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Budget passed; salaries slashed

HeadlineBudget passed; salaries slashed

BELIZE CITY, Thurs. Apr. 29, 2021– On Wednesday, the General Revenue Appropriation Bill for the fiscal year 2021/2022 was finally debated in the Senate. During the debate, the austerity budget put forward by the government came under expected fire from Opposition senators, who called for a division of the votes at the end of the day’s debate. This budget included the 10% salary cuts and increment freeze being fought relentlessly by the unions despite its virtual finalization after Wednesday’s Senate meeting. Thus, as was anticipated, Senator Elena Smith voted against the passing of the budget along with the UDP senators.

At the end of the day, 8 senators approved the passing of the budget, while 4 voted no, and 1 senator, Hon. Osmany Salas, who represents the NGO community, chose to abstain from voting. Lead Government Senator, Hon. Eamon Courtenay started the debate.

 ”Our mission and the budget which we debate today is the beginning of a new path for a better and stronger Belize and so, Madam President, the question is, what is today about? Well, today is about the truth, a day of reckoning, a day of taking account of the perilous state in which we find the nation’s finances.” Senator Eamon Courtenay said.

He acknowledged that the budget that would be passed for this fiscal year is no doubt an austerity budget, but he pointed out that the Briceño administration had three choices, one of which included going “hat in hand” to the International Monetary Fund (IMF) and likely facing recommendations for retrenchment and possible devaluation.

“Madam President, the prescription proposed by the IMF is to reduce the number of zero-rated GST items and to tax them at the rate of GST — increase the GST. They don’t say it here, but it is 19% they are advocating. They go further to say, reduce the exemptions from business tax and, in fact, tax the hotel sector and to go ahead and look for other areas where we can impose more taxes. Let’s not misunderstand their coded language. Reduce the wage bill. That is not only a cut, but they are also advocating a cut in the number of persons employed in the public sector, and they have warned that unless something is done, there will be a disorderly adjustment to the peg. That means devaluation. The Honorable Prime Minister rejected the IMF road, and we have chosen, Madam President, to adopt a carefully calibrated and designed plan that is homegrown, and we believe that will get us to a better Belize,” Senator Courtenay stated during his presentation.

While the leader of Government business in the Senate is confident that the budget tabled this fiscal year will chart a path forward for economic comeback, the Lead Opposition Senator, Hon. Michael Peyrefitte, is not so convinced by the government’s plan, or lack thereof, as he put it.

He commented, “You see these people out there who are making noise? You see the unions?

Most of them out there and most of the people voted for you, you know, they voted for PUP. And they voted for you because at the very least they thought that you would give them some hope. You said you could fix it, you said; you said you could come in and do this and do that and fix it. You don’t have to cut this and you don’t have to cut that; just grow the economy, he said. A special task force was also set up, Madam President, with about 15 of the top business people in Belize who were supposed to sit down and come up with ideas — isn’t that so? Have they produced nothing, no idea as to what you should do, no idea as to how to grow the economy? The level of analysis that you have reached is just increasing the price of fuel and cutting pay? That’s it? That’s the plan?”

Another perspective was provided by the senator representing the business community, Hon. Kevin Herrera, who stated during his presentation that while the daunting economic position of the country could be approached from an economic standpoint, the problem at hand is a human one.

“In truth what we are really facing is a human problem. Any economist will be able to tell you what to do to correct the challenges we face from a purely technical standpoint, but many of those solutions would have a catastrophic human cost, and in many respects are not viable options because of the need to lessen the impact on the citizens of this country. In this environment, a balanced approach is very important. While we need to correct the imbalances and reposition ourselves for the eventual rebound, we must employ fiscal discipline while being sensitive to the plight of our fellow citizens. So this is not a purely technical undertaking, since each action should take into consideration the potential adverse impact on people,” he stated.

Senator Herrera said that the key to rebound is a revitalized private sector. He remarked that the government has two options: to focus on only cutting costs and collecting revenue, or to push for growth and recovery. He commented that the tourism sector must be given some attention, since the projections on the global market are for a rapid expansion within the coming years, and Belize must position itself to take advantage of the growth. He also recommended that the country focus on growing the local base of persons working in and alongside the tourism sector and advertising two-fold to the international market.

Senator Osmany Salas, who chose to abstain when the time arrived for the divisional vote on the budget, focused in his presentation on the public debt looming over the country, the recovery plan of action, and finally corruption.

“What I didn’t see in the recovery plan, and what I don’t see in the budget is how we stimulate the economy. So my question is, where are the plans to stimulate the economy? Where is the economic stimulus plan that will form an integral part of the recovery plan?” he said.

Senator Christopher Coye, Minister of State in the Minister of Finance and an economic czar for the PUP government, rose to give his contribution to the debate on the Briceño administration’s first budget. He, like the others on his side of the Senate, pointed a finger at the past UDP administration for the dire economic straits the country is facing. While he did not lament their incompetence, he said that they must be held accountable for their actions.

“I am not about to repeat these depressing statistics once again. There is much blame to go around, not least of which has been shameful maladministration by the past UDP government. Then there are those that have feasted at the trough with reckless [abandon]. They have feasted not only on what may be there, but what is yours, what is mine. They have taken from your children and mine, for them; there can be no free pass. There must be no free pass. They must be held accountable. Justice must be done, and must be seen to be done,” Coye said.

In reference to the 10% cuts, which were denounced by the Opposition senators, as well as the Union senator, Hon. Elena Smith, and the NGO senator, the lead Government senator, Eamon Courtenay, argued that such austerity measures are a part of a greater plan for recovery.

“The Government of Belize proposed a cut in goods and services and a cut in salaries for public officers and teachers only because it is absolutely necessary for the generational reset that we need. It is a part of a plan that includes reduction in debt service, includes tax recovery, includes cuts, includes, most importantly job creation, stimulus to the economy.” Senator Courtenay said.

The budget for this fiscal year, 2021/2022, was read a final time and passed in the Senate after a divisional vote.

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