Mr Speaker, Parliamentary Colleagues, to My lovely supportive wife, family, and friends generally, and especially a shout out to My PNP family.
I am here today because of the confidence you have placed in me at the ballot box and the support you have showed me over the years have been the wind in my sails: “It might have appeared to go unnoticed, but I’ve got it all here in my heart. I want you to know I know the truth, of course I know it. I would be nothing without you. You are the wind beneath my wings.
Condolences and Congratulations
To the cadre of professionals across government who would have provided input for the budget I wish to thank you for your hard work and dedication. My thanks especially to the technocrats in the Ministry who in preparing the budget, had to act on directives from ministers as policy makers as such this is the budget of the executive. Therefore, any criticism of the product is not a reflection of your hard work. My intention therefore is not to shoot the messenger.
Mr Speaker positional Leadership hinders one’s ability to deal with complex and dynamic situations. History has shown that the times make the leader. Every admired leader in history has honed his/her competence and courage through challenge and turbulence. He/she has left the world better than he/she met it; and every notorious leader has left ruin in his/her wake because of arrogance and autocracy.
Twenty first century challenges require authentic agile leadership and systems to respond rapidly to changes. It also requires comprehensive stakeholder engagement as the fulcrum of power.
It is through the consent of stakeholders, and their active involvement that inclusive benefits are achieved. Leadership must therefore be about a purpose larger than personal ambition, because if it is, the people who are led will suffer.
Like the rest of the world the Turks and Caicos Islands are faced with an unprecedented challenge; and our national survival requires extraordinary actions in the interest of all.
It requires leadership who will treat all with respect; leadership who will do the right things right. Meeting today to do the people business is doing the right thing, but I submit that it is not doing it right.
The government led by the Premier, had an opportunity to collaborate to ensure the full participation of all in a secure an environment as possible, and she refused to co-operate with the Opposition to achieve that.
Honourable Premier these are extraordinary times with extraordinary challenges, and in your position, you are aware of this fact more so than most. The circumstances therefore call for extraordinary responses, creativity and innovation. I had seriously hoped that you would have by now been convinced by the preponderance of evidence of the unpredictable behaviour of the COVID-19 virus and agree that the HOA should be held remotely especially since you were advised that it is possible.
The Opposition appreciate that it is crucial that the Appropriation Bill be passed for your Government stimulus package to be disbursed, and I reiterate what I said yesterday, we will not be an obstacle to that. We are here in the interest of our people – given that alternative avenues for making funding available have not been utilized. I will say what they are later.
We do not wish to stand in the way of you passing your budget. In fact, it is right that people be given relief at this time, albeit we do not think the level and amount of the relief goes far enough; we will address that in the Opposition contributions.
It is not right that given an alternative method for holding HOA that we should be forced to expose our person, our family and community to potential infection from the COVID-19 virus.
Your intransigence Madam Premier is particularly concerning considering the regular holding of Cabinet meetings have been done virtually; your observance of the physical shut down of the Premier’s Office and issuance of press statements from your residence, and the most recent advice of Cabinet to the Governor to allow the courts to meet virtually and Judges and Magistrates to preside over matters in the jurisdiction, while sitting outside the jurisdiction.
The country has been subject to your regular lectures, the finger wagging as you preach the policy of the lock down, the policy of self-isolation, the policy of stay at home and work from home. Good policies to stop the spread of the virus and to save lives.
But when it comes to your own house, and you certainly treat the House of Assembly as if it is your house, you dispense with all those policies with a regal shake of your head. A case of do what I say, not what I do.
We have come to expect this arbitrary treatment and dismissal of anyone else’s views, but this time this selfish adherence to my way or the highway has put lives at risk. Not just the members of the House of Assembly , but the support staff and everybody’s immediate family. And let’s be clear when I say risk, I mean our lives are at risk. We have people in this room who are classed as vulnerable and with your uncaring and dismissive attitude you have put people at risk. It is shameful.
My colleagues intend to demonstrate the lack of a coherent policy underlaying this budget and will be making the point that this disconnection to reality reflects a pattern of betrayal of the people of these islands. In that regard the theme and content of the Premiers address misrepresents the reality. Our more appropriate theme is: Reality Check – The Politics of Betrayal.
Madam you opened with the statement that the PDM is the greatest political party in the TCI. I don’t know the measure you use, and I have no doubt that Honourable McCartney had great ideals and aspiration for the PDM and the TCI. I knew McCartney, McCartney was a friend, and trust me Madam Premier you are no McCartney, and this PDM does not represent McCartney’s dream.
I realise that there will be much red meat thrown out to the PDM base over the next two days, most of which will be the usual attempt at character assignation rather then lofty ideas. Mr. Speaker allow me to inform the Premier of the genesis of the modern economic development of the Turks and Caicos Islands, by drawing the house attention to the partnership forged between TCIG and HMG in 1991. I read my letter to Michael Bawden in the wake of the unsatisfactory performance of the previous PDM government of which the third all Island member was a part.
Dear Mr. Bawden,
As the new Chief Minister of the Turks and Caicos Islands, I would like to share with you, on behalf of my colleagues, a long-term vision of our beautiful islands. It is a vision for which we are determined to lay secure foundations in our first term of office. And it is a vision that could become a mere mirage unless those secure foundations are laid; to lay them successfully we need the fu11 support and understanding of Her Majesty’s Government as is described in our document below “Progress through Partnership.”
With these foundations in place the Turks and Caicos economy will become self-sustaining by the mid-1990s.
The Turks and Caicos have the potential for an exceptionally bright future. Within twenty years the islands have the opportunity to become one of the most vibrant and wealthy small nations in the world. This opportunity is due to Turks and Caicos Islands enviable geographical position adjacent to the biggest economy in the wor1d, the USA; the changing leisure, tourism and related markets and particularly the rapid development of substantial new up market demand over the last two or three years gives unspoilt destinations, such as the Turks and Caicos Islands fundamental market advantages.
The Turks and Caicos key assets are long stretches of virgin beaches and coastal waters which have few equals. In terms of available area these resources are far more abundant than those, for example, in the Cayman Islands a country which now has one of the highest standards of living in the world. compared to the rest of the Caribbean, the Turks and Caicos Islands’ ratio of such natural resources to population is the highest by far. This makes an extraordinary rate of growth possible – without spoiling the abundant resources available.
