Rough Road Ahead: Gov't Plans Belt-Tightening

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Premier and Finance Minister, Hon. Dr Orlando Smith during his address to the Territory, December 6, 2016

(PLTM) - Premier and Minister of Finance, Hon. Dr. D. Orlando Smith has set the tone for next year's budget, using a Territorial radio and television address to announce plans to cut spending in the face of challenging economic times which has seen reduced revenues for Government.

However, Premier Smith who spoke about plans for belt-tightening, in the same breath said that fundamentally, the territory's finances are sound.

In an address to the Territory last evening, December 6, 2016, under the theme 'A Message Of Confidence And Hope', Premier Smith spoke mostly to the challenges facing the financial services industry, and links to the global recession which occurred since back in 2008.

"On the wider matter of the challenges to the economy, the roots of this year’s issues stretch back to 2008 when the financial crisis set off the worst global recession since the Great Depression."

In the past several months, the Opposition has been pointing out that Government funds are running thin, a charge the Government has denied and at one stage, announcing that the economy was robust. However, signs of economic trouble for the BVI came to the forefront when Government secured a $25 million line of credit from CIBC First Caribbean Bank this year.

Premier Smith said that while his government made a promise to the people about borrowing prudently and spending tax payers' money wisely, he implied that it is difficult to accomplish the latter when the main economic pillar is facing tough times.

"The promise we made was to deliver growth that is Shared and Sustainable – and that can only happen if we are using our public dollars carefully, borrowing prudently and living within our means," he said.

According to the Premier, it is always much easier to make good on that pledge when the economy is growing quickly and the financial services industry is pouring money into the public coffers.

"It gets harder in a year like this one when the industry is challenged," Dr. Smith pointed out.

Dr. Smith stated that his government will focus on making the government operate as efficiently as possible.

He assured that the belt-tightening and efforts to rake in extra revenues will not be done to bring undue burden on the small man.

"We will ensure that every dollar we spend is directed toward areas that will deliver the greatest future returns. And we will look for other ways to increase Government revenues without placing undue burdens on the people of the Territory. But rest assured, whatever belt-tightening we must do it will not come at the expense of the common man or woman," he said.

"We will not be cutting core services or reducing our investment in your children’s schools, in your healthcare, in your roads or infrastructure, or in helping grow your businesses and your economy."

Interestingly, the government announced several tax and fee hikes earlier this year which was seen as a direct impact on the ordinary man, and residents and the opposition heavily criticized the move. Government is hoping to rake in millions from various fees to boost revenue.

Premier Smith also boasted that his government is not about spending for the day.

"When the people of the BVI put their trust in this government, we made a commitment to you that we would put the resources of our Territory to work on behalf of all the people. We promised to plan for the future, and not just spend for the day. And nowhere is that more visible than in the work we are doing to make our tourism industry as strong as possible," he stated.

He said the BVI can now rely on the tourism sector.

"While our financial services industry will always be subject to the decisions made in faraway capitals, our waters, our natural beauty, our welcoming spirit – those are ours and ours alone."

Dr Smith mentioned several areas including monies to be made from the cruise pier development, plans for direct flights, and other areas in tourism, which he said will help with the economy.

However, he said, "in order to fulfill and sustain all the programmes and plans that I have described for you tonight, it is essential that our public finances be in sound shape. We will not allow our investments today to come at the expense of future generations of BVIslanders."

Trying Times

Meanwhile, the Territory's leader said that the BVI will not stand still, rather together the people will act with boldness and purpose.

"We will be able to do so because fundamentally our finances are sound. Our investments are strategic. Our Government is focused. But above all, we will do all this because we are a family."

He said: "We must exercise care in our spending: But we are not alone is this – virtually every nation on Earth is facing some version of fiscal challenge"

"So I ask you all to join me in offering your prayers and your work for the further development of our beloved country in these trying times," he urged.

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