BELMOPAN, Fri. Mar. 9, 2018– Prime Minister Dean O. Barrow presented his government’s budget to Parliament this morning, in the House of Representatives, following Wednesday’s municipal elections, which saw the governing United Democratic Party lose ground to the Opposition People’s United Party.
Describing what he called the “UDP decade,” PM Barrow said the budget was structured so as to continue the Government’s “pro-poor policies.”
The PM also announced that at the close of 2017, “the national debt stood at approximately $3.535 billion, some 93.8 percent of estimated 2017 GDP.”
PM Barrow said that the goal of government is “to reduce the debt to 80 percent of GDP in the next five years.” “If Belize can sustain and build our fiscal primary surplus position and if we can, in collaboration with private enterprise, spark just a few years of higher than average economic expansion, then this key criterion of sovereign economic and fiscal health can be fully restored,” he said.
The projected budget surplus of 3.1 percent of GDP that the government had expected to achieve during the last fiscal year did not fully materialize. Instead, the PM said, “the outturn is likely to be closer to 1.8 percent of GDP…The lower than expected out-turn is due to revenue shortfalls arising from weaker than expected economic activity and some slowdown in government investment and some slowdown.”
Barrow subsequently announced that in order to increase its revenue base, government has added the GST tax to the purchase of mobile data.
PM Barrow explained that there has been a transition “where revenues have shifted dramatically from voice to data, and with this shift has come a reduction in GST collections, and making tax application even more difficult is the bundling of services, effectively obfuscating taxable elements from those untaxed. This proposed alteration will simply restore GST revenues lost in this voice to data transition.”
The PM also said that government would trim its huge wage bill, over $400 million a year, “by capitalizing on natural staff attrition.”
The Central Bank has projected that the Belizean economy will grow by 1.5 to 2.0 percent during 2018. The PM has attributed this growth mainly to the continuation of its capital infrastructure projects — “…the continuation of the Hummingbird Highway ($11.0 million); continuation of the Belize City Southside Poverty Alleviation Project ($4.0 million); commencement of work on the upgrading of new sections of the George Price Highway including the construction of a new double lane bridge at Roaring Creek ($13.0 million); commencement of work on an upgrading of a new section of the Philip Goldson Highway ($5.0 million); commencement of work of a new Airport Link Road joining the access road to the PGIA with the Western Highway ($3.0 million); commencement of work on New Haulover Bridge ($3.0 million); and commencement of work on Phase I of the CARACOL Road Project ($4.0 million).”
PM Barrow said, “…the defining economic outlook of the UDP decade does not envision government as either the problem or the panacea; rather, we view government as the activist enabler.”
Following the House meeting, PM Barrow told reporters, “The adjustments overall are extremely mild. I think this is a ‘steady as she goes’ budget. With respect to the GST now on data services, it is, as I explained, we all know that there has been a shift away from voice or the regular voice calls to data, and as a consequence, the GST collections have fallen steeply. We have to replace that loss and this is the logical way to do it.”
Barrow was asked how much revenue the new GST on data would bring, and he explained that the government hopes to raise some 6 million dollars.