FAR FROM facing the prospects of a collapse, Government’s revenues are improving and the strategy for economic recovery in these tough times remains on track, says Minister of Finance Chris Sinckler.
He gave this assurance in the House of Assembly yesterday, responding to claims last month largely by Opposition Leader Owen Arthur that the economy remained in deep trouble with Government facing significant revenue losses and “a full-blown fiscal crisis”.
Latest economic data shows that “we are bringing our expenditure under control and our revenues, far from collapsing, are in fact increasing”, Sinckler said when the House debated a resolution to push to $1.75 billion the amount Government can raise by the issue of treasury bills, tax reserve certificates and tax refund certificates.
Sinckler said that information from the Accountant General for April 1 to June 30, indicated that Government had registered some successes in its efforts to reduce spending and increase revenues.
Current revenue for the period was listed as $584.7 million, an increase of $43.9 million, compared to collections in the second quarter in 2010.
Taxes on incomes and profits increased by $3.8 million over the 2010 figure to reach $206.5 million. Taxes on property were up $1.9 million to $6.5 million and taxes on goods and services totalled $300.8 million, a 16.4 per cent hike on last year’s second quarter posting.
Sinckler told MPs that value added tax (VAT) receipts amounted to $228.3 million between April and June, representing an increase of $37.8 million over the corresponding period in 2010.
He also reported an increase in the take from excise duties, but acknowledged that “special receipts” decreased by $9.7 million to $2.7 million, due mainly to the removal, from?December 1, 2010, of the Environmental Levy on imports.
Sinckler also spoke of a significant drop in Government spending during the quarter. Current expenditure, exclusive of amortization of $70 million, decreased by $32.7 million, from the 2010 figure of $647.4 million, he said.
Capital expenditure for the period was pegged at $19 million, compared to $21.8 in the 2010 second quarter. Total expenditure for April to June, 2011 was $717.4 million, compared to $966.7 million in 2010.
Sinckler said Government was registering some success in getting the gap between its spending and revenue – the fiscal deficit – to go “in the direction we wanted it to go”.
“The deficit of $62.69 million represents 0.7 per cent of GDP (gross domestic product) at market prices of $8 564.0 million compared to an amount of negative 1.7 per cent for the same quarter of last fiscal year, when GDP at market prices was reported at $8 208.2 million,” he said.
Sinckler said the figures showed “that our strategy for this particular recession is in fact working, (and the economy) continues to show a level of recovery that we are not satisfied with but in the circumstances we can be justifiably comfortable that progress is being made”. (TY)