BELMOPAN, Wed. July 1, 2015–Overspending to the tune of almost $70 million, exclusively from the proceeds of Petrocaribe funds, was hotly debated when the Senate met in Belmopan today, Wednesday, and while the overspending was approved by a 7-5 majority vote supported by ruling United Democratic Party senators and the senator for the churches, the Opposition senators as well as the senators for the private sector and the trade unions registered their firm positions against the spending.
As we reported some months ago, when Prime Minister and Minister of Finance Dean Barrow presented his 2015 budget speech – right after the ruling United Democratic Party swept all but one town in the Municipal Elections – Barrow had given notice that he would return at mid-year with a set of supplementary appropriation bills.
Barrow said that the proposed 2015-2016 budget, which called for $1.068 billion in spending, “…cannot long survive the tectonic shift caused by last week’s results,” and added that “…the political muscularity of the voters must be matched by the spending muscularity of the Government.”
On Friday, June 26, Barrow was back in Parliament with the promised supplementary budgets, but there was no debate on the bills, because the Opposition walked out in protest of a decision by the Speaker, Michael Peyrefitte, to put Senator Patrick Andrews out the House meeting for laughing too loudly while UDP Collet area representative Patrick Faber gave account of spending of Petrocaribe funds for a recent family day. Today, however, the Opposition made a strong showing in the Senate debate.
“It is not their money; it is the people’s money!” Opposition Senator Anthony Sylvestre said, charging that the Government is “eating out” a billion dollars, for which the budget was approved in March and on top of that has come back to Parliament, asking for support for the overspending. He charged that the Government is spending taxpayers’ money in a reckless way without any regard for the fact that these are monies that have to be repaid under the Petrocaribe program.
Each time the Petrocaribe supplementary appropriation bills were debated, PUP Senator Lisa Shoman asserted that she would ask for a division so that individual votes could be recorded and so that every senator would be put on the spot and asked to provide an answer that for all time will stand, “to see who saddled the people of Belize with all this debt, in the face of the already perilous fiscal situation that we are in…”
“The business community today would like to affirm that we don’t have to agree on anything to be kind to one another. The truth is not always the same as the majority decision. We re-emphasize that principles for common good do not depend on the majority. Wrong is wrong even if everybody is wrong…” said Senator Mark Lizarraga, representing the business community.
After the supplementary bills for $15.9 million and $52.6 million were approved for the last and current fiscal year, respectively, the Senate also approved, by majority vote, amendments to the much debated Petrocaribe Loans Act, which stipulates how proceeds from the program should be spent.
Lizarraga was adamant, though, that the Petrocaribe program could be accommodated under existing laws, and added that the “law and amendments should be repealed,” because they set a dangerous precedent of absolving an administration of wrongdoing and illegality.
The original act, passed in March, said that, “No limitations shall apply to the use of the money borrowed from APBEL and it may be used to finance capital projects as well as to provide social and community assistance to the poor and the socially marginalised, and any other legitimate purpose as the Government may consider fit.”
Under much pressure from the social partners and the wider public, Prime Minister Barrow promised to introduce amendments to the act – which he did on Friday, to address concerns over wanton spending.
Therefore that provision has been repealed and amended to say that, “The money borrowed from APBEL may be used to finance capital projects, provide social and community assistance to the poor, socially marginalized and other sectors of the community, pay compensation relating to Government’s nationalization of Belize Electricity Limited (BEL) and Belize Telemedia Ltd. (BTL), assist with commercial and Superbond debt buyback, and for any other similar legitimate purposes…”
We note that of the nearly $70 million covered by the two supplementary appropriation bills, which detail spending in excess of the billion dollars approved for the national budget, approximately 90% has been allocated for infrastructure and/or Works projects, primarily the National Road Rehabilitation Project, as well as the concreting of streets, highway refurbishment, bridge construction and other such projects. An allocation of $1.5 million is listed for the Mullins River Bridge, which was destroyed by Tropical Storm Arthur back in 2008.
Spending on the Mother’s Day program, for which nearly $1 million was allocated, has been more controversial than the spending on the Works projects. The unbudgeted spending approved today also covers the residential mortgage relief program executed by the Ministry of Finance, and a program to upgrade computer labs at high schools executed by the Ministry of Education along with the summer sports camps and the back-to-school program. There is also $1.5 million under the Ministry of Works allocated under the broad heading of poverty alleviation, and $125,000 for a multi-denominational chapel on the grounds of the Karl Heusner Memorial Hospital in Belize City.
