Minister of Finance Chris Sinckler, in an impassioned presentation during the Estimates Debate in Parliament, said changes would have to be made to the way we do things if our deficit is to be brought down and our debt to gross domestic product ratio is to decline.
Control of the deficit is the critical component? of fiscal discipline. It is a cancer that pervades the entire economy. It never seems obvious to our ministers that it is almost impossible to alleviate poverty or improve the economy with a recurring current deficit as far as the eye can see. In fact, it exacerbates poverty.
Over the years we have had reverse tax credits, increases in welfare grants, expansion in small business loans by Fund Access, the Urban and Rural Development Commissions and generous concessions under the Tenantries Freehold Purchase Act for the partial payment of tenantry land – all with very marginal economic impact.
This was borne out by a recent report by the Ministry of Social Care which suggested that the number of people living below the poverty line had increased from 8.7 per cent as at 1998 to 19.3 per cent in 2010.
There are a number of factors that would have aggravated this situation but the solution does not lie in increased Government largesse, which in itself helps to increase the deficit. There was nothing new in the Estimates that could address the problem aggressively.
One of the largest factors in Government expenditure is wages and salaries; much of which is sequestered into statutory corporations and which, together with debt service, accounts for a large part of transfer payments.
It has taken some time but we are heartened that Government has at last sought to bring in outside help to restructure the Transport Board, the National Housing Corporation and the Sanitation Service Authority, which together consume millions of millions of dollars in public funds.
We encourage Minister Sinckler to move with dispatch in this direction. We would even be so bold as to say he need not wait on the Inter-American Development Bank to apply much needed fiscal surgery on departments that could easily be privatized with little dislocation.