Everybody
wants better health care, better roads, better salaries, better education, better
jobs etc . . . and of course a better Christmas this year; but the irony is not everybody
is willing to pay for the costs or make a contribution to facilitate the
delivery of the recurrent and capital services to bring those about. Part of the
explanation may be related to fiscal literacy.
The
previous Gov’t did little to facilitate the fiscal literacy process, especially
when they went to bed with Mr Chou and openly violated the Finance Administration
Act – a law which requires all revenues payable to the state to be deposited
into the Consolidated Fund. Today, St. Lucia has to contend with that unfortunate
historical blemish of illegality, casting us into the mould of the Duvaliers of
Haiti, Idi Amin of Uganda and many corrupt hemispheric and world despots.
Where
does Gov’t derive the money for its recurrent and capital projects? Generally, Gov’t
has three broad fiscal revenue streams: Taxes, loans and grants. Taxes form the lion
share of revenue. Loans are another source of revenue but are repaid with
taxes; so we can consider them to be two different sides of the same fiscal coin!
Grants
are rapidly drying out. In 2006, PRC gave St. Lucia a huge grant of 100 million
for its capital programme; when we switched to the ROC, we lost it but in its
stead we received considerable but hitherto unaccountable and unquantifiable
amounts in grants for numerous small projects.
We also received grants under the European Union Economic partnership Agreements (among other) for various programmes such as
social recovery and environmental projects.
Some
of us subscribe to the misconception that when we pay tax, that we only enrich
the pockets of government ministers. I would say that this possible but largely
improbable, except in cases where ungracious and corrupt ministers indirectly
receive cuts from projects or request consultancy fees for wooing investors –
allegations which were levelled against a couple of ministers in the last
government. But if the integrity commission does it work diligently and
efficiently, any such malpractice should be eliminated, minimized or at the
very least documented for potential action.
A
clean government that does not renege from its fiduciary responsibilities should
have no such problems. And here I want to take a moment out - without fear or favour - to put my hand in
the fire for Dr Anthony. I can go further and state categorically that I don’t
believe that Dr Anthony will tolerate or be comfortable with any fiduciary
breach in that regard from his ministers.
Assuming
that is the case (and for fiscal purposes), then we can make the assumption
that “enriching” government does not translate to enriching individual minister
personally. In fact, Ministers have no right to “touch” or interfere with
Government or state money. Ideally, their job is not even to administer but to provide a
policy framework at the agency level and collectively at the level of
government or cabinet under the guidance and direction of the Minister for Finance
for policy implementation.
Suffice
it to say that our ministers at this point in time may be underpaid; their
salary is small and perhaps does not commensurate their job responsibilities - and I'm assuming that they work very hard!. In
fact, Permanent Secretaries currently earn higher salaries than ministers they serve.
Having
said so, I must hasten to add that now is an awkward time for the Salaries
Review Commission/Cabinet or any other authority to remotely consider
recommending/implementing salary increases for Ministers. I understand, before
the current fiscal precipice, a proposal in that regard was made to the former
PM but was not implemented largely because of Taiwanese largesse where it was
alleged that individual ministers were direct and indirect beneficiaries. It is
a matter to be pursued and if corroborated, ought to be addressed with the
framework of the law.
I can
only assume that those alleged malfeasances might well be correlated to the
non-implementation of VAT, which should have gained priority over all else. And
perhaps as a corollary, we may also want to assume that some of the economic problems
plaguing us now might have been history if the former PM King had implemented
VAT.
I
am of the view that he might have made a fundamental mistake in that regard and
hence, we should hold him accountable for the fiscal state of affairs in this
country which lost millions of dollars in revenue because of his non-action which
took us on the verge of an extremely dangerous fiscal precipice.
But
apparently he still has not introspected and learned from his mistakes - for he
still naively holds tenaciously to the untenable position that St. Lucia is not
ready for VAT, advising the current government and parliament to delay it even further.
In other words, I get the impression that King is ill-advising that we postpone or
delay development/progress of this country indefinitely until we self-destruct.
But
kudos to St. Lucians who apparently know infinitesimally better than the Leader of Opposition.
The masses understand the economic rationale and nuances involved - and even more
so than the un-nuanced Emperor!
Hence,
true to the spirit of Walcott and Lewis which God has blessed us with, we have risen
to the challenge and despite the potential short-term dislocations, we have understood
the greater good of VAT and its context, despite the barrage of republican-type
backward thinking the UWP and its sympathetic media friends blissfully embraced.
Many
St. Lucians perceived the implementation of VAT as tantamount to an act of
patriotism. Our country has called upon us to contribute a little more to
normalize the potentially catastrophic situation and to avoid the plunge into
the deep fiscal precipice – and many, if not most of us – have thoroughly
understood and embraced the call!
Our
implementation of VAT was synchronized with America’s worst economic times
since the Great Depression; and indeed there is a measure of parallelism
between the economic phenomenon which faces the USA and the economic condition
facing us. Americans face a cliff and we face a precipice; and some Americans –
like some St. Lucians - have equated taxation with patriotism and have recognized that
in this difficult moment that country comes before self – a lesson that the
last regime never got!
In
conclusion, I call upon our leaders to act fiscally responsible. Our country has
called on us to make difficult sacrifices; let us match that sacrifice with
extreme responsibility. If we can manage this difficult transition with
sensitivity and sensibility, then we would have laid a strong foundation for
our future.
Now,
it’s up to you to deliver!
Glad
tidings!
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