In most of the instances, the overspending far exceeds the 10% cap enshrined in law, as noted by Senator Lizarraga. Lizarraga said that under the financial laws, unbudgeted spending is permitted, up to 10% of the figure approved by Parliament, and it must be for an urgent and unforeseen need which cannot, without serious injury to the public interest, be postponed.
“The multi-million-dollar question,” he said, “is, why has there been $120 million in supplementary spending since March of this year? What were all these urgent and unforeseen circumstances that would have led to this spending?”
United Democratic Party senator Gerardo Marconi Sosa, who said that there will never be an end to the supplementary appropriations, claimed that for the period 2005-2008, when the Opposition PUP was in power, the PUP could have laid their supplementary appropriation bills before the National Assembly but did not. He said that “…we [the UDP] have cleansed all that expenditure that was never laid before the National Assembly.”
However, our recollection is that the PUP, while in office, did present several supplementary appropriation bills to Parliament. For example, for the year 2001/2002, the then PUP administration presented a bill for $93.2 million in overspending; for the year 2002/2003, it presented a bill for $95.9 million in overspending; and for 2003/2004, the bill for overspending was $112 million.
In 2007, the PUP played catch-up by presenting a cache of supplementary appropriation bills spanning 2004-2007 totaling just under $300 million in overspending. This included $153 million overspent for 2004/2005 and $83 million for 2005/2006. Most of this overspending preceded the implementation of the Petrocaribe program, which came on stream, on a much smaller scale than the current version, back in 2005.
In March 2007, then PUP senator Eamon Courtenay had candidly said, “Nobody is proud of that,” but added that “…if we were to go back in history, when the other side [the UDP] sat and stood on this side, they never once brought a supplementary for approval of this Honorable House. But we have brought them here….”
Sitting in for Senator Ray Davis, who represents the unions and civil society but who is currently not in Belize, Senator Adelaida Guerra, who did not speak when the first bill was presented, made her presentation during the debate of the supplementary appropriation bill for 2015/2016, the current financial year.
Guerra said that this present government was elected on the principles of good governance and accountability, and added that they, the teachers and public servants, who stood up in 2005 for the Finance and Audit (Reform) Act, are holding the Government accountable.
She said that the Government is now, after the fact, asking the Senate to approve the overspending, and when they look at the source, they see it’s Petrocaribe.
She said that the unions are not in favor of the bills, adding that no itemization had been provided to detail exactly how the extra funds were spent.
She also said that they had not been consulted, so that they could provide an input into what the monies would be used for.
“It is consultation after the fact, just to say that we have consulted,” Guerra commented.
Senator Fr. Noel Leslie, who represents the church community in the Senate and who was the only senator to vote in favor of the bills apart from those representing the ruling party, said that it is good to know that there is now a supplementary appropriation bill coming ahead of time, although he did say that the spending was not totally detailed. Leslie acknowledged that “an effort has been made,” and he believes that it is important for people to focus on that.
However, he did add, “We want to see value for money in the future. We want to see accountability and transparency down the road.”
Senator Joy Grant of the UDP noted that before the Petrocaribe program was reactivated by the Barrow administration in 2012, the PUP administration collected $40 million and never went to the National Assembly to have that approved and it never reported back on how the money was spent.
Leader of Government Business in the Senate, Godwin Hulse, took issue with what he said were “wrong and inaccurate” claims made in the Senate against the public officers who prepared the financial records, suggesting that the figures are cooked.
Unless the Auditor General says the figures are wrong, and calls in the public officers and the Financial Secretary to answer for those figures, such aspersions should not be cast against them, Hulse noted. He also undertook to look carefully at the figures over which concerns were raised and to consult with the Financial Secretary to get them clarified, because, Hulse said, the Government has nothing to hide.
The Petrocaribe Loans Act passed in March only covers the period after September 2012, when the UDP re-started the program, expanding the importation of fuel from Venezuela from limited levels catering to private investors in southern Belize to fuel for consumers nationwide. It was the expansion of this Petrocaribe regime which allowed the Government to access far more in financing from Venezuela under the program.
PUP Senator Patrick Andrews said: “This [Petrocaribe Loans Act] is a travesty and must be repealed…”
Sosa retorted that, “Those calling for repeal appear to have had no idea that they should have proposed a bill to become the mechanism for control of the revenues derived from Petrocaribe.”
The Senate approved five bills: the two supplementary appropriation bills, the amendments to the Petrocaribe Loans Act, the Cruise Ship Passenger Tax and Validation bill, as well as a bill for the Caribbean Community Climate Change Center based in Belize.