Government has announced plans to introduce legislation to facilitate a debt ceiling for Saint Lucia.
Prime Minister Dr. Kenny Anthony, during his presentation of the Budget Estimates to the House of Assembly on Tuesday, revealed that this move is part of a wider plan to reduce spending and the current fiscal deficit that the country is faced with.
The prime minister stressed that this will ensure that the financial problems confronting the island is gradually fixed.
“I believe that the time has come for Saint Lucia, to enact legislation to positively set debt ceiling for governments on the conditions of moving forward,” Anthony asserted. He however questioned whether everyone will adhere to the discipline of the levels of debt ceiling set.
Anthony informed that the first move would be to ensure that the constituents set their own fiscal position, adding that “they would have to live in accordance with it.”
He noted that it is practical for Saint Lucia to move in this direction, especially as many countries have already adopted this system and it has proven successful.
“We are borrowing finance marketing every year, which ranges from $45 million to $50 million … in the current situation they have closed it down to $40 million because of the cut backs we have had to make, but the point is for the past ten years, we have been borrowing these in bonds principally,” he added. Anthony said it is the responsibility of the sector to generate marketing finance and it should not be left up to the people of Saint Lucia to continue to subsidise this. Ultimately, the over $500 million borrowed over the last couple of years for marketing, is being paid by every Saint Lucian tax payer.
He said that 80 percent of the capital projects of the former United Workers’ Party (UWP) Government were financed by the incoming debt. Anthony said he will not lay blame on them, even though they were engaged in excessive borrowing; but said that he understood the crisis the then administration was faced with at the time.
However, Anthony believes that given the current financial constraints, his government will make every effort to reduce borrowing and if necessary, this will be done in a way that it could repay itself. He reiterated that this will help to help to improve the financial situation here.
Anthony however, slammed the UWP for allegations that public debt has increased by 14 to 18 points. He said this is impossible. The prime minister told parliament that in 2011 under the UWP, approximately $65.5 million was borrowed from financial institutions. Borrowing under the new administration has reduced significantly to about $8.1 million, he indicated.
His administration, he said, is seriously considering to present debt legislation, to ensure that the record set by his government of reduced borrowing is maintained. The prime minister asserted that it will be to the benefit of all, including taxpayers locally.