Whilst the increasingly favourable external market environment is the key factor in providing the Turks and Caicos with unprecedented long-term opportunities internal factors will determine whether such opportunities are taken or whether the islands stagnate. There is a very delicate balance to be struck between a desirable rate of development and the “selling out” of the islands’ future; this calls for an equally delicate balance between encouraging integration and protecting the interests of the indigenous population. We are determined to get the balance right.
More than anything the Turks and Caicos now needs a period of stable, sensible and “management oriented” government. This is the major goal of our administration. We will work very closely with the emerging and vibrant private sector; confidence is already recovering from the trauma of 1990. It is our desire to improve dramatically the attitude, motivation and morale of our public sector which has been recognised as a constraint to the islands’ development.
In the past we have not made the best use of the expatriate civil servants HMG has kindly provided under the aid program. I hope that between us we can start to re-motivate this group and dissolve the cynical attitudes that some have developed. These British staff and others from the Commonwealth Caribbean are crucial to bringing about the rapid development of the islands.
A major task and the reason we have entitled the attached papers “Progress through Partnership” is rebuilding a close and fruitful relationship between TCIG and HMG. Whatever the faults in the past, the bad feelings engendered have been totally unproductive, we must forthwith put these negative attitudes behind us.
By reason of history, we are in the same boat together. Our administration’s goal of rapidly building a self-sustaining economy, leading to a national sense of achievement and self-respect is the same as yours. The mutual benefits are obvious and do not need restating here.
To achieve these goals, we must reiterate that we need substantial support from HMG in the short term; and we are prepared to pursue our case with vigour. Politically we can only establish stability through delivering tangible benefits relatively quickly, especially as on our part the Turks and Caicos Government needs to make some tough and unpopular decisions; in the immediate future these will doubtless give rise to some of the xenophobia referred to previously.
In economic terms our vision of the long term for the Turks and Caicos can only have a chance of coming to fruition if HMG gives the islands a solid push start down the right road. With such assistance we are quite certain that we can build a self-sustaining economy by the mid-1990s. Given the right encouragement the burgeoning private sector will help us achieve significantly higher rates of growth than in the 1980s. This growth in turn will provide levels of government revenue sufficient for our growing capital and recurrent needs.
The Turks and Caicos Islands have long been over dependent on HMG. Our administration is very serious about ending this dependency. We are as unhappy constantly coming back to you with the begging bowl as you must be in having to fill it. It is demeaning we should be concentrating on building our national self-confidence. We need to establish jointly how to get out of this aid dependency at the first opportunity.
I believe the program we have formulated will get the Turks and Caicos away from aid dependency. We are determined to do everything possible and practicable within the constraints of good government to get out of aid by 1995.
Our ability to reach this target can only be achieved with substantial seed capital from the UK government. We still have no capital budget of our own and have inherited from last year a deficit budget of $2 million and consequently a high overdraft. We need finance for both a radical reform program and to provide physical and economic infrastructure which will enable the private sector to do its job.
We intend to adopt unprecedented levels of financial prudence. Nevertheless, our budget is unhealthily skewed in favour of salaries and wages rather than service provision, with items such as maintenance substantially underfunded. Even with rapidly growing revenue and radical reform, it will be 1993 before recurrent surpluses are available and 1995 before they are substantial.
The following pages present a carefully calculated program for the future. It is in large part based on Mokoro’s Strategic Review, which I know has found favour with HMG as it has with us; In the program presented we draw your attention in particular to our proposed public sector and financial reforms; the establishment of a development corporation as the key element in our administration’s growth policies, and the very substantial physical infrastructural needs required to attract new investment. The last were recommended to you by Mokoro, and our planned rate of implementation is significantly slower than they proposed.
To turn to the bottom line, we are looking for a one-off payment of approximately $9 million to give our administration a fresh start. Without this payment we will be sunk before we start – with an inherited overdraft at its limit and the further prospect of a payment of some 20% of our annual budget to settle the TCNA case.
As regards the capital aid and technical co-operation programmes we are asking for a 5-year agreement totaling almost $12 million pa. On first sight this may look excessive as we have combined capital aid and technical co-operation. In fact, the increase in cash terms is more or less swallowed up by inflation since the last agreement. Without this level of support from HM, the economy will not get the “push start” we referred to above. Moreover, our administrative reform program will inevitably be delayed and possibly become unworkable. At the same time the ambitious growth targets are unlikely to be realised and economic self-sufficiency is likely to recede over the horizon.
These may all have unfortunate consequences regards to the political stability and ensuing private sector confidence that we have already referred to. We are well aware that high levels of aid for countries such as the Turks and Caicos sit uncomfortably with your ministry’s global objectives of poverty alleviation. The case we are putting to you though is very soundly based in terms of the returns that will be earned.
We suspect there are few places, if any where your aid can currently be so effective and within such a short time scale. Your full support will not go unrewarded. We are convinced that further aid will become unnecessary.
But you need more than our conviction. We believe it right and proper that the government of the Turks and Caicos Islands be fully accountable and below have suggested a regular review and assessment of our progress over the coming five years. We will welcome and encourage your full participation in our administration’s efforts to achieve economic independence by the mid 1990’s
Mr Speaker when the PDM took over Government in 1995 the objectives agreed with HMG had been achieved – the TCI had realised a surplus and the economy was on a high rate growth trajectory. That was the foundation which the PDM inherited in 1995.
Mr Speaker again in 2016 the PDM inherited a country from the PNP with a growing surplus and a growing economy. That strong economy and a package of policies and measures is The foundation on which the economy continued to grow until now, and for which the Premier has stood up and take full and exclusive credit for. The people of this country are neither blind, deaf nor dumb. The see, hear and speak of the progressive achieves of the PNP.
Mr Speaker the Premier do not wish for the people of these islands to know the truth. So, Mr Speaker I am here to unveil the facts, behind the fiction. But let me start with the heavy arm tactics that we see demonstrated by the premier in relation to holding this meeting.
There are three branches of government – The Executive, The Legislative and the Judiciary. The Executive has been meeting virtually on a regular basis since the third week of March.
Under Emergency Power – Legal Notice 32 Section 4 – the Courts have been empowered to meet virtually, and under Section 6, Judges and Magistrates are permitted to preside over sitting of the court outside of the country.
