
Prime Minister Stephenson King Thursday evening laid out his government’s fiscal policy for the 2011/2012 financial year that could see a turn around for the better in a number of areas, if executed.
However, whether govern-ment will be able to execute its projects and realize its expenditures for the year is another matter entirely, history having shown that this government has been unable to bring to fruition projects spoken of in previous budgets.
With a planned budget-ary expenditure of one billion, three hundred and thirty-seven million, eight hundred and seven thousand, three hundred dollars ($1,337,807.300), a 10 percent increase over last year’s, Prime Minister King is optimistic that Saint Lucia will grow its economy by about 4.5 percent this fiscal year.
He plans to control public expenditure by putting a freeze on the number of persons employed in the public service; continue working in the area of operational and efficiency review the objective being to reduce the recurrent cost of operations; re-establishing to appropriate levels student-teacher ratios which have been decreasing due to a reduction in the student population; and continuing to work on an objective and transparent targeting mechanism for social assistance. He plans to establish a Central Beneficiary Registry for all social safety net programmes.
The Prime Minister spoke of introducing, for this year only, a levy to raise funds to be used in the fight against crime. This levy will be called the National Security Levy.
“The battle is an on-going one which calls for us to be proactive and pre-emptive in preventing the criminals from destroying the spiritual, social and economic fabric of our country. In this regard we must be creative in finding the requisite resources to pay for the fight against crime – resources that must be seen not as expenditure but as an investment aimed at safeguarding the future of our beloved country.
“In this respect, I propose the introduction of a National Security Levy of one percent of the CIF value of selected items imported into Saint Lucia. However, this measure is expected to yield EC$12 million and will be effective for this fiscal year only,” King said.
The Prime Minister plans to raise EC$5 million by imposing a 50 percent tax on cigarettes in keeping with the World Health Organization which recommends that countries should consider increasing taxes on cigarettes in an attempt to reduce consumption and provide resources for the attendant health costs associated with smoking.
“Let me explain. In Saint Lucia, cigarettes currently attract consumption tax at the rate of 100%. I propose to move to a specific excise tax equivalent to 150 percent. Currently, the consumption tax collected on cigarettes amounts to $83.70 per kilogram or $1.67 per 20-stick pack of cigarettes. An excise tax equivalent to a consumption tax of 150% will amount to $125.60 per kilogram or $2.52 per 20-stick pack of cigarettes. This means that the retail price of a 20-stick pack of cigarettes will now increase from $8 to $12 and from $10 to $15 depending on the brand.
This measure is also expected to deal with the increasing incidence of smuggling of cigarettes out of Saint Lucia, where the price is lower than other regional neighbours. The current 100% consumption tax in Saint Lucia makes our price about half of what it is for the same product in Barbados and Jamaica”, King said.
An additional $1.02 million is being sough through radio and television broadcast license fees, the regulations for which government plans to pass shortly.
According to the Prime Minister although the Telecommunications Act No. 27 of 2000 was enacted 11 years ago, the Regulations pertaining to fees for broadcasting, although in draft, had not been passed. As a result, the current 27 FM radio broadcasters and 7 broadcast and subscriber TV operators, which are registered to do business in Saint Lucia, have been operating free of charge.
“However, it is our intention to ensure the passage of the Telecommunications (Fees) Regulations which will require radio and TV broadcasters to pay initial and annual licenses to operate on the island. The license application fees will range from $25 to $2000 per license depending on the type of operation and the class of license. In addition, there will be an initial license fee which ranges from $100 to $2000 per license. The Government hopes to raise approximately EC$1.02 million,” King said.
The Prime Minister intends to approach the National Insurance Corporation to request more monies for the Ministry of Health.
“The National Insurance Corporation (NIC) continues to partner with Government in the development of the country. This mutually beneficial relationship finds expression in many forms, not least in the area of health care. The NIC has, since the year 2000, paid a flat annual contribution of $3 million to the Ministry of Health to offset the cost of health care services provided by public health care institutions on behalf of contributors.
“Given the increasing cost of health care and the fact that the number of NIC contributors receiving services at healthcare institutions have increased significantly from 5,588 in 2000/2001 to 10,688 in 2009/2010, I intend to approach the NIC for an increase in its annual contribution from $3 million to $5 million in this fiscal year,” the Prime Minister said.
The 2011/2012 budget will be financed as follows:
Recurrent revenue of $895,382,000 which is six percent higher than the Approved Estimates for 2010/2011;
Tax revenue is projected to be $806,230,000 which represents 90 percent of total projected revenue. Capital revenue resulting from the proceeds of the sale of land in the amount of $8,071,562. . $112,038,338 from friendly governments and multi-lateral organizations in the form of grants of which $66.6 million will be provided from the European Union, $10.96 million from the Peoples Republic of China on Taiwan and $10.6 million from the Caribbean Development Bank.; New Bond funding of 205,112,667; and other loans amounting to $117,202,733, from the following institutions: a. $73.8 million from the Caribbean Development Bank (CDB); b. $17.2 million from the World Bank; c. $11.8 million from the International Monetary Fund (IMF) and d. $14.5 million from the Kuwait Fund for Arab Economic Development.
