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The 2021 Budget Presentation at a Glance #549410
04/10/21 04:45 AM
04/10/21 04:45 AM
Joined: Oct 1999
Posts: 73,395
oregon, spr
Marty Offline OP

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Marty  Offline OP

After weeks of back and forth between the Prime Minister, his Cabinet and Financial Secretary and the joint unions who have now filed notice of industrial action, the 2021-22 national budget was presented in the House of Representatives this morning. News Five’s Isani Cayetano has the details.

Prime Minister John Briceño

“The sixth most indebted nation, the fifth most severe depression of 2020, our status as one of only thirteen countries on the planet that do not even appear in Transparency International’s Corruption Index, hence leaving us without a ranking, that is the legacy of the U.D.P.  This is the extent of the national decline which my administration begins to reverse with this, our first national budget proposal.”

Isani Cayetano, Reporting

The presentation of the 2021 budget was preceded by a lengthy preamble that once again condemned the previous administration for the difficult financial predicament left in its wake.  It’s nothing that has not been said since the PUP took office on November eleventh of last year.  It is, nonetheless, a stark reminder of the miserable economic situation we are presently faced with.

Prime Minister John Briceño

“The projected outturn for the fiscal year ending thirty-first March, 2021 is dismal, despite our back-breaking efforts since assuming office to halt the flow, the red ink, no pun intended, by limiting spending priority areas and eliminating waste. Total recurrent revenues and grants are projected to fall by twenty-eight percent, exactly twice the level of overall economic contraction for 2020.  I repeat, for emphasis: for every dollar government expected to collect, it actually collected seventy-two cents.”

By contrast, to every seventy-two cents that government collected in revenue, it was spending eighty-six cents in capital expenditure.  In reality, to every dollar G.O.B. received it was spending fourteen cents more than it collected.

Prime Minister John Briceño

“Notably, amidst the cuts and reductions in spending in various sectors, wages to public workers actually rose by eleven million [dollars] or two point five percent.  Overall capital spending exceeded budgeted levels by five percent, rising to two hundred and ninety-four point eight million dollars from a budgeted level of two hundred and eighty-one point seven million.  In summary, overall, for every dollar government expected to spend, it actually spent eighty-six cents.”

As it stands, Belize’s debt is a little over four billion dollars.  Prime Minister Briceño contextualizes that staggering amount by breaking it down to the sum every man, woman and child would have to pay in order to turn things around financially.

Prime Minister John Briceño

“The scale of just how much government owes today is breath-taking: the equivalent of ten thousand dollars for every man, woman and child; fifty thousand dollars in debt for each family of five; the inconceivable total sum of four point two billion, that’s the number four, followed by nine digits.  For the average Belizean citizen, whose annual income under the U.D.P. withered to five thousand, eight hundred dollars, a level not seen since 1992, such unearthly indebtedness is unconscionable.  For the nation state of Belize, this magnitude of public debt, some one hundred and thirty percent of the country’s entire annual economic output, places us, as I indicated earlier, as the sixth most indebted country in the world.”

In order to cover its debt and right the sinking ship that is Belize’s economy, the Briceño administration needs to realize savings.  To do so, it says it is forced to turn to teachers and public officers and their existing wages.

Prime Minister John Briceño

“The salary adjustment is necessary, but it is no fiscal elixir; that alone is far from sufficient to reverse the public finance morass left behind by the last U.D.P. administration.  Painful as it surely is, the sixty million in salary adjustments and the twenty million foregone for increments and allowances in this budget is one step in the hard slog back to fiscal fitness.”

The expected revenue for the new financial year is roughly one billion dollars.

Prime Minister John Briceño

“Upon this principled scaffolding, we proceeded to build the budget for the fiscal year which projects total revenues and grants of one point zero three billion dollars, an increase of fourteen point five percent compared to the projected outturn for fiscal year 2020/21.  Of recurrent tax revenues, two hundred and forty-seven point five million dollars will come from income and profits, six point four million dollars from property, one hundred and thirty-seven point seven million from international trade and transactions and four hundred and eighty-four point seven million from goods and services.”

Channel 5


PM on Wage Cuts

The PM says the matter is cut and dry: there's just no more money to pay them:

Hon. John Briceno, Prime Minister
"We prepared to continue talking to them, but the fact of the matter is and without being in any way disrespectful is that we just don't have the money. There is no money to be able to continue pay the amount of wages that are in front of us and as I pointed out its not only the unions or the employees of the government that are making cuts or just by doing that we are balancing the budget, we're cutting on our projects, we're cutting on all of our expenditures all over the place. All of us have to do our little bit. Everywhere in the Caribbean you are starting to hear more and more countries are talking about that they don't have more monies to continue to pay salaries. We by extension are doing our utmost best to keep everybody working. If we'd had follow the dictates of the IMF we'd have been getting rid of at least 3,000 government employees and also raise GST by 19% and we don't want to go in that direction."

Government says it borrowed 30 million dollars last month to meets its recurrent commitments.

A Gaping Deficit

And, what the story didn't go into was the bottom line, that the overall deficit is projected at 4.93 percent of the GDP or $166.43 million dollars, and when the $109.3 million for Amortization is added to this number, the level of financing required for this year is 8.4 percent of GDP or $275.6 million.

And while that is the overall deficit, the Prime Minister discussed the recurrent deficit as well:

Hon. John Briceno, Prime Minister
"Not even in this new financial year with all the sacrifices we are doing, with all the cuts that we are doing and trying to tighten our belts we are still going to be almost one hundred million short of paying our bills, paying salaries, rent, light bill - everything else to operate the government."

Channel 7


Re: The 2021 Budget Presentation at a Glance [Re: Marty] #549510
04/15/21 04:31 AM
04/15/21 04:31 AM
Joined: Oct 1999
Posts: 73,395
oregon, spr
Marty Offline OP

.
Marty  Offline OP

A breakdown of the 2021-22 Budget Presentation
Carlos Magana - Adjunct Economics Lecturer, Galen University


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