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Monday, December 3, 2012


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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