In discussing the budget, the Briceno administration’s economic czar (zar) Senator Chris Coye spoke about the need for people to understand the bad state left in the wake of the UDP’s departure. However, he added the only to go from here is up.
Senator Chris Coye: “We,all of us, red, blue, yellow, green, and every other color in between, political opinion or creed we all have to get up, stand up and work if we want to achieve the vision of Belize. To rescue and build this country with the constitutionally stated principles, beliefs and ideals, not only for ourselves but more so for our children, for the love of our country, we all have to give more of ourselves to our country than we have ever given before. This is not a time to take for oneself, the modus operandi of the past. This is a time to give of oneself, the modus vivendi of the future. This budget represents the formal fiscal representation of that effort, that work that giving of ourselves for the benefit of our country and our children’s future. Yes, the past UDP administration has made it much harder on all of us. With the heavy debt load, the government is fiscally constrained from pursuing a counter cyclical expansionary policy in this time of economic depression. That is, government cannot undertake massive government expenditures to fill the gaping hole left by the economic contraction in the private sector. The last government left no contingency fund and with an already unsustainable debt load racked up by the past government, as they squandered borrowed monies the government is also left with very little fiscal space to borrow in this time of crisis. Moreover, non targeted borrowing and spending could also put the currency peg at risk. Furthermore, with a severe revenue shortfall on the continuing level of expenditures, government is forced to borrow almost $1 million per day just to pay ordinary bills, including salaries, a practice that puts the government on a path to default, increasing consumer prices and inflation and once again, putting the currency peg at risk.”
The Leader of Government business also outlined some of the worrying remedies to the ailing economy that the International Monetary Fund (IMF) outlined. He says that since the Government was able to stave off some of those proposals, the PUP’s Plan Belize is the answer to the nation’s challenges.
Senator Eamon Courtenay: “There is no doubt that what we have before us is an austerity budget. Madam president a fair question to be asked by the Belizean people to be asked by Senators is why was Prime Minister Briceno forced to present an austerity budget? The answer is as clear as day. We on this side, Madam President, had three choices; continue the reckless, unconstitutional illegal and unlawful spending, as was done by the United Democratic Party and we rejected that. Go to the IMF and enter into a program, and I think it is important, Madam President, that I read from the concluding statement that was issued by the fund on the 12th of March 2021 so that the Belizean people know very clearly what the fund recommend and why this side rejected it. I quote, Madam President, “Fiscal adjustment should rely on both expenditure and revenue measures. With regard to expenditures, the authorities are appropriately focusing on reducing the wage bill, and purchases of goods and services were both of which account for a larger share of GDP in Belize than in peer countries. Prioritizing infrastructure projects could also create savings. Over time, the authorities should also set a natural disasters reserve fund to fund a response to natural disasters and increased targeted social spending.” This is important, the fund says “on revenues the authorities should focus on reducing a number of zero related items of the general sales tax and taxing them at the standard GST rate instead, raising the standard GST rate to a level in line with peer country’s. GST revenue could also be expanded by taxing the hotel sector at the standard GST rate instead of the 9% Hotel Tourist Accommodation tax levied on room revenue administered by the Belize Tourism Board. Other options to mobilize resources include lowering the threshold for exemption in personal income tax, increasing excise tax, and enhancing and Revenue and Customs administration. A less ambitious fiscal consolidation effort will require larger efforts in other areas while failure to restore debt sustainability would put the fiscal position and the currency peg at risk of disorderly adjustment.” Madam President, members of the Senate, 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% that they’re 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.”