The Governor and the Premier regularly address the nation (sometimes jointly) from their places of residence. Parliaments across the Commonwealth, and most of the global organisations, are conducting meetings and conferences virtually.
To what end then is the Premier refusal to a ‘virtually’ sitting of the House. This is duplicity of the highest order. It is characteristic of the autocratic leadership style of our Premier, and a pattern of infringement on the rights of the legislative minority.
We love the people we serve, and we swore to represent them, and are willing and prepared to do so safely for their sake, and ours, by conducting the business of Parliament virtually – in the same manner that the Cabinet has done for the last month.
As leader of the Opposition Progressive National Party, I have stood with the Government in every major crisis, including the unaccustomed crime wave that has bedeviled our beautiful Islands; and I have showed solidarity immediately after hurricanes Irma and Maria in 2017.
My colleagues and I have voted for the regulations to lockdown the country and protect people. We believe a stimulus package in times such as these are morally mandatory and support the government in principle, but not in content.
Our position is that the stimulus package does not go far enough to support lives and livelihood, and we have offered an alternative that can stimulate the local economy and add value to the public.
We would like to direct your attention to our alternate stimulus proposal on the PNP TCI Facebook page. We also invite you to tune into a live video streaming at 4 pm on Thursday April 23rd when we will discuss the details of our alternate stimulus proposal. We will dissect the budget in detail and show what it is – inadequate.
The Premier knows that she does not need the Opposition to form a quorum or to pass the budget, but her intransigence is a ploy to spin the rumor that the PNP opposes relief to workers and business. The truth is this: the stimulus package does not need the budget to be disbursed. Here is why:
The stimulus package was hastily conceived for political reasons. The one-off payment was there to gain popularity. It was not conceived out of a well thought out plan to tie in employers so that we can preserve jobs and businesses as the economic fallout continues.
In fact, it seems to have been seen as a political opportunity to buy votes for the next election. A discretionary package which will be distributed with the oversight of the Premier. The usual checks and balances will be removed. The people of this country will be left to the emotional whims of the Premier. A frightening thought.
And in announcing this package in haste very little was done to examine the revenue projections that underlie this expenditure. In fact, listening to the appropriations committee light touch on the revenue projections that underlie this stimulus package it seems that there’s very little appetite from the committee to consider that the underlying foundation of this package is made of sand. Sand which will wash away as the waves of the economic recession crash onto the shores of these Islands.
Mr Speaker I think this is a good time to shoot down the myth propagated by this Administration that the cash reserves that this government holds are the result of prudent and conservative cash management.
Mr Speaker I would draw your attention to the page 2.8 of the budget book, I always see this as the bank statement for the Turks & Caicos Islands. Sometimes Mr Speaker I think the 455-page budget booklet is there to put my people off reading it, but I would recommend that everyone reads one page at least and that is page 2.8. The reason Mr Speaker why everyone should be familiar with this page is because this is our money. When it refers to the overall cash position of $210M that is our money.
The Government holds this money in trust for Turks & Caicos Islanders. When our money is given to us by way of services or directly, we do not have to be grateful to anyone. because it is our money and belongs to the people of these Islands. I just wanted to be clear because recently there seems to have been some confusion about whose money it is.
But Mr Speaker to return to the issue of cash management and of two of the major balances. First there is the National Wealth Fund, the $25M in that fund are not the result of prudent and conservative cash management, it is as a result of a law passed by the PNP administration, that requires the government to set aside certain sums of money.
The second balance I would draw your attention to is the development fund with a balance of $46M. I would also draw your attention to the amount that was budgeted to be in this fund as a result of the prudent and conservative cash management of this administration. The number is just to the left of the $46M under a column designated original estimate 2018/2020. You will see Mr. Speaker it is not $46M, nor $36M nor $26M the budget book clearly states that the minister of finance planned and budgeted for there to be nothing in this fund. Zero, zilch, null, nada, a big fat duck egg.
The fact that there is $46M for us now, is not the result of conservative financial management. In fact, it is the reverse, it is there because this administration could not manage to spend the money not through prudent planning , but through incompetence. The money is there because of good luck and that should not be confused with good management.
It is time for this government to face reality. The PDM stimulus Package is a joke! A bad one at that. You, the people, deserve honesty, you deserve transparency, you deserve loyalty, and most importantly, deserve respect from your government. Your government should not abuse your trust, but instead, your government should be there for you in good times and in bad. You do not need your government to be tying you up with doublespeak, misleading you by playing with the English language. You should be able to trust your government. You deserve a better Government, and your next Progressive National Party government will be that.
Part of that trust is that the government is open and honest about the alternatives that face this country regarding an exit strategy from the lockdown. The decision made in respect of the exit strategy will have a fundamental effect on this budget, but we are being asked to consider this budget with no idea of governments thinking beyond May 4th. This budget is till March 31, 2021. On April 6th the PNP issued a position paper setting out the alternatives with the hope it would stimulate debate. Two weeks later the government has been too busy to issue their own position paper or even give the country any idea of what the exit strategy will be.
There are hotels, airlines and businesses trying to plan for the future in a vacuum. I have seen the published schedule of the Premier with the various international and regional meetings. I heard her bragging today about the demand for her appearance on the international stage with world leaders.
I hope in the near future the Premier can find time on her busy schedule to consider the problems of the Turks & Caicos and perhaps let the country know what her exit strategy from COVID-19 is. I am not impressed by her promise of broad stakeholder engagement. If stakeholder engagement is so important to her why hasn’t she engage earlier?
For those who did not have an opportunity to read or see the PNP strategy let me provide the high lights. On 16 April 2020, the PNP offered the following Position Paper as it relates to the ongoing COVID-19 emergencies and support for those impacted by it: Which is in fact all of us.
McKinsey & Company in a report dated March 25, 2020 in response to the COVID-19 pandemic suggest that the imperative of our time is: “1) to safeguard our lives by: suppressing the virus as far as possible; expanding treatment and testing find cures – treatment/drugs/and vaccines; and 2) to safeguard our livelihood: by supporting people and business affected by lockdown; prepare to get back to work when the virus abates; and prepare to scale the recovery away from -8% to -13% trough.”
