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#502188 - 03/13/15 06:56 PM Budget Speech 2015 – Statement and Economic Review
Marty Offline

Prime Minister Hon. Dean Barrow is currently giving his 2015 Budget Speech at the Meeting of the House of Representatives. You can read his speech here.

#502203 - 03/14/15 11:15 AM Re: Budget Speech 2015 – Statement and Economic Review [Re: Marty]
Marty Offline

Economic Growth Expected in 2015

With that look at the projected deficit and surplus for 2014-2015, the Prime Minister turned to the outlook for the rest of the year, and expressed optimism and an expectation of economic growth.

Prime Minister Dean Barrow

“The Central Bank of Belize conservatively expects G.D.P. growth to decelerate to between two percent and two point five percent. They feel that the tail winds that drove the 2014 expansion will moderate. As an aside, their native caution has been confounded before. Indeed, just last year they had forecast under three percent. But we did over a full percentage point better than they estimated. In any case, production of the export crops (sugarcane, banana and citrus) should continue to increase, though by a smaller magnitude than in 2014. Hydro-electricity generation has been trending downward recently due to drier weather, and petroleum extraction has been on its inevitable finite decline. On the other hand, underpinned by improvement in the economies of Belize’s major source markets, arrivals of stay-over tourists are projected to grow by approximately five percent, and this should lift activity across the associated service sub-sectors. A further boost should come from growth in government services as road infrastructural works aggressively continue and outlays on BIL’s district sporting facilities begin to ramp up. Inflation is expected to remain subdued at between one percent and one point five percent, as the lower cost of fuel in world markets should continue to suppress the prices of a wide cross-section of goods and services in the CPI basket.”

2015-2016 Budget Reveals “Muscular Spending”

Just before midday, Prime Minister Dean Barrow made his 2015-2016 Budget presentation which he promised would be the shortest ever, but which still ran for forty-nine minutes. He prefaced the substance of the address by proclaiming that the muscularity of the voters in municipal elections would, as promised, be rewarded by the muscularity of government spending.

Prime Minister Dean Barrow

“We cannot disappoint those that did not disappoint us. They came ‘all in’ on our great transformation enterprise after we promised that the tide would be fully at the flood. Now we must not let them down as they did not let us down. And the rural areas, though not in play last Wednesday, also need to inherit their share of the kingdom, come as equal participants into this time of plenty. The upshot is, Mr. Speaker, that I serve notice right now that I expect to come back to this House with a mid-year Supplementary. For what I present today cannot long survive the tectonic shift caused by last week’s results. And so I declare now that the political muscularity of the voters must be matched by the spending muscularity of the Government. And the appointment with a historic destiny that these elections presaged will, I swear, be fully kept by this United Democratic Party.”

Budget Will Remain Focused On Development

For fiscal year 2014/2015, there is a projected overall deficit of one hundred and forty-one million dollars, a two point five percent increase from its initial estimate. That, says Prime Minister Barrow, is the direct result of government’s focus on people-centred, country-centred spending.

Prime Minister Dean Barrow

“The U.D.P. political directorate is unrelenting in its mission. And that mission, we are happy to tell the world, is to infrastructurally overhaul our country; increase social assistance and protect the poor; create jobs; and improve the quality of life for every single Belizean man, woman and child. We must spend in order to do this. We must lighten the heavy load of fiscal consolidation in order to do this. We must take full advantage of the opportunity to borrow at one percent interest, below even the rate of inflation, in order to do this. We must sidestep the oppressive orthodoxy of “statistics, damn statistics” and focus clearly on the flesh and blood uplift of our people, in order to do this. Thus it is that in the climate of a sound economy where G.D.P. growth is three point six percent and unemployment fell by ten percent, the U.D.P. will bypass metrics rooted in dogma and continue with the policies that have produced the unprecedented progress of the last two years. But back to the figures. Total revenue and grants are projected to be nine hundred and fifty-nine million dollars, or some three million dollars above budget. This is notwithstanding the decreases in revenues from declining local petroleum production, and the sharp tax fall attendant upon the precipitous drop in the price of imported fuels in the latter months of the fiscal year. Thankfully, revenues from the Shipping and the International Business Companies Registries, which were the key drivers of the heightened revenue performance in the previous fiscal year, were stable this year and in line with the budget estimates. On the expenditure side, total expenditure for fiscal year 2014/15 is projected at one point one billion dollars, which is eighty-nine million dollars above budget. Current expenditure increased by twenty million dollars, attributed mainly to the hike in Personal Emoluments following the 2014 Salary Rises for public officers and teachers. Here again, it is a cost well worth absorbing. Development Expenditure also increased by almost sixty-nine million dollars above the budgeted figures.”

