Neal, President, Public Service Union
“Whilst we understand that there is going to be an increase on tax, I think we have to and we might not be able to stop it, but we definitely intend to work along the line to ensure that the folks that are exempted and the amount of tax releases and breaks that are out there, we can now better become policemen in the system and if we become a bit more vigilant in the way we do our work, we will be able to ensure that there is no more lack in collecting where we can, because at the end of the day it comes down to public officers.”
Neal also spoke about having everyone chip in to address instances of government and public sector waste, from Ministers to relatives of public officers. Meanwhile, the business community believes, according to Senator Mark Lizarraga, that Government cannot afford to not become more efficient.
Mark Lizarraga, Senator, Business Community
“The Government, I think, or the people that we spoke to, certainly have indicated to us that they have said to the Government Ministries and Departments, that there needs to be a cut, and they are talking about a cut of around five percent; some people that that is a bit too little, but let’s see. As we said, we have not been presented with the final budget, of course, as yet; they are still in consultations, and we hope that wisdom will prevail and that at the end of the day, the Government will focus more on becoming more efficient – not only in collecting taxes from where the taxes are being leaked, but also in the way they spend our tax dollars; because if the intention is to put more burden on those sectors that are already burdened, it just makes us less competitive as a country.”
Aaron Humes reporting for News Five.
According to Waight, the consultations are hopefully the start of an ongoing process in engaging with the social partners, but as regards the Budget this will likely be the only round of consultations available. The Cabinet will receive a report on the consultations at its next meeting and that will guide the final shaping of the Bill, which will be read in mid-March.