UK Labour Shadow Health secretary said, “A lockdown is a blunt tool without a national strategy” Columnist Nick Carter echoed these sentiments by saying that lockdown is a blunt instrument with no guarantees. What than should be TCI strategy to exit the lock-down relatively safely? The PNP analyzed five strategies both from a public health risk perspective and an economic perspective and now puts its position to the public.
FIVE POSSIBLE EXIT STRATEGIES
1) Mass testing and contact tracing
When coronavirus reached Turks & Caicos, each suspected case was tracked down and tested. Those found positive self-isolated while their recent contacts were traced and asked to do the same. The Government seems to have done a good job of this on the face of it. The World Health Organization has stressed throughout that testing, contact tracing and quarantine are vital steps towards bringing the pandemic under control; but there are now doubts about the proper monitoring of persons in self isolation in the absence of a dedicated quarantine facility.
According to the Guardian on Sunday – Prof Neil Ferguson, whose outbreak modeling team at Imperial College London is advising the UK government, said that if the lockdown sufficiently reduced new cases then mass testing and contact tracing would “almost certainly” be introduced to try to keep a lid on the pandemic.
This strategy has its challenges for Turks & Caicos. The Turks & Caicos is building up its testing capacity, but the expansion needed is unprecedented and other countries are competing for the same equipment and chemicals, and to date TCI is in a very vulnerable position from a protective equipment and medical capacity point of view. Contact tracing is also labour intensive.
According to Matt Hancock – UK Health Secretary – the UK is weeks from launching an app to track coronavirus spread. This app works by sending alerts to users who come into contact with infected people highlighting the critical role of testing and social distancing. The whole point of the testing and contact tracing is to “keep a lid” on the virus so it does not overwhelm the hospital and lead to a significant number of deaths. But there are potential ethical and privacy concerns. Assuming TCIG can develop its’ own app or piggyback on that of the NHS, balancing privacy rights against saving lives and the economy are challenging questions without easy answers.
The lockdown internally and externally seems to have worked. But the big concern is what happens when we lift the lockdown – internally and perhaps more importantly externally, letting tourists and returning residents back into the country. That lifts the proverbial lid.
2) Herd immunity and cocooning the vulnerable
In the absence of a treatment or protective vaccine, the TCIs initial approach to weathering the outbreak was to keep people “cocooned”. It might be possible to relax the lockdown for the less vulnerable and let them catch the virus. This would build the kind of “herd immunity” that is normally created through vaccination. If more than 60% of the population developed immunity, the outbreak could be brought under control. One of the problems with the strategy is that no one knows who is vulnerable. As the deaths of doctors, nurses and young children have shown, it is not only older people or those with underlying conditions who fail to recover from the virus.
This means acquiring herd immunity by letting the virus sweep through, puts a staggering number of lives at risk. Also, it means “cocooned” persons being older and vulnerable people will be locked down for a considerable time without access to the younger non-cocooned persons. The other problem is that tourists and returning residents arriving on Island could dilute the herd immunity and take us back to square 1.
3) Alternating between tighter and looser lockdowns
The lockdown and physical distancing are intended to spread the epidemic out so that health system do not face thousands of sick patients at once, but rather a steadier stream over time. This “flattening of the curve” can save lives if intensive care units can treat and discharge the most seriously ill patients before new cases arrive. The problem with the existing lockdown is that if there is a second wave of the virus the same issues will arise thereby requiring another lockdown.
The Imperial College team that is modeling the outbreak, found that the UK government may need to alternate between lockdown and looser rules, relaxing and then imposing the restrictions again if case numbers rebound as expected. This could potentially go on for months, depending on whether new antiviral drugs are found, or a vaccine becomes available. It is difficult to see how we could operate any sort of tourist industry with alternating lockdowns, nor whether our citizens would put up with it.
4) Antibody tests and immunity passports
Antibody home-testing kits have yet to be proved reliable. Some senior scientists say the tests may pick up only half of those who have had the virus, in part because people with milder infections tend to have lower levels of antibodies in their blood. The poor performance appears to scupper hopes for using the tests soon to issue “immunity passports” so that the immune can return to work – an idea under active consideration in the UK and Germany. Even if accurate tests can be obtained, they may not be the “game-changer”. No one knows whether antibodies in the blood mean full or only partial protection against the virus, nor how long any protection would last, making immunity passports a shaky reassurance.
5) The New Zealand models
New Zealand is seeking to eradicate the virus. Theirs is a (relatively) small island community. The government has announced that all international travelers including citizens and residents would be placed in compulsory quarantine for 14 days upon arrival. A network of up to 18 hotels are to be commandeered to house them. Cayman is also considering this approach.
In the long term this is unworkable given the TCI dependence on tourism. However, there is anecdotal evidence that overseas persons are driving the property market in New Zealand because it is seen as safe. Extending similar preference to homeowners and property buyers is worthy of consideration once it is deemed safe to open the Airport. However, we question the upside of any economic argument for opening the airport without restrictions.
We believe that given the circumstances, there are very few people contemplating a Caribbean holiday. In that regard, to open the border in May to a trickle of potentially sick tourists could result in the worst of both worlds. TCI current infection rate according to our national dashboard is low, but, if there is a second wave of infection that is much more damaging, then we are unlikely to be high on anybody’s holiday list for a long time. For that reason and for the protection of our Islands we believe that the islands should remain under quarantine and our borders closed at least until June 1.
We are aware that some resorts have been advertising availability for Mid May, and some airlines have advertised resumption of flying into the destination even before that time. Assuming an opening date of June 1 for TCI Airports, TCIG should engage stakeholders in a debate around alternative strategies and methodologies for opening the Airport and processing incoming residents and visitors. The Airport should not be open until this is done and a comprehensive protocol agreed. Key to the discussion must be the advice of clinicians. TCI can emerge in the next two weeks with a flat curve based on existing statistics; we should then begin to market TCI to our property owners and high net worth returning visitor with an earliest return date after June 1.
Conclusion on exit strategy
1) This is a must, but only seems to work if combined with (5) and a version of the New Zealand model.
2) Too many people at risk
3) Cannot be sustainable in the long term
5) A version of strategy 5 combined with (1) offers the best outcome with the least damage and the PNP is prepared to work with TCIG in exploring the best exit strategy.
