“BEYOND THE PANDEMIC: CHARTING THE WAY FORWARD”

SALUTATIONS

Good Morning Mr Speaker, my Honourable Colleagues, Turks and Caicos, strangers in the

gallery, and those listening via the various platforms.

INTRODUCTION

Mr Speaker, as I rise today to present my Government’s 4th budget. I do so with humbleness of heart as I remain grateful for this opportunity to serve and to contribute in a real meaning way towards the development of this country. Mr Speaker, I am grateful for a number of reasons and

I pause to thank each stakeholder on this journey.

I am grateful to those who afforded me first the opportunity to serve and to be offered as a candidate, and that is the PDM Party (the greatest political institution in the history of these Islands) who has allowed me not just to be a candidate on three (3) separate occasions but has allowed me to serve as party leader for the past seven (7) years. Mr Speaker, I am grateful to the people of the Turks and Caicos Islands for affording me this opportunity to be elected and who afforded me the opportunity to serve as Premier having commended the majority of support as an elected member of the House of Assembly. Mr Speaker, I am also grateful for the support of my colleagues who sit in this chamber. Mr Speaker, history will record our time in this chamber and Cabinet, as a period of great achievement towards empowerment, engagement, restoration, and institution building in these Turks and Caicos Islands. For you see colleagues, we did not just change the government; we changed the course of history and the future, consequently, many lives have been positively impacted. But Mr Speaker, while much was accomplished, much more is left to be done.  Mr Speaker, my Government has proven that even when your feet are at the pedal with no letting up and after managing crises after crises; you can still deliver for the people if you have a political will and a heart to. Mr Speaker, you can still save for days like today, and you can still impact lives positively.

Mr Speaker, I am grateful to the almighty God, for it is still God who raises up leaders, and I am grateful to have been blessed to lead in this part of His vineyard. I am especially grateful to God for His leading and for those whom He placed in my life as spiritual advisers, prayer warriors and encouragers. I want to thank those who continue to pray for their Government as a whole, and I can say, Mr Speaker, I am firmer in my faith because I know the hand of God is on the Turks and Caicos Islands and despite of and in spite of, He continues to bless us.

But Mr Speaker, I will be nowhere without the loving support of my husband, children, mother, siblings, my entire family and friends support circle. They have had to endure much, and I thank God that they continue to support me in spite of, simply because they believe that I can make a difference and because they can see the bigger picture.

Lastly, Mr Speaker, I must thank the staff in the Office of the Premier and the Ministry of Finance who have worked with me and who have provided professional and personal support. My Teams are small but great, and I continue to enjoy every moment working with them.

Mr Speaker, on coming to Office in December 2016, we were able to secure approval for a new FSPS, a new budget, make changes to a capital program and pass the Budget of 2017/18 in record time ahead of the start of the new financial year. And yes Mr Speaker, purchase three (3) buildings in Providenciales before we ended the financial year on March 31st, 2017. These buildings will house the Police, Immigration, Customs, and Road Safety in purposed retrofitted spaces. This was a very strong indication to our public servants and the public we serve that we meant business and that we would be a responsive and progressive government. Mr Speaker, I wonder if persons heard me! I said that within the first three (3) months we were buying buildings to improve working conditions and to improve our efficiency in service to the Public! This zeal Mr Speaker; this vision and focus would carry us through the years to come. And Mr Speaker, my colleagues and I would often joke that we are a crisis Government. I believe that it was only through God’s grace and mercy, that we made it through. Mr Speaker, the God we served opened doors and gave this divine direction, and yes Mr. Speaker guidance, we were able to receive help from the least expected places. I salute Mr Speaker, the United Kingdom (UK) Government particularly former UK Minister Lord Ahmad, our regional and international partners, friendly Governments to TCI, and more recently our serving Governor, H.E. Nigel Dakin and new UK Minister Baroness Sugg.

Setting the Stage of this Government’s Term

Mr Speaker, but allow me to set the stage as we journey through these next few moments. Mr Speaker, we will be reminded of the road travelled, and the fact that this road has never been travelled before; not for the obvious reason, but for the myriad of challenges and the uncertainties that my Government has faced and manoeuvred through. This journey will remind us more of the successes, rather than those unfortunate circumstances. How can my Government be anything but grateful; when through many dangers, toils and snares, we have already come? Mr Speaker, it is by God’s grace that brought us safe thus far, and it will be by His grace that will lead us on.

