Hon. Guy Joseph says for us to solve the situation, we must let the money flow. Hon. Guy Joseph calls in Government to spend more. Consider these facts: The Government of Saint Lucia can no longer borrow to meet its current expenses. This is due to market conditions. Our current expenses include $459 million for wages and salaries $167 million for goods and services which includes subsidies in fuel, interest payments of $137 million on loans. Our capital expenditure is $315 million of which $17 million is for the New National Hospital, $10 million is for Infrastructure, $14 million is for social programmes such as the assistance to children with disabilities. We have a current account deficit of $75 million. This means to pay wages and salaries, subsidies and transfers to keep our hospitals open, we need an additional $75 million dollars. So the question remains, if we cannot raise revenue to meet our current expenditure, how will we finance increased spending? How can we encourage more spending when we are not in a position to meet our current obligations? The government has proposed to reduce taxation to stimulate the economy. Personal Income Tax will reduce and so this will result in more disposable income. Corporate Taxes will reduce and will hopefully result in more money for further investment and expansion in the private sector and attract foreign direct investment. It is easy to advocate economic theories, but you must consider the peculiar conditions of the country before prescriptions are proposed. How can you recommend medication without examining the illness or diagnosing the condition? #TextBookEconomics The fact remains we have no money to spend and we have no room to borrow to keep up with out spending habits.
Posted on: Thu, 15 May 2014 15:09:27 +0000
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