Allocation of Expenditure
Economic Service Sector
Approximately $763.7 million will be allocated to the Economic Service Sector. Of this amount, $302.2 million is for Debt Servicing, Retiring Benefits and Contingencies. The overall allocation to this sector represents a 14 percent increase over the previous year’s allocation. Around 38.6 percent of the total allocation to this sector, in the amount of $295.3 million is for the Capital Investment Programme to be implemented by the Ministries of:
Agriculture, Forestry, Lands and Fisheries; Commerce, Industry and Consumer Affairs; Communications, Works, Transport and Public Utilities; Finance, Economic Affairs & National Development; External Affairs, International Trade and Investment; Tourism and Civil Aviation; Physical Development and the Environment; and Housing, Urban Renewal and Local Government;
The Ministry of Agriculture, Forestry and Fisheries is earmarked to receive an allocation of $36.1 million. Of that sum, $5.3 million is for the implementation of the Youth Agricultural Entrepreneurial Project funded by the CARICOM Development Fund (CDF) and $4.3 million is to undertake post-TOMAS rehabilitation works on farm access roads and drains.
The Ministry of Commerce, Industry and Consumer Affairs will receive $18.5 million. This includes four point three million dollars ($4.3 million) for various investment initiatives including the National Trade Export Promotion Agency (TEPA).
The Ministry of Communications, Works, Transport and Public Utilities is earmarked to receive $138.6 million, 74 percent of which is allocated to capital initiatives. Road infrastructure projects will receive $102.1 million. Of the $453.8 million earmarked for the Ministry of Finance, Economic Affairs and National Development, $319.7 million is earmarked for non-core Ministry of Finance expenditures such as Retiring Benefits, NIC Contributions, Debt Servicing, Refunds and Contingencies. An allocation of $101.8 million in Capital Expenditure is provided for fiscal management programmes, contingencies, implementation of the National Development Plan and post-TOMAS rehabilitation.
The Ministry of Tourism is earmarked to receive $47.8 million Included in this amount is $40 million for Tourism Marketing and Promotion.
Social Service Sector
$394.3 million will be invested in the Social Services Sector. This represents 29 percent of the total expenditure budget. The Ministries of Social Transformation Youth and Sports, Education and Culture and Health, Wellness, Family Affairs, Human Services and Gender Relations will implement the projects and programmes for this sector.
The Ministry of Social Transformation, will receive $40.7 million. Of this amount, $27.7 million is allocated for various projects to benefit communities and vulnerable groups while $4 million of this amount will target projects for the development of sports.
The Ministry of Education will receive EC$198.6 million, of which $27.7 million will, in the main, finance the rehabilitation of school plant and purchase of equipment. This allocation represents a fifteen percent increase over the allocation for 2010/2011. $155.9 million will be allocated to the Ministry of Health. Of that amount, $64.4 million is earmarked for capital expenditure. This includes allocations for the New National Hospital.
Justice Sector
The Ministries of Justice and Attorney General’s Chambers and Home Affairs and National Security, have been allocated a total of $127.2 million. This represents ten percent of the total expenditure budget. The allocation includes provisions for increasing the police force by 30 more Constables; re-establishing the Special Reserve Unit and increasing essential supplies and equipment.
General Services
The Office of the Prime Minister, the Ministries of Public Service and Human Resource Development and Labour, Information and Broadcasting are earmarked to receive a total allocation of $42.8 million. This is equivalent to a 3.2 percent decrease in expenditure when compared to the allocation for 2010-2011. The Organs of Parliament, that is, the Office of the Governor General, Legislature, Service Commissions, Electoral and Audit Departments, will receive a total of $8.9 million.

Buoyed by favourable comments from members of the public and the government for a job well done since launching the initiative ‘Operation Restore Confidence’ the Royal Saint Lucia Police Force has vowed to keep the pressure on, not only to stand up against criminals but generally to reduce on the lawlessness coming from all quarters.
Acting Police Commissioner Vernon Francois last Friday reiterated, at the Commissioner’s Parade up at the La Toc Police Training School, the department’s position to members of the different departments of the Police Force.
He congratulated them for the work they have been doing which has generated the complimentary reviews coming from the public and the government, pointing out that all praise goes to them, first and foremost, especially those who put their lives on the line in confronting the lawlessness and venturing out in perilous times, example during Hurricane Tomas, to serve the citizens of the country.
“Saint Lucia does not belong to the criminals, it belongs to the law abiding Saint Lucians. We will spare no effort in making this place a law abiding place for Saint Lucians,” a confident Francois said addressing gazette officers as well as lower ranked members.
But in inspiring his officers to stick to the task at hand and not be daunted he cautioned them as well, making them understand that while they need to be firm and decisive in the performance of their duties they must also be able to justify their actions.
“It is through your efforts that the complimentary reviews are coming,” Francois said.
The Commissioner took the opportunity to thank the rank and file of the police force for the work they have performed since the start of ‘Operation Restore Confidence’. It must be noted that at the start of the year Saint Lucia had been gripped in the throes of gun violence, reports of which were broadcasted every other day, forcing the country to face either a murder or another act or acts of serious crimes.
Francois while noting that that aspect of crime seems to be under control stated that controlling crime is not solely a law enforcement effort.
“We can do all we can but if the rest of Saint Lucia does not get involved in the fight, if social programmes are not in place, if crime prevention programmes are not in place, if other programmes are not in place we definitely will not be successful at what we do,” Francois said.
The Commissioner’s Parade is a quarterly activity held not necessarily to bring police officers together but also to help members to sharpen on their drills, provides an opportunity for younger officers to mingle with senior and higher ranked officers where they can glean something of value that will enable them to perform their duties better and also to reward those who are deserving of awards.
This much was done at Friday’s parade.
Constables who have given 15 and more years of service were awarded blank shoulder epaulettes to distinguish them as senior constables. Also awarded were officers who have given 25 years and more of service. Certificates of Commendation were given to members who had done significant work during and after the passage of Hurricane Tomas. Certificates of Commendation were also awarded to those who had performed outstandingly during ‘Operation Restore Confidence’ and in other police work that has produced significant results.