Unless and until a comprehensive strategy is implemented to minimise the fallout from COVID-19 – one that is practical, low risk and gives confidence to all stakeholders – we oppose any pressure for a full-scale premature opening of our border. We recommend that the Government immediately engage with clinicians, tourism and travel partners and all other stakeholders to determine the way forward. After nearly three weeks of lock-down, we need to get creative and innovative to safeguard lives and livelihood.
SAFEGUARDING OUR LIVELIHOOD
We have given our Position above on strategies for safeguarding our lives, we now turn to the second imperative: safeguarding our livelihood.
1.0 According to the World Economic Forum: A third of the world population is under some sort of “lockdown.” Over 200 countries are affected, while, a second crisis, in the form of an economic recession, is underway.
2.0 On April 15, the International Monetary Fund (IMF) announced immediate debt relief for 25 poor countries to help them free up funds to fight the coronavirus pandemic.
3.0 UK Chancellor of the Exchequer Rishi Sunak stated that he will do “whatever it takes” to prop up businesses and jobs as Britain grapples with the coronavirus pandemic, and he’s putting the country’s money where his mouth is.
4.0 US President, Donald Trump signed into law a historic $2 trillion stimulus package as the American public and the US economy fight the devastating spread of Covid-19.
5.0 In the TCI, the government announced a stimulus package of $45 million of which $24 million is cash. By comparison, the UK stimulus package, which represents 10% 0f its GDP is largely in cash. If TCI were to follow the UK model, the stimulus package would be approximately $120 million.
We believe that the Government is right to be cautious and not distribute cash indiscriminately at the expense of eroding resources that have been preserved through the collective prudence of recent governments and the sacrifice of the residents of the TCI; and it must be careful not to set the stage for escalating its debt-to-GDP ratio at a time when the GDP itself is bound to take a hit. What that hit is forecasted to be, the TCIG has not indicated, and we are left to extrapolate that from the draft budget itself.
While TCIG must be given credit for its initiative, its response to COVID-19 has been arbitrary. If followed to the letter, the stimulus package will hurt rather than help, especially in the short term when help is most needed. We have given much thought to this issue and presented below are high-level recommendations of a win-win-win stimulus package that TCIG may do well to review. It is balance, and fair to all, and is cast against the background of the following considerations:
(1) The reality is that since the return of elected government, the TCIG has not been able to draw down on the PSIP at a rate equal to the annual appropriation for infrastructure and other development budget funded projects. At the same time, appropriations for staffing cost and a number of other expenditures proposals from the recurrent budget have not been spent; this means that there are many vacancies in the Service that have not been filled for years. Together, these two phenomena have contributed to the significant cash balances over the last seven years.
(2) Resort properties and their condominium and villa owners are unlikely to be focused on refurbishment given cash flow challenges arising from COVID-19. We are told that the government’s revenue before now reflected an annual relief of $10 million for refurbishment. An increase of an additional $5 million is not needed, particularly given the requirements of the general public and local businesses. Capital-intensive projects, such as refurbishments, (in a country that imports everything) results in cash being exported out of the country at a time when it is most needed in the local economy.
(3) The reduction of stamp duty for the next 90 days will only benefit persons who have already entered into contracts and therefore have implicitly agreed to pay the current rate of stamp duty. If transactions are going to fall apart they will do so because the buyer is unable or unwilling to expend his/her limited cash, given that he/she may have just experienced a reduction in his/her stock market investment or 401(k) pension plan. Giving away money that is practically in the bank is ludicrous.
That money should be made available to support the local economy. It is highly likely that property prices will fall due to this crisis, and indeed I know of persons who are waiting for that to happen. Coming out of the lockdown, the TCIG will need to review what incentives will be needed to stimulate Foreign Direct Investment (FDI), and amend the TCI investment policy accordingly, instead of knee-jerk reacting and giving away the country’s limited resources to the wealthy rather than use it in the interest of the needy. The proposed $5m give-away should be used to market the destination and get the country open for business once the all clear is given.
(4) Crucially, no one knows how long this crisis will last. Some projections place the peak point of the pandemic to sometime in June. Therefore, it makes sense to err on the side of caution in considering when to open the border and lift restrictions. Under these circumstances, preserving cash is important. Often, when businesses go out of business, it’s because of cash flow problems.
(5) One of the most important things for the TCIG to do over the next six months is to increase the internal circulation of money, and the best way to do so is to limit the purchasing of foreign goods and promote spending within the local economy. Most of the funding for the TCIG Capital projects is spent on imported materials rather than on local labour. Pushing through such projects now will drain the local economy of cash activity leading to dead money investments. As a result of the current crisis, only critical infrastructure projects along with those that are labour intensive ought to be undertaken within this financial year. As an alternative, the TCIG should consider a ninety day works program focused on cleaning up the country. The two-fold benefit will result in cash being injected into the economy, with the country receiving a direct and much needed benefit.
The Spread sheet represents the break-down of the PNP proposed stimulus package.
The tourism season for 2020 for all practical purposes is over. Business and people will have to live through December with very little income. The calculations show the different scenarios from TCIG and the PNP. The PNP is of the view that TCIG should hold the line of public spending in 2020/2021 to what it was in 2019/2020 making available more funding to assist the furloughed, unemployed and under-employed. We have therefore used TCIG expenditure figures for 2020 in our calculations. In these scenarios we have assumed that TCIG can potentially see a drop of up to 33% in revenue to a figure of $200 million.
Scenario 1 – Based on TCIG announced Stimulus Package:
a. TCIG stimulus package releases over time, $24 m in direct cash injection. The budget projects a deficit of $70.6 million. Combined they provide limited benefit to the livelihood of those mostly impacted by COVID-19.
b. The PNP Plan includes an injection of $60 million of public money into the local economy along with a $25 million bank guaranteed support for business for a total of $85 million. The TCIG guarantee for qualifying businesses is a low risk contingent liability that will have no impact on the TCIG’s cash flow. However, it will help business keep their best employees and provide them with much needed working capital for when the country reopens for business.
Scenario 2 – TCIG 2020/2021 Revenue drop to $200 million
a. Assuming severe economic contraction from a prolonged impact reducing revenue to $200 million and spending remains as projected, this will result in a deficit of $137m. Under these circumstances an unchanged stimulus package would put people and businesses at extreme risk.
b. Under the PNP alternative position, the public spending will be frozen, and while the deficit would increase to $135 million, the cash injection of $85 million would mean that lives and livelihood will be better protected.