You see Mr Speaker, nine (9) months after being elected, this Government had the experience of leading this country through two (2) major storms that impacted this entire Island chain. Let me remind us, hurricanes

Irma and Maria, two (2) weeks apart, impacted every island in the TCI Chain. Mr Speaker, lest we forget Irma’s winds recording as high as 200mph knocked out all communication systems, water systems, electricity, damaged both major hospitals on Grand Turk and Providenciales, destroyed one (1) of our Community Clinics in a largely elderly populated settlement, damaged our two (2) main Airports on Providenciales (our most populated Island and tourism centre) and Grand Turk (our nation’s capital), displaced the Police Headquarters and critical services, displaced over 80% Government Offices, damaged 13 of 15 Government Schools, caused widespread damage to homes and critical infrastructure but spared lives, major health challenges, our Cruise Ship Pier and our major Shipping Port. The immediate challenges apart from the provision of basic human needs of food, water and shelter, were to (1) restore communications (which was the greatest source of discontentment as this is even more essential in a multi-island nation); (2) restore electricity and water, (3) support the Hospitals; and (4) to aid in the safe stay and departure of tourists that remained on Islands.

Mr Speaker, while we had few security concerns in the general population, we were forced to send additional Police Officers to Grand Turk to provide support and to assist, as one of three wings of the country’s Prison were burned and rendered uninhabitable. Can you imagine this picture, Mr Speaker? As a new Leader; a new Government? But Mr Speaker in looking back, look at how far we have come. I say this to promote hope and confidence in God and in this team of men and women that led in our response supported by a strong public and private sector.

Mr Speaker, your Government, had the task of rebuilding not just critical infrastructure but our economy. Mr Speaker, our leadership during this time was celebrated around the region and the world.

Mr Speaker, I can recall waking up the next morning in Providenciales, not in Jamaica as some advanced, and wondered what next. My Government quickly determined within ourselves that we would not just be a Government that focused on the crutch handed to us by the storms, but one that was more focused on not just rebuilding, but rebuilding more resiliently. Mr Speaker, my Government, determined that we would not let the hurricanes alone define our term of leadership.

Mr Speaker, I recall standing in this House following the storms and presenting a Supplementary Budget that projected a huge deficit. But Mr Speaker after this projection and even before the Supplementary could be debated less than two (2) months later, the forecast began to improve. My Government was determined to get the lights on; we were determined to get businesses, and resorts opened so that persons can get back to work. Mr Speaker, we were determined to strengthen infrastructure, to open schools and to assist those homeowners through a policy that would provide incentives to repair. Mr Speaker, instead of losing the projected $52m which was approximately a 20% cut in revenue, we ended the year with revenue outturn for 2017-18 at $282m against revenue estimates of $274m, resulting in a surplus of $8m. CRIFF payout was $15.2m, which means that technically our revenue loss was approximately $7m. Mr Speaker, the Expenditure Estimates were revised downward by $33m, anticipating a greater than 12% reduction in Recurrent Revenue.

Mr Speaker, we were criticised for giving businesses, including resorts, duty-free concessions and a period of waiver of the Customs Processing Fee (CPF); and concessions and less red tape on work permits to import experts and urgent high skilled labour. Mr Speaker, it was this policy approach together with strong public-private sector partnership that was hailed by many to have made a difference in the quick and early recovery of our economy and critical services. In fact, Mr Speaker, it is documented in the Recovery Plan carried out by external consultants and was the reason for invitations being extended to me, to share our experience at regional conferences in Jamaica, St. Maarten at a Regional Conference on Rebuilding and Resilience, in Barbados on CDB’s Platform, in New York at the Donor Conference at the United Nations, in New York as a guest of the Clinton Foundation to sit on a panel and then to share in a Round Table discussion chaired by President Clinton. And yes Mr Speaker, an invitation was extended again by the CGI to sit on a platform with President Clinton in Puerto Rico in February, an invite which I painfully had to decline. Mr Speaker, these platforms on each occasion gave the Turks and Caicos Islands a great and positive exposure.

Mr Speaker, God moved, and many said it was a fluke and that we would lose the tourism numbers when others rebounded, but these post-hurricane numbers remained steady and when other countries opened up we peaked in tourism arrivals. Mr Speaker, we continued to sustain these numbers until recently.

But today Mr Speaker we face a new type of storm, one that has already begun to negatively impact our economy. Mr Speaker, as I say this, I think of how many Governments in a single term will have to spearhead the rebuilding of its country’s economy not just once, but twice. But unlike hurricanes, Mr Speaker, you do not know how long this pandemic will last nor the actual damage to come; be it the loss of lives (God forbid) or revenues.

For the second time, I am presenting a deficit Budget, and I do so in the face of grave uncertainty, not indigenous to TCI, nor of my own making or caused by me as political pundits suggest, but because the world is facing a pandemic; the kind not seen in recent times; one that for the sake of saving lives, saw Governments shut down its own economies.

