EDITORIAL: The good, bad and ugly of the economic stimulus

After months of delays, in late May the government finally unveiled a comprehensive economic stimulus package designed to help the territory through the coronavirus pandemic.

We are glad that leaders moved forward with the badly needed initiative, though at this stage we are unable to praise their plan unreservedly.

We have concerns with some aspects of the $62.9 million package — especially parts that don’t seem to fit into the “stimulus” mould — and we need more information about all of it.

But there is certainly good news. The package, which is mostly funded by Social Security Board grants, includes measures that we believe are badly needed, including short-term unemployment benefits; support for businesses; programmes to put hoteliers and taxi operators to work; and farming and fishing assistance; among others.

Though we would have liked to see more loans and fewer grants on offer — and drawn from more diverse sources to help ease the burden on the SSB — such measures should help the territory through this difficult time if they are properly administered. More on that later.

We are less enthusiastic about other aspects of the government’s package, some of which seem rather out of place in a “stimulus” plan.

The SSB grant, for instance, includes $7.5 million for the National Health Insurance programme. This decision appears to be less about economic stimulus than about using SSB money to delay badly needed reforms to the cash-strapped NHI.

Other items in the stimulus package are projects that should have been completed long ago but stalled largely because the government has failed to obtain needed recovery funding after the 2017 hurricanes.

Nine million of the SSB grants, for example, will go to repair houses and apartments damaged in 2017, and $17 million will fund a reboot of an affordable-housing programme launched in early 2017 by the previous government.

These two projects are needed, but transparency has been lacking with both, and we question whether the money should have come from the SSB or from the same recovery funding that should be building the territory’s schools, libraries, police stations and other public infrastructure.

The worst part of the stimulus package, in our opinion, is the plan to allocate $300,000 to each elected representative, apparently to spend at will. These funds seem to have been added on to the existing Assistance Grants Programme, which has not been adequately reformed since it was exposed by the Internal Audit Department in 2009 as little more than a slush fund for politicians.

Be that as it may, the key to the overall success of the entire stimulus package is transparency and accountability. Properly implementing such a diverse set of programmes at short notice will not be easy, and success will depend on equitable and even-handed administration that gives all residents a fair chance to benefit without the usual political favouritism that often plagues public projects in the territory.

Very soon, then, the government should publicly disclose a lot more information about each prong of the stimulus package.

What, for example, are the specific eligibility requirements for each type of benefit and who exactly will decide who meets them? What are the application processes and what safeguards are in place to ensure fairness? What is the cap on each benefit? What measures are in place to guard against politicisation? And so on.

Also essential is a sound method for publicly accounting for how each dollar is spent. Even if individual recipients cannot be named, government should be able to provide statistics that will help the public keep track, including the number of aid recipients in each district and the amount provided to each; a full list of all businesses that receive grants and the amount provided to each; and other information.

Without full transparency — as well as additional safeguards designed to ensure that the money goes where it is most needed — the programme risks wasting tens of millions of dollars. And any wastage would be inexcusable.

The SSB, after all, is a collective nest egg funded by all workers in the Virgin Islands, and it should be tapped only for programmes that benefit the entire territory.