The increase in the welfare budget is excluded because it is an ongoing recurrent expense that will no doubt be increased as demand requires, and it is the right thing to do. The write off of the water bill has no real direct impact on the economy and puts no cash in anyone’s pocket. It should have taken place sometime ago.
The crisis that we face is totally unanticipated and unprecedented; it will call for an examination of the way we do things in the TCI. We are in a new era! Some laws will have to be changed without sacrificing transparency and equity so that they make sense in the twenty-first century post pandemic global setting. This will be necessary to allow for a more rapid deployment of assistance when, where, and to whom it is required in time of crisis.
In relation to the current crisis, a better approach would have been to bring a one sub-section amendment to the PFMO to amend Section 7 (2) previously amended by Ordinance 9 of 2016 to 3% of the recurrent revenue in any year. Previously, there was no statutory limit that could be allocated to the contingency fund. This amendment was made to comply with the cash basis of accounting as provided for by the International Public Sector Accounting Standards (IPDSAS). With due respects to the standards we could have been easily amended to say 10% of revenue for 2019/20 and to include a sunset clause to the end of 2021. The effect would be an Immediate release of $30 million of cash to fund the stimulus package.
There is precedent by this very government; just look at how quickly regulation has been submitted to allow a foreign Judge to sit in a foreign country to preside over our courts virtually, and you want to tell me that it would have taken at least two months before the first dime is released to help the poor? Where and what kind of justice is that? It is critical to provide a base line survival grant to the unemployed or unemployable. Hunger is a strong incentive, and a bad moral adviser. Everybody has to eat shelter themselves, and have access to clean drinking water. What is proposed is a slap in the face and does not realistically address the needs of our people at this time.
I shall now look at the actual budget in some detail. Mr Speaker a bad precedent has been set in this House yesterday. The Chairman of the Appropriation Committee politically Grandstand for hours – effectively giving him two opportunities – to speak to the budget – one without unlimited time. Not for the first time Madam Premier, you have abused the rules of the house. These tricks and strategies may seem clever to some of your followers, but I believe the public tires of your games.
I was tempted to believe for a minute that the Premier was being magnanimous by deferring her budget presentation until tomorrow, however, I was left without doubt that she was not ready and used the time to have her side pontificate about the virtues and achievements of her government. The table banging of the government members during the Premiers address was matched by the public, but they were banging their heads against the walls in their frustration as their cupboards are as empty as the promises of this government.
The PDM members of the House live in an alternate universe. We are witnessing the classical tale of two cities by Charles Dickens’ famous opening sentence: “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way—in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.”
Listening to the government, if one were on another planet, one would think that this is the best of times. I say to the members on the other side and anyone who are inclined – to believe what the Premier need a reality check – A wake up call if you like! Truth is strange to the Premier. And I submit in the words of Flannery O Connor that “The truth does not change according to our ability to stomach it.” So, what is the program?
I believe the budget process started in August last year and by February they would have been putting on the finishing touches to the final budget. So, it must have been difficult as the economic impact of Covid-19 began to reveal itself, to consider that many of the assumptions underlying the budget had been blown away by the effects of the pandemic.
I suspect that sometime in Mid-February the Minister of Finance had a stark choice, rip up this budget and start again with a new budget, Or tweak the budget by throwing a couple of round numbers at the expenditure – say $15M for the hospitality workers including allied businesses in that industry. $10M for small businesses, $2M for the Health ministry. And drop the revenue a little assuming a return to normalcy in about August. No real policy!
We did not need a hastily put together budget that had not been thought through. What we needed Mr Speaker was a new budget with realistic assumptions about revenue and detailed plans to meet the needs of our people during a collapsing economy. This would have meant delays and perhaps the crowd pleasing announcement of $1,200 would have had to be delayed, but, we would then have ended up with a budget that reflected the economic realities of the pandemic and a plan to help our people that was comprehensive, transparent and fair. If this pandemic continues, fairness will be a very important factor.
So, Mr Speaker, in order to meet the political agenda of this administration, we end up with this badly flawed budget presented today, which allowed the Minister of Finance to announce a half-baked stimulus package, and for a while, bask in the glory of the grateful citizens.
However, Mr Speaker, the euphoria would not last and some “ungrateful nitpickers” started to ask questions. What if I am not a hospitality worker? What happens after the $1200 is spent? How long is it going to take to deal with 10,000 emails? That advice from Benjamin Franklin rings true Mr. Speaker; “If you fail to plan, you are planning to fail.”
I noticed Mr Speaker how the Government quietly replaced the email applications with an online form after many expressed concerns over the administration of 10,000 emails.
While the online applications are not the answer, they are an improvement over the incredibly vacuous idea of 10,000 emails being processed. But, as I said earlier Mr Speaker, this stimulus package was more about political grandstanding rather than a genuine effort to resuscitate the economy and assist our small businesses and people in a time of great need.
Mr Speaker I believe a tragic mistake was made when the Minister of Finance chose in the wake of the pandemic not to completely overhaul this budget using a prudent and conservative approach, rather than an approach that was driven by political imperatives and wishful thinking.
And this Budget is wishful thinking; it contains assumptions which after only 20 days of the financial year, are crumbling as the ravages of the economic recession takes hold.
Mr Speaker no one can see the future; what we must do is assess the evidence and use that evidence to try and assess the probable outcomes. In this case we must assess the probable effect of the pandemic on our revenues. If we look at the accommodation tax of last year 2019/2020, Mr Speaker, the first quarter accommodation tax, April to June, amounted to $23.6M (31% of the yearly total).
This year March tax payable in April was waived: April tax is payable in July , but as we had no flights we can expect that to be zero; the May tax, given that the lockdown has continued, will also probably be close to zero. So, the accommodation tax for the first quarter of this year will not be the $23M we collected last year it will be zero.
This budget anticipates a 39% decrease over the year 2020/21 in accommodation tax, but we have accounted for almost 31% of the decrease in the first 3 months. Is it credible then that in what economists are describing as the worst recession since the Great Depression, we are going to see only a 8% drop in accommodation tax in the period July-March 2021? Is that realistic? Is relying on these numbers prudent or conservative? Let me answer my own questions Mr Speaker. No! it is not!