As I carefully set the stage for this address, the chatter around us, the political disunity and politicisation of this crisis bears on my mind. Mr Speaker, but also bearing on my mind are the words President Obama offered as he endorsed incoming President Biden last week:

“The other side has a massive war chest; the other side has a propaganda network with little regard for the truth. On the other hand, pandemics have a way of cutting through a lot of noise and spin to remind us of what is real and what is important. This crisis has reminded us that government matters. It has reminded us that good government matters, that facts and science matter, that the rule of law matters, that having leaders who are informed and honest and seek to bring people together rather than drive them apart, those kinds of leaders matter”.

But then Mr Speaker, as I reflect on President Obama’s word, another aspect of good governments must be celebrated when it comes to mind: those who save for rainy days, those who exercise fiscal prudence and who do not bust monies wide open in days of plenty; those who spend wisely but cautiously despite the prodding and bating to spend violently and callously. Mr Speaker, we have had a single experience that stands out in recent government history, where during a period we were forced to mourn the absence of savings. Following the passage of Hurricane Ike, our country with no savings could not offer our people the assistance that was warranted. In fact, Mr Speaker, CRIFF funds and external country donations were used to meet recurrent expenditure. But also Speaker, we have had a single opportunity in recent government history to celebrate the type of good government that President Obama talks about that matter in times of crisis. We have only had a single opportunity to celebrate this type of government before, and it was again a PDM Government led by the father of this Honourable House and the 3rd All Island Elected Member whose fiscal prudence and savings stabilised this country following 9/11 and the fall out to our tourism industry. We honour his leadership even today, and we say thank you and follow in his wise steps. Mr Speaker, these days vindicate those of us who do so; who save rainy days. Imagine after two (2) storms Mr Speaker, we enjoy comfortable savings, but we have also spent the peoples’ monies in their best interest.

Mr Speaker, we sit here as a Government presenting Estimates and Plans for this new Financial Year but also using this opportunity to give an account of our stewardship during this our 4th Budget Session. And Mr Speaker, whether you sit across the aisle or support those across the aisle politically, there is cause for our people to celebrate the marked achievements of the people’s Government over these past few years in spite of the myriad of challenges.

BEYOND THE PANDEMIC: CHARTING THE WAY FORWARD 2020

Mr Speaker, as I laid this Budget on April 7th, I made a few statements, and I remind us of what was said. Mr Speaker, I said to you, my colleagues and the people of the TCI:

“…this budget is being laid at a time when our borders are closed, and the borders of most of our source markets are closed and are in turmoil. This budget is being laid at a time when there is a need for increased public health spending which is reflected in these estimates. This budget is being laid when the entire country is under 21 days’ – extended now – curfew as a measure to protect our people against the coronavirus. Mr Speaker, in our local economy, the tourism and transport sector employs more than 13,000 persons annually, whether directly or indirectly and contributed more than USD 357 million of the country’s GDP in 2019…This is one of our biggest challenges as the world is now facing similar challenges. This COVID-19 has the potential of taking a huge economic and social toll on the Turks and Caicos Islands”

Mr Speaker, all of our economic indicators are worsening, a contraction in the local economy is inevitable. Instead of experiencing growth as forecasted earlier this year, we are now facing a situation of a significant decline in GDP, an increase in unemployment and an increase in poverty.  The unknown at this time is the depth and length of the economic fallout; as a government, the way we manage this crisis will determine the level of impact it has on our people. 

Therefore, Mr Speaker, the Government must continue to act now and be decisive to contain the virus and to reduce the economic impact from the global fallout. 

Mr Speaker, the preventative measures that we have undertaken to contain the spread of the virus are inclusive of:

•    closure of our borders and schools;

•    isolation and quarantine of exposed individuals; and  social distancing measures

•    procurement of PPEs and other equipment

•    increased public health staffing

Mr Speaker, these measures are geared towards flattening the curve and avoiding our people from becoming seriously ill. These measures have, however, come at a significant economic and social costs, to the islands, but in the end, I believe we will all agree, that it was better to be safe, than sorry.

PERFORMANCE FOR FINANCIAL YEAR 2019/20 (PRELIMINARY RESULTS)

Revenue

During the financial year 2019-20, the Turks and Caicos Islands Government enjoyed strong revenue performance. The total revenue earned of $314.1 million exceeded the budget by $7.9 million or 3% while falling short of the prior year of just $0.9 million or less than 1%.

The major contributors to revenue were as follows:

• Duties collected totalled $126.7 million or 41% of total revenue.
• Taxes (including accommodation, restaurant, communications and other domestic taxes) amounted to $125.4 million or 40% of total revenue. This was $10.1 million above budget or an increase of 9% and $11.7 million above the prior year or an increase of 10%;
• Fees, fines and permits generated $37.2 million or 12% of total revenue. This was, however, $2.8 million or 7% less than budget and $6.4 million or 15% lower than prior year;
• Licenses amounted to $13 million or 4% of revenues. It was $0.9 million or 6% less than budget and $0.7 million or 5% below the prior year.

