As government spending on Covid-19 matters surpasses $70 million, the House of Assembly voted last week to amend the national budget in hopes of avoiding deficit spending. Above, crowds gather in front of a Road Town bank just as the sixth case of Covid-19 was recorded in the territory in April 2020. (File photo: JOEY WALDINGER)

While lawmakers were working recently to avoid pandemic-related deficit spending, they saw some “interesting things” in the budget because of spending that was not “mindful,” Premier Andrew Fahie said in the House of Assembly last week.

After lamenting the challenges of managing finances taxed by Covid-19, HOA members passed a budget update on Sept. 22 that included approving nearly $29 million in additional recurrent expenditures and adjusting more than $16 million in capital expenditure and $4.8 million in capital acquisitions.

The resolution passed with amendments after members spent most of the day in closed-door committee.

Mr. Fahie said the resolution — which included few details — was designed to “make sure that we do not put the country through deficit spending given the challenges of the ongoing pandemic, where we have seen that it is very rare to find any country right now not in deficit spending, and we want to continue to make sure we are resolute in our actions to be as prudent as we can without stopping the functioning of our territory.”

The draft resolution approves $28,950,428 in recurrent expenditures in excess of the appropriated amount set out in the Appropriation (2021) Act, 2020.

Under that heading, it lists $840,000 to be transferred to the Environmental Protection and Tourism Improvement Fund; $2,313,103 to be transferred to the Miscellaneous Purposes Fund; $892,047 to be transferred to the Transportation Network Improvement Fund; $5,431,628 to be transferred from the Reserve Fund; and $600,000 to be transferred from the Miscellaneous Purposes Fund for foreign scholarships.

During the discussions last week, Mr. Fahie said his government has built up the Reserve Fund, which he said rose from slightly over $68 million when his administration first took office to $84 million now.

Capital expenditures

The draft resolution also approves $16,146,800 in capital expenditures “in variation of ” the amount set out in the Appropriation (2021) Act. It doesn’t provide many details, but it does state that the expenditure includes $8,556,555 from the Development Fund and $70,000 from the Asset Seizure Forfeiture Fund. The resolution doesn’t make clear if the remaining $7,520,245 would come from a different source or was the result of reshuffling of money that was already allocated.

Additionally, the draft resolution approves capital acquisition expenditure of $4,804,100 to be spent “in variation of ” the appropriated amount, though it does not provide further details.

The resolution adjusts a $402 million 2021 budget passed last December that Mr. Fahie has said was designed to be “very conservative” to account for the pandemic.

Last week, the premier did not describe specific programmes or projects targeted in the budget adjustment but promised to deliver a more detailed speech on the state of the economy soon.

He also expressed hope that a new push for vaccination would help industries like tourism start to rebound.

Though last week’s debate included few details of the changes to bigger spending measures, members did speak in detail about certain education allocations, including $300 stipends for teachers.

Deputy Premier Dr. Natalio “Sowande” Wheatley, who is also the minister of education, said the stipends were designed mostly to compensate teachers for the resources they need to get classrooms ready for students.

Teachers’ salary increases, he said, will come after the planned public service salary review, which Mr. Fahie has said will likely take about six months to complete once it gets under way. The last major review took place in 2002.

Work on schools

Dr. Wheatley also said he was glad to see progress made on some “critical” projects in his portfolio despite this year’s financial constraints, like completing restoration works at Bregado Flax Educational Centre on Virgin Gorda.

He said while every minister would have liked to have more money to fulfil their objectives, they accepted that it was necessary to readjust and prioritise urgent needs in order to weather this storm.

“Now in the Ministry of Education, of course it’s difficult to cut things,” Dr. Wheatley said. “When you cut things, we really feel it because, of course, schools have to be able to operate. We have quite a few issues in our schools, because over the years our schools have been allowed to run down. There’s quite a bit of maintenance; there’s quite a bit of mould cleaning and things like that which need to be done with our schools because they have been poorly maintained for the last few years. But we are committed to solving the challenges.”

Without offering a specific estimate, he said the budget adjustment includes funds for a comprehensive effort to identify and eliminate mould issues, as was recently done at Francis Lettsome Primary School, Jost Van Dyke Primary School, and Leonora Delville Primary School. He said the air at Francis Lettsome was mould free as of last week.

“Certainly, we’ve been able to make some progress, but there’s lots more to be made, because there are many schools that need assistance,” he added.

Construction, lawsuits

Transportation, Works and Utilities Minister Kye Rymer said his ministry was able to make progress on some contracts even though it saw cuts this year.

“I know in my ministry we adjusted the [Public] Finance Management Act so that more persons would benefit from some of the projects,” he said. “As a government, we made sure that our local people, our local contractors, were able to benefit from the [Caribbean Development Bank] loan.”

As for other major expenditures, Natural Resources, Labour and Immigration Minister Vincent Wheatley said the government has spent “millions” defending against lawsuits. He didn’t offer examples, but said that money could have been used elsewhere in the budget.