Minister of Finance Chris Sinckler says Government has reined in spending in all but two ministries, while remaining short of revenue collection by $162 million.
And he is projecting a $20 million excess in expenditure, caused in part by the failure of the Ministry of Tourism and of Education to cut spending. He warned the situation could worsen if Government does not implement fiscal reforms first mentioned in August.
“In total when you’re thinking of close to $300 million worth of cuts, to be out by about $20 million is not the entirely worse performance but, of course, it is not satisfactory for me; it is not satisfactory to the Cabinet and the Government, and therefore additional effort is going to be required to get that down,” Sinckler said during debate in Parliament on the Consolidation Tax Bill.
He said preliminary figures indicated that the country’s debt could reach $3.7 billion by 2013-2014.
This, he pointed out, would be $290.6 million more than the previous year due to current transfers and debt payment by about $249 million and $72 million respectively.
“We are not satisfied, to date, based on the figures up to the end of September where our revenues are; the revenues are down. Indeed, the major areas of concern for use are revenues in relation to taxes on income and profits which would have realised to date $162 million less than we would have projected for the period compared to the previous year.”
Spending on wages was up $337 million from its previous $334.5 million, but slipped some $4.4 million for business services.
There was a decline in current transfers of $22 million from $417 million to $304.3 million between April to September.
Compounding the problem was a drop in revenue from the corporation tax by $62.7 million, income tax by $69.4 million, VAT by about $39 million and excise duties by $5.2 million.
On the flip side, property tax revenue increased about $15 million, import duties went up $4.2 million to $82.8 million, while special receipts also moved up $3.3 million.
Sinckler said while the current fiscal performance was “worrying”, it was anticipated the situation would start improving next year when Government began rolling out several capital projects.
The Minister of Finance is due to give a full report on Government’s fiscal performance when Parliament meets next Tuesday.