Expenditure

TCIG’s annual expenditure for the financial year 2019-20 totalled $239.3 million. While the total expenditure was less than budget by $20 million or 8%, spending for the year exceeded the prior year by $10.5 million or 8%.

The major components of expenditure were as follows:

• Personnel costs totalled $93.8 million or 39% of total expenditure. This was less than budget by $9.8 million or 9% but $3.3 million or 4% above the prior year;
• Medical costs (transfers to NHIP and hospital charges) amounted to $54.7 million or 23% of total expenditure. This expenditure was in line with the budget being just $0.2 million less but exceeded the prior year by $1.1 million or 2%;
• TCIG’s operating and maintenance expenditure amounted to $22.9 million or 10%. This was less than budget by $1.4 million or 6% but exceeded the prior year by $0.2 million or 1%;
• Subventions totalled $13.7 million or 6%. This was less than budget by $0.5 million or 4% but above prior year by $1.2 million or 10%.

Operating Surplus Before Capital and Payment for Public Debt

Due to TCIG’s ability to continue to generate strong revenue flows while managing expenditure levels, an operating surplus of $74.8 million was realised. While this surplus was less than last year’s surplus by $11.3 million or 13%, it significantly exceeded the budget by $27. 9 (.7) million or 60%.

Capital Expenditure and Public Debt

Mr Speaker, as I reflect on the Capital Programme for FY 2019/20 and the number of Capital Board meetings I chaired, and the daunting stories, I left a number of these meetings with only what I can describe in the words of Kenneth Blanchard, “There’s a difference between interest and commitment.  When you are interested in doing something, you do it only when it is convenient, but when you are committed to something, you accept no excuses; only results”.

 Mr Speaker, the team behind the capital program, continues to show their commitment for yet another year and for this I am thankful. Mr Speaker, I express my gratitude to Team Finance, the Deputy Governor and her team, the Accounting Officers and the Project Management Division of the Public Works Department, the Ministry of Infrastructure for their commitment in ensuring that the Capital Program was a success for yet another year.

Mr Speaker, the total Capital Program for FY 2019/20 was $41.6m.  This consisted of TCIG local funding of $36.7m and Infrastructure Improvement Account funding of $4.9m. There were fifty (50) capital projects under the locally funded program and of the fifty (50) locally funded projects, they were divided into eighty-three (83) sub-projects or contracts within projects. Sixty (60) Invitations to Tender (ITT’s) were issued, six (6) single-source procurement requests were approved, and sixty-two contracts were noted for FY 2019/20 valuing approximately $27.8m. A total of nine (9) projects were cancelled. The projects cancelled were as a result of tenders being significantly over the budget, tenders not meeting the criteria to move forward or no tenders were received in response to the Invitation to Tender.

Mr Speaker, the Infrastructure Improvement Account had fourteen (14) projects for FY 2019/20.  Of these fourteen (14) projects, there were fifteen (15) sub-projects or contracts within projects.  Five (5) Invitations to Tender were issued, and there was one (1) single-source procurement request approved and three (3) contracts noted at Cabinet valuing approximately $1.9m. Mr Speaker, we are not pleased with this performance, but eleven (11) projects were carried forward to FY 2020/21.

Mr Speaker, in total for TCIG funded projects and the Infrastructure Improvement Account funding, there was a total of sixty-four (64) projects and ninety-eight (98) sub-projects or contracts within projects.

A total of sixty-five (65) Invitations to Tender were issued, seven (7) single-source procurement requests were approved, and a total of sixty –five (65) contracts were noted at Cabinet valuing approximately $29.7m.

Mr Speaker, there were nine (9) TCIG recurrent or high-value projects for which Invitations to Tenders were issued. Five (5) of the projects were noted in Cabinet with a value of $2m. One project was issued that would be funded from the National Forfeiture Fund.

Mr Speaker, a total of twenty (20) Invitations to Tender were issued for Statutory Bodies for FY 2019/20. The ITTs issued were for the Turks and Caicos Airports Authority, Turks and Caicos Ports Authority, Turks and Caicos Islands Civil Aviation Authority and the Turks and Caicos Islands National Insurance Board. Six (6) single-source procurement requests were approved, and the value of contracts noted in Cabinet was approximately $19.4m.

Mr Speaker, taking into consideration the TCIG locally financed projects, projects funded from the Infrastructure Improvement Account and projects approved for Statutory Bodies in FY 2019/20, a total of ninety-five (95) Invitations to Tender were released, thirteen single-source procurement requests were approved, eighty-nine projects were noted by Cabinet with a combined value of approximately $51m and Mr Speaker they say this Government is not working. Fifteen (15) projects were cancelled.  Mr Speaker yet for another financial year, much have been achieved.

