Budget day is tentatively set for 2 April and the new Government which took office less than a month ago has announced that there were challenges in the preparation of the budget in such a short time.
The annual budget must be passed by 30 April and with days to keep the deadline newly appointed Premier and Minister for Finance Hon. Andrew Fahie has admitted that the challenges he referred to had to do with things that the United Kingdom Government needed to approve before the budget can be passed.
Hon. Fahie was sworn in on 26 February, his Cabinet on 1 March; and despite having to deal with urgent Territorial matters he said that his new government has been attending to the matter of the budget which was started by the previous administration. He said upon taking office his government had to try to include some new initiatives.
“We are working on some new initiatives that we will bring out in the budget, but I have to tell the people of these Virgin Islands that this budget is a challenge in that it was already in motion and rightfully so. As they had to do something given the timeframe when the budget had to be passed and given when election was,” Hon. Fahie explained.
The Minister for Finance said that his government has been trying its best to do some adjustments to the budget which he said was almost complete. He added that this also required the approval of the United Kingdom in relations to the Midterm Fiscal Plan (MTFP). “I am coming to learn that it is not only us with the budget, there is the Midterm Fiscal Plan that has to be approved by the United Kingdom government,” Hon. Fahie said.
The Premier said that the Midterm Plan went to the UK before, but since taking office he realized that the UK did not agree with the MTFP; and so the plan had to be taken back. Hon. Fahie said that there are a lot of things that he recognized that he did not know were agreed upon and he is learning about them slowly.
Meanwhile, Hon. Fahie noted that government is committed to getting the budget passed by 30 April despite the fact that there are new processes to meet. “Things that never used to happen to us before, or needed to be done you realize they have to be done since taking office as Premier. There are a lot of things that the UK has to agree with before we can get it passed,” he said.
Hon. Fahie in explaining the budget requirement noted that the BVI’s budget is multi-pronged as it is not only based on the annual cycle with the Midterm Fiscal Financial Plan, but is also based on the loan guarantee.”
As it relates to the £300 million in UK loan funding guarantee, the Premier disclosed that all the signing and other required tasks were completed and the only choice he is now left with as the new Minister of Finance is how much he will take. This decision of how much of the loan to take the Premier said is a delicate matter that has to be properly weighed.
In giving a quick look at the economic performance of the BVI, Hon. Fahie mentioned that last year the Territory’s financial services sector performed extremely well, but the extra funds brought in were used by the previous government. “I think there was an extra $50M that was collected but then again when you go to the books — given that all of it was blown in elections projects you still end up having to start from scratch.”
The Minister for Finance suggested that some of the needed recovery projects and required expenditures were not accounted for in the budget. “It’s one thing to see the books saying, but then the reality of the situation is that a lot of things the books haven’t taken into account like potential claims that have to be paid. Those are things that are not being factored in and also when you look at all that government has to deal with those are not being factored in, in numbers. For example, the incinerator needs to be dealt with, the high school needs to be dealt with… The list is humongous and they are not factored in in the figures; so now we have to sit down as a government and see what would be the best way to address all of these; so that we can get the recovery of the country going at a better rate than it was going.”
Nonetheless, the Premier said that as a government his administration is laser focused on seeing how they can get the budget passed. He said after that they are going to get a grip on how they are going to manage the affairs of the country to meet the needs. “How do you manage the expectation of the people given what you met and all that needs to be done,” he asked.
“I am confident with time we are going to get it handled. So it is a challenging first few months but in time we are going to get it handled. To say that you knew that some of what you were going to meet would shock you, but I have met more shocking me than I anticipated,” the Minister of Finance explained.