PM Barrow Breaks down Petrocaribe

Seventy-two million dollars of the one hundred and forty-one million dollar deficit was financed through draw-downs from Petrocaribe monies. According to the Prime Minister, for the eighth consecutive year there has been no commercial borrowing. He points out that as a consequence of G.O.B.’s debt strategy, coupled with their fiscal strategy, the core numbers are absolutely sustainable. A gem in government’s debt strategy has been the inflow of Petrocaribe monies, and it is one which the PM says he intends to use for as long as it lasts.

Prime Minister Dean Barrow

“Under the terms of the Agreement, which provides for long term financing of a greater or smaller proportion of the cost of these imports depending on the world market prices, the Government of Belize has borrowed from APBEL a total of US one hundred and forty-three million dollars during this same period. The main terms and conditions under which these funds were borrowed included a Rate of Interest of one percent per annum and a Repayment Term of twenty-five years inclusive of a two-year Grace Period. During this grace period the interest itself is capitalized. Because this Grace Period is still in effect, the G.O.B. has not so far had to make any debt payments (neither principal nor interest on these loans). But, commencing this year, interest and repayment will begin to fall due. To provide for such payments, there is an allocation of four million dollars in the budget. Of the two hundred and eighty-six million borrowed under the Agreement, the G.O.B. has drawn down some one hundred and twenty-six million to finance various capital programs over two fiscal years, leaving a current balance of one hundred and sixty million dollars in a special account in the Central Bank. These fluctuating balances have been used to bolster our official foreign reserves to a historically high level of nine hundred and seventy-four million at end 2014. The one hundred and twenty-six million dollars drawn down has been used to finance the following projects and programs over the two fiscal years: Equity in the National Bank of Belize, thirty million dollars; Upgrading and Rehabilitation of Streets in the District Towns, twenty-five point four million dollars; Upgrading and Rehabilitation of Streets in Belize City, fifteen million; New Infrastructure (Lake I Boulevard and Landfill and Chetumal Street Bridge) in Belize City, eleven million; Social Support and Community Assistance, thirteen million; Purchase of Property and Equipment, seven point one million; Sporting Facilities, five million; Maintenance of Main Roads and Highways, four point seven million and Counterpart Expenditure to other Capital Projects, fourteen point eight million.”

Infrastructural Bonanza Will Continue, Says PM

The Prime Minister says that the priorities of the 2015/2016 budget will be in line with those of previous years, and while they have done so much, Belizeans can expect even more progress ahead. In addition to health, education and national security, G.O.B. plans to continue its infrastructural surge started in 2014.

Prime Minister Dean Barrow

“The proposed Budget targets a preliminary Primary Balance of Zero Percent of G.D.P. and an Overall Deficit of two point five percent of G.D.P. Total Expenditure is budgeted at one point one billion dollars while Total Revenue and Grants are estimated at nine hundred and eighty million dollars. When taken together, this results in the projected Overall Deficit of eighty-eight million which is the equivalent of two point five percent of G.D.P. To this figure we must add a further eighty-six million dollars for Loan Amortization requirements, and so arrive at the Total Financing Needs of one hundred and seventy-four million dollars. These financing needs will be met from the following sources: disbursement of forty million dollar from loans already contracted with our multi-lateral development partners to fund our Capital III Expenditure Program; disbursement of twenty million dollars in budget support financing from the Republic of China (Taiwan) under the on-going bilateral economic cooperation program; and access to some forty-one million dollars in domestic financing; and a further draw-down of PetroCaribe financing in the amounts of seventy-three million dollars. Mr. Speaker, I freely concede that the proposed Primary and Overall Balances are not optimum in terms of IFI manuals. And we do not slight their advice concerning the need to increase savings in current operations to meet debt servicing commitments, fund local capital programs, and serve as buffers against possible domestic or external economic shocks. But this is, in a good way, a special period. And core fiscal targets, particularly because of the special borrowing opportunities, must for the moment give way to the development imperatives of our country.”