Mr Speaker, debt repayment for the period was $6.4 million.

OVERVIEW OF BUDGET FOR 2020/21

STRATEGIC PRIORITIES (FSPS)

Mr Speaker, the Fiscal Strategic Policy Statement (FSPS) of the Government was tabled in this Honourable House in December 2019. It was tabled following the United Kingdom Government’s permission for the statement to be tabled in the House of Assembly without formal ministerial approval from the UK Government. This Mr Speaker is a feat achieved due to our prudent fiscal management strategies over the last four (4) years.

Mr Speaker, since the tabling of the FSPS, a lot has changed in the global economy. Decisions are being made daily to save the lives of our residents and citizens. There is a national curfew; our ports of entry are closed. We are dealing with a global health crisis. Mr Speaker, our islands depend solely on tourism, and the global, regional and local economic and fiscal outlook has changed, dramatically.  Our 2020-21 revenue targets have been revised downward by 20%.

But, Mr Speaker, permit me to provide you with an overview of my Government’s strategic priorities that underpin the preparation of the Estimates of Revenue and Expenditure that we will debate throughout this week, all while, my Government is addressing a global pandemic. And I quote from my speech made in December 2019, when I laid the FSPS in the House of Assembly: –

“In a world of increasingly global competition, my Government continues to believe that national prosperity has to be created and sustained through innovation and creativity and that a country’s success is dependent on the forward-looking and dynamic nature of its firms and citizenry.

Hence, my Government will continue to invest a major part of the annual fiscal space in human capital, quality health care, citizens’ security, product development and social welfare. In so doing, it will focus on the removal of structural barriers that prohibit competitiveness to unleash a sustainable macro-fiscal environment that is favourable to private sector investments and citizens’ wealth creation.  The TCI Government will continue to focus on strengthening its fiscal position by improving the public finance and accountability framework”.

And so Mr Speaker, your Government has allocated resources to invest in our human capital, as the economic development of the islands is hinged on the quality of its human capital. Greater than 10 percent of the fiscal space identified in this FY, has been allocated to the development of early childhood, primary and vocational education.  We aim to link the Vocational Education Training (TVET Program) and the trade school to the labour market by addressing the existing gap of labour force skills; providing adequate training facilities; providing assistance to private institutions; and increasing government scholarships. This Mr Speaker will reduce our dependence on imported labour. Mr Speaker, we have made resources available to improve the School Nutrition Plan and Fitness Policy. In the fiscal year, funding has been prioritised to allow for the student population to be educated on healthy lifestyle practices that will reduce the financial burden of Chronic Non-Communicable Diseases (CNCDs) on the population.

Investment in Quality Healthcare Services

Mr Speaker, we continue to allocate the largest portion of the estimates to having healthy citizenry. The ongoing pandemic has underscored for us the importance of having strong public health systems.  Mr Speaker, your Government will continue to invest in the social and physical environments that will improve the quality of life of the citizenry to promote good health practices, improve the quality of life and the economic health of the country. 

Mr Speaker, your Government has allocated over $2.4 million in resources to continue the fight against the COVID-19 virus. Mr Speaker, your Government, is progressing our strategy to transform the Sports Department to a Sports Commission. This will allow us to have sports within the islands and to make sports work for all. While individual development (leadership, discipline, resilience, competitiveness, self-esteem, tolerance etc.) is critical, mental wellbeing, social and community development, economic development and physical wellbeing are also being flagged as the priority of the transformed Sports Commission.

The Government believes that an investment in sport is a dollar well spent; a dollar that will yield great returns; a healthier, safer and more prosperous TCI.

Allocation has been made available to continue the strengthening of the Primary Health Care Services –  environmental health, emergency medicine, mental health and special needs.  The continuous monitoring of the Private Public Partnership (PPP) contracts for the two hospitals is being given priority attention.

Investment in National Security, Citizen Security and Border Protection National Security Strategy

Mr Speaker, during the previous financial year, the Turks and Caicos Islands Government were able to progress and finalise the NSS which remained a priority for the Government and which was approved by the NSC to move forward nearly two years prior. My Government recognised the need for local government to proactively respond to matters of national security in a comprehensive manner in collaboration with the UK Government who is constitutionally responsible for TCI’s internal and external security.