It is in fact the worst kind of wishful thinking and this country could end up paying a high price for this wishful thinking. In 2013/14, a tough year after the banking crisis, but with nowhere near the problems of a worldwide lockdown, we had $200M in recurring revenue, this budget projects $261M. This is a fantasy in the mind of the Minister of Finance and will turn into a nightmare for the people of this country.
Mr Speaker in the Appropriations Committee, I heard the Government’s appointed member ask the budget director about the correlation between the other revenue heads and the accommodation tax. Presumably, he noted that the other revenue heads had not been reduced in the same proportion as the accommodation tax. The response from the budget director was that there was no correlation. Mr Speaker, while there is no direct correlation there is, however, an indirect correlation.
Accommodation tax is a clear marker of economic activity and the lower that tax collected the less the economic activity; and the less economic activity, the less revenue will be collected on the other revenue heads. If the other revenue heads were decreased by the same amount as accommodation tax, the recurring revenue would be in the region of $200M not the $261M that appears in this budget, and the projected deficit will double. Hence our scenario in the PNP proposed stimulus package in contrast to that which this Government has presented.
Mr Speaker $200M is a prudent and conservative revenue number – $261M is at its best wishful thinking, at its worst it is another deliberate attempt to mamaguy the people of this country, only this time the effects will be disastrous.
If you had just landed from Mars and read the Ministry of Health budget, strategic objectives and Key indicators that surround the appropriations for Health, you would have no idea that we are in the middle of a pandemic.
There is no mention of COVID-19 in the Ministry’ summary for Health Agriculture and Human Services. This is the biggest health crisis that the world is experiencing since the 1918 Spanish Flu, yet it does not get a mention as part of their strategic priorities!!! INCREDIBLE! The first mention of COVID-19 is on page 442 of the 455-page budget.
It seems not everyone got the wishful thinking memo, because in the section on the assumption regarding contributions to the NHIB the author predicted, a “. decrease by 60%”. On the face of it that means that the NHIB was budgeting for an unemployment rate for 2020/21 of 60 % which would have required an extra infusion of cash of $11.5M to the NHIB.
It seems that these assumptions were changed before the budget was produced because the reduction in contributions became 25% not the 60 % that had been predicted, which of course meant that the $11.5M is no longer needed well at least not in the fantasy world of this budget. Mr Speaker I have tried to understand the purpose of the stimulus package. What is it supposed to stimulate, who is it supposed to help? Its arbitrary and discretionary approach is bound to spread ill will. The package has already spread suspicion.
Mr Speaker everyone must be treated as a suspect given that the algorithm and permutation of the infection continues to baffle scientist and clinicians. As we speak various pieces of legislation are proving inadequate, for example many physicians are consulting with their patients via video link and a big question is whether the qualifying NIB rate to these physicians and pharmacies can be claimed. Pharmacies are not being paid, and physicians are wondering whether it is a productivity issue because of the lockdown or is it a money problem.
The Employment Ordinance if applied to the letter will witness the closure of many businesses; the cessation of work by many and the termination of many by companies who may be able to provide severance pay. Many businesses are literally ignoring the law and abandoning their employees and this is also wrong. If parents can no longer afford school fees, and government facilities are full how will these schools continue to operate?
In this new and virtual world that we are now faced with, the education of our children to operate and survive in the global economy must take priority. However, given this crisis, it may not be wise to reopen Schools until September, In the meantime, education can take place virtually, however there are other considerations that must be addressed. There is the question of access, access to equipment, devices, and data., and it will take time to adjust and restructure delivery programs.
There is also a financial cost associated with virtual education and teachers still needing to be paid. How and where I ask is this reflected in the Stimulus package and this budget? It would be unreasonable for corporate citizens to fund the entire package of data ad infinitum. Furthermore Mr. Speaker, our human resource is the most critical investment that we can make. Retooling, and retraining are essential elements to equip our people to compete in the local and global economy. That Mr. Speaker is what sustainability is about.
But let me ask the question, Mr Speaker, that those who are laid off but are not part of the Hospitality sector are asking. Do we not have to eat? I assume the answer from our Premier will be let them eat cake. But cake is expensive!
The most recent NIB actuarial study identified the employed population at about 23,000. If we remove the government and essential workers, that will take it down to about 20,000. Mr Speaker, that means that under the Premier’s plan over half our working population will get nothing. The sensible way forward was to work with existing businesses as they have done in the UK.
The information being asked for on the application form is available in the NIB and NHIP database. The online application form asks for 5 or 6 items of vital information including how much do you earn? How long is it going to take to fact check 40 or 50,000 pieces of information. This process will be open to fraud, manipulation, patronage, and simple mistakes. So, God help those who do not have the Premier’s phone number!
The only thing Mr Speaker that the stimulus package will stimulate is this Administration’s popularity in the short term, but with all the “ungrateful nitpickers” who get no money I would not expect that popularity to last long. The $15M for employees is simply not enough.
My proposal of $60M is much more realistic. I really hope that is enough. So, let me just make one final observation on the so-called stimulus package. Does the term “one off” payment in May 2020 sound like the answer to an economic crisis that by most intelligent observers expect to last until at the very earliest, early 2021?? As the assembled lawyers in the House of Assembly would say “I rest my case”.
Mr. Speaker, we cannot as a House address any issue that requires us to act in a time when Government revenues are going to be reduced while at the same time unexpected and unusual demands are being made on public funds without a fresh look at the continual funding of the SIPT trials and the Civil Recovery efforts.
The seemingly unending annual funding of the SIPT trials has been a bitter pill for the people of this country to swallow. In many quarters it is argued daily that it is and has always been an unfair burden that the people of the TCI were being asked to bear.
In Sir Robin Auld’s Commission of Inquiry Report he indicated that should a special investigation and trial be undertaken; the UK should shoulder the cost. Helen Garlick of the SIPT in her recommendation to the British Government likewise indicated that the FCO pays for the cost of the investigation and the trial. It appeared that in her good conscience she too could not justify the cost being paid by the people of the Turks and Caicos Islands.
The SIPT trials have been going on since December 2015 and some persons in the case were charged as far back as November 2011 For all of these years and even before during the Commission of Enquiry stage the Government of the Turks and Caicos Islands have been funding this exercise.
Against this backdrop this House cannot consider any response to COVID 19 without taking a look at whether this Country and its hard-working people can continue to be asked to fund this trial in these changed circumstances.
