Prime Minister Phillip J Pierre has presented the 2024-25 Estimates of Revenue and Expenditure to Parliament on Tuesday night, ahead of the policy presentation scheduled for April 23.
Pierre told legislators that his administration had delivered “successfully on the promises made” to the St. Lucian population in the last fiscal package and it is now “confidently” seeking to deliver even more in the Estimates of Revenue and Expenditure for 2024-25.
“Mr. Speaker, we are steadfast in our commitment to meeting the hopes and aspirations of the people of St. Lucia. Fiscal responsibility, truth, and respect for the people of St. Lucia will continue to guide what we have promised in our 2021 manifesto.”
Pierre, who is also the Minister of Finance, said that the theme for the 2024-2025 Estimates has been titled the “Year of Infrastructure” and that the aim and objective are to transform the economy of the island through infrastructural development: physical, social, and digital.
“Mr. Speaker, there will be something for everyone in this budget. As we improve our infrastructure, citizens can look forward to better roads, safer school plants, housing opportunities, and increased support for the poor and vulnerable members of our society,” Pierre said.
The government says that for the next fiscal year, it’s Recurrent Expenditure is pegged at EC$1.50 billion (One EC dollar=US$0.37 cents) with Capital Expenditure of EC$298.9 million, interest payments of EC$$232.5 million and principal payments of EC$92.9 million for a total amount of EC$1.89 billion.
The government is projecting tax revenue of EC$1.330 billion and non-tax revenue of EC$146.80 million with capital revenue pegged at EC$2.8 million and grants EC$108 million for a total of EC$1.576 billion.
“We project an overall deficit of EC$214.9 million after deductions of principal payments and refunds. We forecast a 5.8 percent nominal increase in gross domestic product (GDP) for 2024-2025, EC$7.3 billion from EC$6.9 billion over 2023-2024,” Pierre said.
He told legislators that as the fiscal position of our country improves, “we expect that the administrative/procedural bottlenecks and difficulties in accessing government services will be removed. “This fiscal year government will continue on the path of fiscal consolidation and economic growth,” he said, noting “However, enhancing the quality of life of the people and creating opportunities for wealth creation will remain the main objective of government policy”.
The government says that for the Recurrent Expenditure for the 2024-2025 financial year, it is proposing to spend EC$1.5 billion in recurrent expenditure, representing 4.2 percent or EC$60 million over the amount approved in 2023-2024.
“This level of increase in recurrent expenditure over the last year indicates the government’s commitment to improving the quality of life of the people. The government’s efforts coupled with a rise in investor confidence and growth in the private sector provide encouraging signs that real economic growth in 2024-2025 is expected, barring some natural disaster or negative global economic event.”
Prime Minister Pierre said that Recurrent Expenditure represents 79.3 percent of total expenditure compared to 77.7 percent approved in the 2023-2024 fiscal year, adding “This increase in expenditure is reflected in all categories due to increased government services, and higher rental payments”.
He said that wages and salaries represent the lion’s share of recurrent expenditure amounting to EC$577 million, comprising EC$460 million in salaries and E
“This amount is approximately 1.2 percent over the amount approved in 2023-2024 and 5.8 percent over the outturn for this fiscal year of which EC$38.5 million are salaries for staff working on the various capital projects.”
Pierre said regarding debt service for the new fiscal year, EC$325.4 million has been allocated, a decline of EC$5.8 million or 1.7 percent on the approved amount for 2023-2024.
“This decline is due to a reduction in principal repayments from EC$112.3 million approved in 2023-2024 to EC$92.9 for 2024-2025. Interest Payments on the other hand are expected to remain high due to the increasing trend in variable interest rates. For the fiscal year 2024-2025, total interest payments allocated are EC$232.5 million representing an increase of 6.2 percent over the approved amount for the previous fiscal year.”
Pierre told legislators that during the budget policy statement on April 23, he will outline “something for everyone, in particular vulnerable and marginal groups in our society.
“As in the previous two budgets, we will continue to provide the much-needed support to the not-for-profit organizations supporting various humanitarian causes such as the homes for the elderly, persons with disabilities, and other similar groups.
“We will also continue to provide for our state-owned entities and regional and international organizations of which we are a part so that the mandates of those organizations can be fulfilled. Among those organizations are the OECS, CARICOM, and the University of the West Indies (UWI). “
Pierre said that as it relates to the UWI, he wanted to reaffirm his government’s commitment to meeting its obligations to this educational institution, “having trained me and so many of our sons and daughters who in many cases have gone on to make St Lucia and the wider Caribbean region proud.
“We can do no less if only out of gratitude and respect for this high-quality educational institution,” Pierre added.
He said regarding the collection of revenue this fiscal year, “I am pleased to report that revenue collection is now back at pre-COVID levels,” adding “We believe that revenue collection can be improved with a reduction in the administrative and procedural bottlenecks that currently exist.
“For the upcoming year, we are forecasting a collection of total revenue and grants of EC$1.576 billion, an increase of 1.2 percent or EC$18.1 million over the approved amount in 2023-2024 and 8.4 percent over the amount collected for the end of this fiscal year,” he added.
He said the government is projecting that recurrent revenue inflows to increase by EC$61.9 million relative to the approved estimates for 2023-2024, reaching a total of EC$1.48 billion for the fiscal year 2024-2025.
“When compared to the revised estimates or outturn for the preceding year, recurrent revenue would have increased by EC$99.6 million or 7.2 percent. The increase is expected in part to be due to expansion in construction activities in both the public and private sectors and the multiplier effect of continued growth in tourism.”
Pierre said that taxes are projected at EC$325.2 million, EC$7.9 million above the revised estimates for 2023-2024.
“We expect this category to continue to perform well as economic activity expands,” he said, adding that the controversial Health and Security Levy is projected to record an increase of EC$17.3 million above the 2023-2024 outturn to reach EC$35.4 million for the new fiscal year which is 10 percent of Health and Security expenses.
Source-CMC
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