Mr Speaker, with great pride, TCI developed and launched its first-ever National Security Strategy Serious Crime and presented the same on 22nd January 2020. The National Security Strategy has nine (9) identifiable threats with Illegal Migration and Disaster Resilience being the two main risk to our way of life in TCI. Other threats with national security implications include:

1.  Food Security

2.  Maritime Sovereignty

3.  Cyber

4.  Public Order

5.  Critical National Infrastructure Failure

6.  Terrorism

National Security Secretariat (NSS)Mr Speaker, moreover, to lead on the implementation of the National Security Strategy, my Government created for the first time ever, a National Security Secretariat (NSS) under the remit of the National Security Council (NSC), accountable to not only the Governor but the Premier for the continuous monitoring and evaluation of threats as well as for the delivery of the strategic objectives.

The National Security Secretariat (NSS) in collaboration with various Ministries, Departments and Agencies are leading on the implementation of several strategic objectives to enhance TCI’s defences in regards to national security. These include but are not limited to:

•    Establishing a TCI Border Protection Agency

•    Creating a local Contingent Military Force which will see the eventual creation of a Defence Force

•    Creating a Centralized Intelligence Function

The National Security Secretariat (NSS) will also lead on and liaise with our regional and international partners, such as the Government of the Bahamas with ‘Operation Bahamas and Turks and Caicos (OPBAT) and with the US Coast Guard in the mutually beneficial partnerships in responding to illegal migration and people trafficking.

Mr Speaker, my Government, is also pleased to advise that we are finalising the Memorandum of Understanding to be signed between TCI and the Bahamas to forge a first-ever bi-lateral agreement.

Enhancing Radar Capability

Mr Speaker, your Government, has made key investments in the past years but last year in particular to strengthen the radar capability and we are excited that when this project, which is funded under the NFF is completed, there will be an even higher success rate of detecting sloops. Counter funding is included for the second phase in this Budget.

Policing

The financial year for 2019/2020 for the Royal Turks and Caicos Islands Police Force was one full of challenges. The Turks and Caicos suffered a sustained rise in crime throughout 2019 which resulted in a significant rise in the number of gun-related crimes and 13 murders, the highest ever recorded in a single year. This trend continued into the last quarter of 2019/2020 with five (5) murders in this period. This rise in crime has put sustained and significant pressure on the finances of the force through increased costs for investigations, forensics and police overtime. A significant amount of officer overtime was also required to deal with the rising levels of gun-related crime.

Mr Speaker, most significantly, an uplift in funds within the financial year was required for an investigation into an international people smuggling operation involving Sri Lankan nationals. The additional monies were to fund additional investigators and interpreters.

Due to the rise in serious crime and stretched resources of the Force, additional money was provided in December 2019 for the first time ever in a Supplementary to recruit an additional 20 police officers. These officers are now at training school and will be working on the streets of the Turks and Caicos Islands in July 2020. In financial terms, 2019 saw the procurement of a new police aircraft, the procurement of another boat for Grand Turk, work commencing on much need repairs to stations including the Police stations on the Grand Turk and South Caicos, the Marine Branch in Grand Turk and the refurbishment of a new building for a Police Headquarters in Providenciales. Much of the repair works to our buildings remain ongoing into 20/21, as does the funding for the people trafficking investigation.

For the financial year, 20/21, the Royal Turks and Caicos Islands Police Force anticipate additional funds for a number of new spending initiatives. The recruitment of 39 more police officers will enhance the Response and Operations Teams across all the policed islands and a number of specialist teams including Investigations and the Tactical Unit. Most critically is the introduction of a community focussed policing model across the Turks and Caicos Islands to enhance the levels of engagement with our communities and to build greater trust and confidence in policing.

In terms of infrastructure, the police force Marine Branch will benefit from the acquisition of a new boat to add to the fleet that protects the territorial waters and marine border. A new fleet of vehicles for Grand Turk and South Caicos will improve operational efficiency for patrol officers on these islands. To further enhance policing, a Police Unmanned Aviation Unit (drone) would be established to support officers responding to incidents and planned operations. Our newly refurbished police buildings will benefit from new furniture.

Prison Management

This aspect of national security falls with the Ministry’s remit extends to the operations of Her Majesty’s Prison. Within this upcoming coming financial year, the Prison will be undertaking some significant initiatives, which the Minister will speak to, for the overall care and rehabilitation of offenders to ensure that they eventually become positively contributing citizens within our communities:

Mr Speaker, there will be a reintroduction of the rehabilitation program that assists in providing inmates with skills that can contribute to their livelihood once released and further reduce the probability for the recurrence of offences.

There will be active participation in the Chance for Change program which would assist in the successful reintroduction of ex-offenders into our communities.