There is much more of interest in the budget, and we’ll take a closer look in Monday’s newscast. The budget will be debated on March twenty-sixth and twenty-seventh.

Channel 5

#502300 - 03/17/15 11:19 AM Re: Budget Speech 2015 – Statement and Economic Review [Re: Marty]
Marty Offline

PM Barrow Says No New Taxes in Five Years

Even in the face of increased spending in every sector, the PM boasts that the government has done it all, and continues to do it, without any increase in taxes. In fact, he says, they haven’t raised taxes once in the past five years.

Prime Minister Dean Barrow

“We are once more presenting a budget in which there are absolutely no new tax measures. This is one aspect of our success, Mr. Speaker – that perhaps does not receive sufficient notice or praise…the fact that we have for five years in succession asked not one penny more of the Belizean people in additional taxes. Rather we have given back year after year after year to every segment of our society. There are the annual increments on top of the salary increases to the teachers and public officers. There are the continually expanding allocations to BOOST and Food pantry. There are the millions and millions of dollars in mortgage write-offs through S.S.B. and DFC and the Ministry of Housing. There are the payments for six CXCs and the annual high-school subsidies. There are the free tablets for all tertiary level students and the free wifi in the park coming to every municipality. There is the forty millions dollars for home construction and consumer loans through the National Bank. There is Christmas Cheer and Mother’s Day and Back to School. And we pay for all this without seeking a red cent more in taxes from the Belizean people. You know Mr. Speaker, years from now when history looks back on these halcyon days, it will be said of this administration that truly it was a government for all.”

The debate on the budget will take place on March twenty-sixth and twenty-seventh.

$195 Million Worth of Road Works for 2015

As he has alluded to with some regularity, the Prime Minister has ramped up the allocation to capital two and three projects this year to one hundred and ninety-five million – to finance ongoing projects and new projects coming on stream. Those works, he says, will span the length and breadth of the country.

Prime Minister Dean Barrow

“The continuing priority and the bulk of our capital program will be allocated towards the upgrade of highways, roads, streets and drains across the country. In Toledo, works are due to commence shortly on the last remaining segment of the Southern Highway which will lead right up to the Belize/Guatemala border. In the west we begin soon the actual construction of the new Macal River crossing now that its designs and revised costings have been completed. In the north we expect to complete imminently the new facilities at the Santa Elena border including provisions for proper parking for both commercial and private vehicles, traffic flows and drainage. Feeder road rehabilitation will continue including in Stann Creek under the EU program. In Belize City work on both the Northside Flood Mitigation Project and the Southside Poverty Alleviation Phase Three will step up. Turning to new projects, several will start this year. See why I can’t call the elections? Can’t call elections because we have to implement…numbered among them are the rehabilitation of the Hummingbird Highway, in respect of which we introduced the motion, the rehabilitation of the George Price Highway from Belmopan to Benque Viejo Town, and the rehabilitation of the Phillip Goldson Highway from Belize City to Sandhill.”

PM Barrow Explains Recurrent Expenditure in 2015 Budget

Prime Minister Dean Barrow presented the 2015-2016 Budget on Friday, and it will be debated in the next two weeks. While he hasn’t officially dubbed it a budget of plenty, it’s clear from the goodies thrown in that it’s far from an austerity budget, all due to Petrocaribe money. Where there’s an apparent downside like increased recurrent expenditure, the PM says that’s easily explained by additional attention paid to critical areas like health, education and national security.