In a nutshell my position is that the British Government should now be called upon to finance the trial going forward. If the House needed justification for this position over and above the change circumstances that Covid 19 has presented us with I say the following:
1 The allegations in this trial are allegations that are made against principally former members of Cabinet. They speak to issues of Good Governance. Issues of Good Governance fell squarely under the purview of the Governor.
2. If the case for the Prosecution is to be believed much of the alleged wrongdoing surrounded development projects that had the approval of the Cabinet. The People of this Country required His Excellency to faithfully carry out his duty to them and ensure that they and by that I mean the Country was not prejudiced by any failure on the part of any elected Government to adhere to the tenets of Good Governance.
3. Again if the case for the Prosecution is to believed there can be no question that the Governor at the time harboured more than an inclination that principals of Good Governance were being breached because we see from the trial that he was in contact with the Foreign Office on the Point and was engaged with the Foreign Office and others in an attempt to secure the arrest in Miami of the then Premier.
4. For those additional reasons I say that the British Government has failed us and that they should bear the costs of the trial going forward.
My position is bolstered further by the fact that with one exception the lead counsels in the case and all the junior counsels in the case are non-Turks and Caicos Islanders. The investigation team was and remains entirely foreign and so I assume that most of their income from the trial finds its way out of the Country.
In the case of the Prosecution team there is nowhere in the Budget that says exactly how much is budgeted for them or the Judge. If we are paying someone and cannot tell how much we are paying them then perhaps the time has come for us to stop paying them.
This House cannot in good conscience vote to continue funding the trial when we know that the income from it is not being multiplied in our economy and at the same time our people are wondering how they will feed their children, pay their rent or mortgage or provide for their children’s education.
It is my position that all funds budgeted by TCIG for these SIPT trials and Civil Recovery should be diverted towards helping the hard-working people of the Turks & Caicos Islands who are battling this crisis.
Annual allocation for the prosecution and defense of the ongoing corruption trials is $8.1 million or 3.5 percent of the national budget. Allocations for the prosecution team is $3.6 million and the legal aid for the defendants is $4.6. That money can go a long way to feed the hungry in the TCI.
Finally, I would like to close with my simplistic view of our economy and the effects of the crises. Our economic model for the last 40 years has been very simple. Our Island economy is like a box. Dollars come in from outside, swirl around and then leave the box to pay for food imports, fuel imports, remittances, cars, iPhone etc. Some dollars stay in the box and end up as savings for individuals, cash resources for companies or monies held by the government.
Now today and for the foreseeable future truly little money is coming into the box, but it is still leaving to pay for food, fuel etc. although probably not cars and iPhone. Eventually if the pandemic lasts there will be no money left in the box.
So, what can the government do? It should react like every individual and company in Turks & Caicos. The priority is to preserve cash inside the box. It is my view that all capital projects should be reviewed. Any non-essential projects should be delayed especially those projects that mean money will flow out of the box. For instance, $3M on container scanning machines should be delayed. I know that this project is one that originated by me, and I know that it is important for security, but the same thing can be achieved through a service agreement for a low annual fixed cost.
How much food could that $3M buy? The capital projects that we decide to keep should be labour intensive and tied in with a package to ensure our people can eat. The hiring of additional government staff should be deferred, if we have significant unemployment it will be unfair to pick some for full time employment when so many are without income. A government works program might be the solution tied in with the labor-intensive capital works.
I think a lot of people’s savings are limited to non-existent so with no work and no money they will be looking to the government to help them and it is important that the government has the money to assist. The government will be the safety net for an increasing number of people and the safety net consists of a constant stream of cash.
Mr Speaker in mid-February when this budget was being put together, there might have been some optimistic view that the pandemic would be short lived, but today on April 21, the reality of its impact is palpable. As the infection rates and deaths increase across the world and economies falter, that optimistic assessment cannot stand.
Let me say again any reassessment in the last two months must have sounded the warning bells for this budget. On that basis of events, this budget should have been rewritten and should never have been presented to this House in its present state. It is a testament to the intransigence and stubbornness of our Minister of Finance that this budget has not been withdrawn.
I have no expectation that the Minister of Finance will withdraw the budget at this late stage because it would be a personal embarrassment, an admission of failure, and over the years, what the Minister of Finance has proven over and over again is that her personal standing trumps political, ethical and national concerns every time.
Tried and tested in times of challenges the PNP has a legacy of providing competent leadership focused on the building of a just and prosperous Turks and Caicos Islands nation. Our purpose is to develop a cohesive self-confident people through equal economic opportunities that promote a higher standard of living, equitable and fair justice for all, and sound social development that lends itself to a proud and productive citizenry. In Pursuit of our vision, we subscribe to the core values of democratic principles, mutual respect, solidarity and a progressive agenda of inclusion. That, Mr. Speaker, is Progress you know – Experience you trust and that is not reflected in the budget numbers.
So, I now appeal, Mr Speaker, to the rest of the members of the government, you cannot have been blind to the rapidly deteriorating economic circumstances. It is time you did the right thing to help us reject this budget before the damage is too great to recover and our people suffer.
If we pass this budget, we will be back here within two months as the revenue projections are shown to be fantasy and more money will be needed for our people. I am sure at that time the government will roll out their usual excuses something along the lines of “nobody could have foreseen the economic consequences”.
Well that will be shot down because the Opposition has seen the economic consequences and it is only blind obedience that stops the government members from seeing the obvious truth. History and our people will not be kind to the government members here who dodge their responsibility.
We often exaggerate in this House sometimes making mountains out of molehills, but this time it is a real mountain. A mountain of Everest proportions. I truly believe Mr Speaker this vote is the most important decision that this House has ever had to make in its history we cannot get it wrong lives depend on it. Throw out this budget.
To the Youths of the TCI I want you to know I have heard you cry. Your cause is our cause. Our country needs your ideas, energy, and passion. That is the only way we can turn our progressive platform into real change for the TCI. Mr Speaker in closing, I ask all my colleagues in the house to reject this budget, let us work on a more realistic budget that will enable us to look after the needs of our people for as long as this economic crisis lasts. This stimulus budget is a one off shot in the arm, and some will be happy when they get their cheque, but if this economic crisis continues the shot will wear off and this government will find a whole country in the words of the Premier “ungrateful nit-pickers.”