Further for the care and safety of staff and prisoners, there will be further improvements to prison facilities that are intended to improve the management of the institution through the provision of critical infrastructure that will facilitate the educational and overall psychological development and improvement of prisoners. While we continue the work of rebuilding the Yellow Wing loss to fire during the Hurricanes of 2017, you Government will be carrying out the consultancy for the full construction of a new facility which will be rehabilitative in its focus: physical plant as well as the programs to run. During this past year, proposals were prepared and submitted to the NSC for consideration as to whether the proposed redevelopment should be a new development of the existing site or the construction on a new site. It was agreed on the erection of a building on a new site based on costings and time of delivery

There will be overall improvements to the security of the prison and the management of prisoners through the introduction of surveillance equipment and the introduction of methods of mitigating disorder in prison.

Disaster Management

Mr Speaker, building a resilient TCI and development of disaster mitigation is central to our National Security Strategy. Hence through DDME, your Government procured $ 400,000 worth of hurricane equipment and supplies for in the incoming hurricane season. At least four (4) critical staff will be recruited to bolster the capacity of the Department in training and community outreach mandates with an additional allocation of about $300,000. DDME is a key player in our COVID-19 response and mitigation and increased the number of trained persons and organisations through their outreach programs, increasing our ability to respond to hurricanes and other disasters. 

DDME will also benefit from the purchase of key equipment through the Capital Program and will be better poised for preparedness and response.

Investment in Protecting the Environment

On the environment, the Department of Environment and Coastal Resources (DECR) has led various initiatives from the drafting of various legislations to seeking international partners and collaborations. Mr Speaker, the removal of the Mega One Triton was symbolic of our commitment to protect and sustain our environment. Mr Speaker several policy initiatives are being finalised to improve beach access, development, use and vending. My Government is keen to strengthen the DECR and last year provided funding to restore the posts of reef specialist and to recruit a coastal engineer. These posts are critical in our response to climate change.  My Government will continue to provide funding to increase critical staff.

In the new financial year, additional key officers will be recruited.  A $300,000 is allocated to refurbish the DECR offices in North Caicos and South Caicos, $250,000 to purchase a new patrol vessel improving enforcement in the family islands. Similarly, vendor markets on Providenciales will also receive a much-needed facelift. We will complete our Environmental Strategy with the assistance of the Joint Nature Conservation Committee this year. An allocation of $300,000 will be used to conduct comprehensive EIAs on four areas to inform a decision on the on-going review of the boundaries of the protected areas. This matter has been ongoing for over a decade, and the actual work commenced approximately five (5) years ago.  We owe it to our environment to conclude these works but importantly to the homeowners.

Investment in Critical Bodies

Establishment of a Public Utilities Regulatory Body

The Government believes that public utilities inclusive of telecommunications, water, energy and utilities will be better managed under a Public Utilities Regulatory Body. To this end, funding has been prioritised to establish this Regulatory Body.

Anti-Money Laundering Initiatives

The Government is committed to maintaining a clean jurisdiction. The islands continue to comply with all international standards and funding has been prioritised for the enhancement of activities towards the realisation and promotion of international standards.

Gaming Commission

The further investment in the Gaming Commission will allow for the gaming sector to meet international standards and best practises as set out by the Caribbean Financial Action Task Force (CFATF) in the governance and monitoring of the TCI Gaming Industry.

Investment in Social Security, Civil Servants Development and Welfare

Mr Speaker, prudent fiscal management over the years has allowed for social support to be expanded and greater financial support is provided for the social categories of welfare grants, pensions and gratuities. 

Credit Union

Credit Unions are empowerment agencies and are favoured in many cases over banks. The Government, the public service Government, will invest $250k for the start-up cost to establish a Credit Union for the public service.

Civil Servants Terminal Benefits

Mr Speaker, my Government, remains grateful to the Office of the Deputy Governor who moved forward two critical initiatives in the financial year 2019/20. In 2015, a working group was created to review pensions and gratuities. This work had not progressed, and my Government committed to funding a consultancy to conclude this work. The Office of the Deputy Governor facilitated the consultancy to review the feasibility of terminal benefits for the public service. The project to review the feasibility of TCIG pensions and terminal benefits was successfully tendered and contracted. The successful consultant worked in collaboration with the Deputy Governor’s Office and the Benefits Committee. Cabinet was presented with a final report in March 2020, which proposed two options for consideration. My Government agreed to the next step in this process, which is intended to be completed in the upcoming FY. There will need to be a costing and/or actuarial assessment which is required to determine the long term cost to TCIG (the employer and the employee) as well as to ascertain the risk each option could pose to the Turks and Caicos Islands Government. Once this information is received, the Government should have a full and clear picture to make an informed decision. Nonetheless, Mr Speaker, this Government; your Government has placed in this Budget a sum of money towards the realisation and return of gratuity for public servants.

The second initiative, that of the Efficiency Audit remains a priority for a Government. During this year, a further review of the scope of works will be carried out against certain systems coming on stream and the increase in manpower in key areas.