Prime Minister Dean Barrow

“The draft estimates of recurrent expenditure is proposing a total of eight hundred and seventy-four million, up by thirty-two million over the projected outturn of eight forty two million for fiscal year 2014-2015. Of this proposed amount, some three hundred and sixty-eight million is for personal emoluments, sixty million for pensions, two hundred and eleven million for goods and services, one hundred and forty-four million for subsidies and current transfers and ninety-one million for interest payments on debt. The increase in current expenditure is attributed to the following – in education, increased transfers to schools under the education sector reform program. In health, more provisions for medical supplies, the expansion of national health services to the Corozal District, and for the new twenty-four hour service of the San Pedro Polyclinic. In National Security – to fund the additional intakes for both the Coast Guard and the Police force, and also for increased allowances for the Police, overdue increased allowances for the Police to right a historical injustice, and to put them on par with the rest of the Public Service in terms of allowances.”

Channel 5

#502326 - 03/17/15 05:50 PM Re: Budget Speech 2015 – Statement and Economic Review [Re: Marty]
Marty Offline

Dangriga and PG voters “win” in 2015-2016 budget

Prime Minister and Minister of Finance Dean Barrow presented his 8th budget to Parliament a little after 11:00 this morning in a budget presentation that was intentionally the shortest of his administration, delegating much of the economic data and information to annexes presented with the published version of his budget speech.

In a proposal that called for no new taxes, Barrow connected the national budget proposal with his administration’s “transformation” agenda – a central theme upon which his party, the ruling United Democratic Party, campaigned in the run-up to the municipal elections held 9 days ago.

At the conclusion of last week’s municipal election vote, the UDP had garnered 62 of 67 seats nationally, leaving the PUP with only 5 in Orange Walk Town.

“That victory, in turn, represents a massive reaffirmation of confidence in the programs, policies and economic and political stewardship of this administration. In that context, it is a joy to bring to the House and the nation a 2015/2016 budget that will ultimately be the implementation vehicle for those now imperishably popular national watchwords: the transformation continues!” Barrow said.

He added that while the UDP fully expected to win those elections last week, they could hardly have imagined, let alone properly planned for, the scale of the victory.

Barrow said that, “…there are clear financial implications for what happened last Wednesday. To take the two obvious examples, the citizens of Dangriga and Punta Gorda [municipalities which were previously held by the Opposition People’s United Party but which voted in full slates of UDP members] have a right to expect immediate relief from the punishing effects of the maladministration inflicted upon them by the outgoing PUP Town Councils. Among other things, it will take Central Government money to assist in their return to progress,” Barrow said.

Barrow vowed that, “…we cannot disappoint those that did not disappoint us. They came ‘all in’ on our great transformation enterprise after we promised that the tide would be fully at the flood. Now we must not let them down, as they did not let us down. And the rural areas, though not in play last Wednesday, also need to inherit their share of the kingdom, come as equal participants into this time of plenty.”

In Parliament, the Minister of Finance also announced his intention to return to the House with a mid-year supplementary appropriation bill, since the proposed 2015-2016 budget “…cannot long survive the tectonic shift caused by last week’s results.”

He said that “…the political muscularity of the voters must be matched by the spending muscularity of the Government.”

The proposed budget for 2015-2016 calls for $1.068 billion in spending, and the Government will require $174 million to take care of the financing gap, which will include $86 million in loan amortization. Most of this gap will be bridged by the PetroCaribe Fund ($73 million), but funds are also to come from Taiwan ($20 million) and previously contracted loans ($40 million), as well as domestic financing ($41 million).

The bulk of the current expenditure was for wages and salaries, the single largest component, at $348 million for FY 2014/2015, and Barrow said that it is expected to increase to 40% in the medium term.

Today, Barrow announced a second installment of salary increases for teachers and public servants. Although a final figure has not yet been agreed, Barrow said that the budget includes a placeholder of $20 million, enough to finance a 4% salary adjustment, on top of last year’s 6%.

“And although it may end up being a little more or a little less depending on the final recurrent figure, we are so very pleased that we are once again coming through with 10 percent over two years for the stewards of our education, our administration, our security,” Barrow said.

In detailing the Government’s performance on the 2014-2015 budget approved last year by Parliament, Barrow noted that they are now projecting a primary budget deficit of $50 million for the outgoing financial year, which reflects $87 million less than the $37 million surplus actually approved.

