The two-month-old Anguilla United Movement Government returned to the Rodney McArthur Rey Auditorium on Tuesday evening for its second well-attended public consultation, this time on the 2010 budget proposals – three days before formal presentation in the House of Assembly on Friday.

Chief Minister delivering address

Chief Minister and Minister of Finance, the Hon. Hubert Hughes, began the meeting with an address in which he gave an overview of the island’s financial situation, leaving the intricate details to three of the Government’s top financial technocrats: Director of Inland Revenue, Gecheal Richardson, and Permanent Secretaries Dr. Aidan Harrigan and Kathleen Rogers.

Mr. Hughes spoke about the completed Anguilla revenue and taxation study which the former United Front Government asked the British Government to finance; and a just-presented expenditure study which was also conducted at the request of his Government. The studies were done by Alan Roe and Mark Watson respectively of Oxford Policy Management in the United Kingdom.

L - R: Hon. Haydn Hughes, Hon. Walcott Richardson, Hon. Evan Gumbs, Hon. Edison Baird and CM Hubert Hughes

“The solutions they have proposed could be more harmful as they would lead to a drastic negative effect on the members of the public service and social society in general,” he reported. “In order to reduce the Government of Anguilla’s overspending in the budget, they have suggested that the civil service bill should be drastically cut by a series of measures which no A.U.M. Government would want to take, especially at this time,” the Chief Minister stated.

“The suggestions include reducing the number of Government departments, reducing the number of civil servants, introducing part-time work for civil servants and other measures. In many instances it is very difficult to avoid or cut spending even when such spending seems too high. The bill is over 30.5 million dollars in this year’s budget.” He said that the Government and many of its technical officers had met recently to consider the revenue and tax-raising measures which were recommended by the tax consultant but, although he opposed some of the tax increases, he had to allow a number of them with the support of his ministerial team. He did not feel at liberty to say what the taxes were and therefore reserved this information until Friday’s budget presentation by him.

Mrs. Kathleen Rogers

The Chief Minister disclosed that in order to meet some of the financial requirements and revenue shortfalls, the Government had approached the Caribbean Development Bank for a loan. In addition, the British Government, noting the island’s difficult financial situation, had given the Government three years to reduce the debt it was facing. He noted that the previous administration had owed lending institutions almost 200 million dollars. “This degree of debt almost makes it impossible to balance the island’s budgets over the next three years,” he stated, charging that this was the reason for the failure of the United Front Government to produce a 2010 budget.

Mr. Hughes said that if his Government were to cut expenditure it would lead to social disorder. This would include sending civil servants home, bringing back students studying at universities, cutting the size of the police force, as well as closing down departments at the Airport, Radio Anguilla and the Health Services.

Ms. Gecheal Richardson

Gecheal Richardson presented the details of the revenue and taxation study, referred to above, which the previous Government had commissioned to raise taxes and other measures to facilitate its need to increase borrowing. It was reported that there were 153 sources of revenue with seven of them alone accounting for 74 percent of total revenue. It was found that although Anguilla was a highly-taxed island, the current taxation was not generating a large amount of income. There was therefore a need to develop a “good tax system” with the relevant criteria in place, normally used to govern its implementation and the various categories of contributors. One of the highly recommended taxes was a value added tax, or sales tax, followed by property tax and excise tax on selected items.

A section of the audience

“The recommendations that were made in terms of what we can do in the short term were that we need to look at the performance of the existing taxes and see where we can raise their scope to enable them to become a good tax system,” she said. “Initial suggestions were to look at our customs duties, alien landholding licences, stamp duty and the work permits structure.”

Dr. Harrigan spoke on expenditure matters and the study done by Mark Q. Watson, the other consultant from Oxford Policy Management. He referred to the coming loan from the Caribbean Development Bank as one of the provisions which would assist the Anguilla Government in meeting some of its expenditure obligations. He said the some 17 million dollars which the Government would utilize from the loan to pay local vendors for services would be “an appreciable injection into the economy.”

Sections of the audience in attendance

Dr. Harrigan reported on a number of expenditure measures undertaken by the previous Government as well some of those which the new Government was being faced with and how they tied in with budgetary matters and the running of the island.

Mrs. Kathleen Rogers, in her role as Permanent Secretary Finance, reported on recurrent estimates of revenue and expenditure and capital expenditure over the past few years and made comparisons between the 2009 and 2010 budgets.

Valencia Prentice-Connor, Clara Richardson and Shona Connor of Inland Revenue Department

In her summary of the 2010 budget, Mrs. Rogers said that Recurrent Revenue was targeted at 172.7 million dollars plus a grant from the European Development Fund of 23.5 million, bringing the total projected revenue to 196.7 million dollars. Recurrent Expenditure has been estimated at 212.5 million and Capital Expenditure at 10 million, totaling 222.6 million. She explained that this left a deficit of 26. 3 million dollars, and pointed out that for the first time a deficit budget would be presented in the House of Assembly this Friday, April 23.

Following the presentations there was a question and answer session which further enlightened the public on the island’s financial and economic position.

| Printer-friendly page | Send this article to a friend |

World News