Mr Speaker, I must pause to say that my Government is pleased that each year, Mr Speaker, we have been able to deliver on behalf of our civil servants. In 2017, we were able to give a Hurricane Advance (never before done), in 2019, we were able to reinstate increments which had ceased for a period of nine (9) years and to return the Christmas Advance under a TCIG Program.

DOMESTIC AND REGIONAL ECONOMY

Mr Speaker, I now turn our attention to the Domestic and Regional Economy, and I would like to remind this Honourable House that the Turks and Caicos Islands are part of a global village that is going through a turmoil right now as a result of the current pandemic. As a result of this pandemic and the uncertainty surrounding this virus, the world is currently in a serious crisis. Mr Speaker, despite the different projections no one knows what the economic landscape will look like after this lockdown as there is tremendous uncertainty surrounding this virus and the impact it would have on people’s lives and livelihoods.

Mr Speaker, the International Monetary Fund (IMF) in its April 2020 report forecast that the COVID-19 pandemic will severely impact growth across all regions projecting that the world economy would decline by 3.0 percent in 2020. Mr Speaker, the advanced economies which include our two (2) major source markets, namely the USA and Canada, is expected to decline by 6.1 percent. Mr Speaker, the US economy is projected to decline by 5.9 percent in 2020, and the Canadian economy is projected to decline by 6.2 percent in 2020. The Latin American and Caribbean economies are forecasted to decline by 5.2 percent in 2020.

Mr Speaker, the IMF as well as other agencies, have pointed to the fact that this pandemic may not recede in the second half of this year. This will lead to longer containment periods, worsening financial conditions, and further breakdowns of global supply chains. In such a scenario, global GDP would see a further decline of an additional three (3) percent in 2020. If the pandemic continues into 2021, global growth is projected to fall by an additional eight (8) percent in 2021.

Mr Speaker, the IMF points out however that if this pandemic fades during the second half of this year and further if policy actions are taken around the world help in “preventing widespread firm bankruptcies, extended job losses, and system-wide financial strains”, global growth can rebound in 2021 by 5.8 percent.

Mr. Speaker, as I would have mentioned in this Honourable House when I laid the budget, the Turks and Caicos Islands like every other country will have to reduce its previous GDP growth forecast for 2020 as a result of this pandemic. The Department of Statistics has advised that this situation is constantly evolving. However, based on what is happening in the global economy and the potential impact on the Turks and Caicos Islands hotel and restaurant sector and the transport sector as well as other sectors, the Department of Statistics has confirmed that the decline in economic activity will be greater than 15 percent. I must again remind us that this forecasting of the impact on the economy is a challenging exercise, as the Turks and Caicos Islands like many other countries in the region and the world do not know how bad the coronavirus outbreak will be nor for how long it will last. Most of the world is currently on lockdown. Nobody knows how long that will last but even after the lockdown it will take a while for the travelling public to regain confidence in undertaking this activity.

Mr. Speaker, just to give members of this Honourable House and the general public something to think about, in the recession of 2009, the Turks and Caicos Islands economy declined by 19.6 percent. This pandemic presents a worst scenario as the global economy is in trouble. All of our economic indicators are projecting worsening situations. Imports after experiencing growth for the last few years is projected to decline significantly. Stay-over and cruise visitors are expected to decline significantly. Unemployment is projected to increase. However, my government will be working with the labour department, the Ministry of Education, the private sector and other stakeholders to see how best we can mobilize resources with regards to cross-training individuals so that persons can be integrated in other sectors of the labour market quickly. It is through all of our efforts that we can withstand the impact of this current situation and get our economy back on track and that will take a committed effort from all of us. Mr. Speaker, in light of this pandemic, my Government’s reassuring message to Turks and Caicos Islands is clear: to every worker and business, in every island, we have your back and we will get through this together. I want to assure the people of the Turks and Caicos; you have a Government who is committed to doing everything in its power to minimize the spread of this pandemic.

RECAP THE  2020-21 FISCAL TARGETS

Mr. Speaker, two weeks ago in accordance with Section 20(1) & 21(1)-C and 52(1), of the Public Financial Management Ordinance 2012, I tabled before this Honourable House, the Estimates of Revenue and Expenditure for the Financial Year 2020-21 (Consolidated Fund) and the Estimates for the Self-Financing Statutory Bodies for FY 2020-21. 

Expenditure

Mr. Speaker, we have tabled the largest expenditure envelope in the last decade, totaling $337.0m:

• Recurrent expenditures of $294.9m
• Non-Recurrent Expenditure is estimated at $6.9m.
• $35.2m Capital Expenditure, in addition to the over $30m in projects that are being carried
• forward from 2019-20.

Staff Costs, Pensions and Gratuity

• Staff Costs at $104.7m, is 39.3 percent of Recurrent Revenue.
• