2006 Budget Tops $233 Million

By Mellica McPherson

 Government expects to collect a record $233,155,000 in revenue during the upcoming fiscal year, Minister of Finance, Hon. Ronnie Skelton said as he delivered the 2006 Budget Address during the 13 December sitting of the Legislative Council. The theme of the 2006 Budget Address was “Advancing our Social Services.”

Hon. Skelton  gave an overview of global and regional trends, reflecting on the past and looking towards the future, as well as outlining the fiscal domestic performance for 2005, and the 2006 plans for each Government Department, Ministry and Statutory Board.

“This ($233,155,000) represents an increase of 7.4 percent above 2005 projected revenue.  This optimistic projection in revenue is due largely  to the excellent performance of the Financial Services sector, because this revenue was derived from sources all over the world, it signifies that our global marketing strategy is paying dividends,” Hon. Skelton pointed out.

$203,790,000 have been earmarked to cover recurrent expenditure.  More specifically, Mr. Skelton noted that the figures in next year’s recurrent budget include the cost to establish a Department of Culture, and a Department to be known as the BVI Shipping Registry.

Of $29,364,000 that remains, the Government proposes to spend $24,235,000 for the Development Fund for the execution of Capital Projects. The remaining four million dollars will be distributed among the Pension Fund, Emergency/Disaster Fund, Contingencies Fund, Repair and Renewal Fund, and the Reserve Fund.

Debate on the merits and principles of the Bill entitled “Appropriations (2006) Act, 2005” has been deferred until a later date. The annual estimates for the year of 2006 were referred to the members of Standing Finance Committee who are to meet in the near future to examine the various expenditures and ask detailed information.

“The financial position of Government is strong”, Hon. Skelton said as he made known the current stance of the Territory’s public debt, which now stands at $102,327,894 (or 12 percent of the Gross Domestic Product  -- GDP).

On a high note, the Finance Minister announced that the state of the BVI’s economy has never been stronger. The GDP is expected to increase from an estimated $898,138,000 in 2005 to a projection of just under $ One Billion in the next four years.

The Budget is expected to be distributed among Ministries, Departments, and Statutory Boards as follows: Ministry of Communications and Works, $38,287,400, Chief Minister’s Office, $37,966,100, Ministry of Education and Culture, $36,689,400, Governors Group, $31,838,300, Ministry of Health and Social Services, $30,817,900, Ministry of Finance, $18,752,800, Ministry of Natural Resources and Labour, $14,133,500, Pensions and Gratuities, Public Debt, Miscellaneous, and Funds, combined, will receive, $24,669,600.

Minister Skelton used the forum to share with the public some of Government’s big plans for 2006, when work will begin on the new hospital, the new high school building, and the various road construction projects on every island of the Territory. Other major projects include the new retirement centre, the continued series of road shows throughout the world — mostly Asia — to promote the Financial Services industry, new marketing campaign for the Tourism Sector, the improvements to the seaports and airports, and the establishment of the Department of Culture.

Mr. Skelton said that the projected revenue for the year 2005 is expected to be exceeded in similar fashion to the 2004 projection, thus setting a trend for a fantastic 2006.  “Among its initiatives for 2006, the FSC has high hopes of finally commencing plans for the establishment of an FSC satellite office in Hong Kong. This office will service the volume of business originating from the region, particularly for Registry of Corporate Affairs.”

Looking at the vital tourism industry, the Finance Minister said projections indicate that the Tourist Board will lay further claims on major markets in Latin America and Canada as it embarks upon the establishment of a public relations service in those countries to boost secondary tourism markets. The Minister noted that the efforts of the Board continued in 2005 and as a result the Board has completed the addition of Spain and Eastern Europe to the portfolio of their European markets.

Government’s Overall forecast for 2006 makes provision for the development of land-ownership policies. With that said the Minister commented that Government had no intention to levy any new taxes in 2006. “The year ahead has much promise for the people of this Territory. This budget is intended to serve as a framework from which to build. Even in the absence of the 2005 final figures, by projection, I feel comfortable in forecasting 2006 as a year of strong growth.”