Barrow admitted that this huge disparity “cannot escape the scrutiny provoked,” but added that “[the] reason [for the disparity] simply is that the UDP political directorate is unrelenting in its mission. And that mission, we are happy to tell the world, is to ‘infrastructurally’ overhaul our country; increase social assistance and protect the poor; create jobs; and improve the quality of life for every single Belizean man, woman and child. We must spend in order to do this.”

Barrow reported that the projected total expenditure for the outgoing year (2014-2015) of $1.1 billion reflects an increase of $16 million to $842 million in current expenditure and an upswing of $69 million to $258 million in capital expenditure—a substantial portion of which was financed by the funds which Venezuela has loaned to Belize under the PetroCaribe Accord.

From the PetroCaribe Fund, Barrow reported that “there was an outlay of $33 million on road rehabilitation countrywide; $11 million for the Lake Independence Boulevard Site Development and Chetumal Street bridge in Belize City; $7 million in sports facilities through GOB’s special purpose implementing agency, Belize Infrastructure Ltd.; and an additional $20 million for equity in that jewel in our crown, the National Bank of Belize.”

Of the BZ$286 million borrowed under the PetroCaribe Agreement, the Government has drawn down some $126 million to finance various capital programs over two fiscal years (FY 2013/2014 and FY 2014/2015), leaving a current balance of $160 million in a special account in the Central Bank. These fluctuating balances have been used to bolster our official foreign reserves to a historically high level of $974 million at the end of 2014, the Minister of Finance reported.

He reported that, “The economic upswing in Belize was also evidenced by a 3.6 percent increase in the average employment level to 134,554 persons in 2014 as compared to a 2.5 percent growth in 2013. Consequently, the average unemployment rate fell to 11.6 percent in 2014 from 12.9 percent in 2013.”

Meanwhile, he reported that the country’s Gross Domestic Product (GDP) grew by 3.6%, as a result of higher production of export crops, record increases in tourist arrivals that boosted the services sector and higher output of electricity.

Barrow’s 2015 budget is scheduled to be debated on Thursday, March 26, and Friday, March 27, 2015.


#502406 - 03/19/15 11:20 AM Re: Budget Speech 2015 – Statement and Economic Review [Re: Marty]
Marty Offline

Business Senator Dissects 2015/2016 Budget

Tonight, as we promised, we take another look at the 2015/2016 budget, scheduled to be debated on the twenty-sixth and twenty-seventh. In the preface to his presentation, Prime Minister Barrow made it clear that he would be coming back to the House to seek more money, since in preparing the estimates they could not possibly have forecast such a massive victory on the March fourth Municipal Elections. So what exactly does that mean? Business Sector Representative, Senator Mark Lizarraga, broke it down for us today.

Mark Lizarraga

Mark Lizarraga, Senator, Business Sector

“When he did his budget he was catering to certain U.D.P. constituencies and he was ignoring others. He didn’t budget money for them because he thought that they probably weren’t going to support him as strongly as they did. Now that he has the full support from virtually across the whole country, he’s saying guess what, I have to take care of those people that took care of me. I have to borrow more money because I have to spend more in those areas that I didn’t anticipate I was going to be spending in. That’s what he’s saying. What the Prime Minister is saying, Mike, is that his budget calling for borrowing so far to balance his budget of one hundred and seventy-four million dollars – he’s saying that’s not going to be enough. I plan to spend more in these areas that supported me that I did not anticipate their support. So already we have borrowing of two hundred and seven million dollars that we had to make for last year to balance our budget. This year we’re saying that going into the budget as it is, we have to borrow a hundred and seventy-four million dollars to balance our budget, but guess what, I’m coming back to you for more because I have more spending than I planned to do. The thing is that while we budget for a particular number, we’re coming back to see that the revised numbers are much greater. In the case of last year I think it was some eighty million more than we budgeted for. This year we don’t know what it is going to be. So what is the purpose of the budget if you keep changing them? Yes you can have minor adjustments for some extraordinary events but we should have to pass supplementaries every year because the government decides to spend more on social programs.”

Channel 5


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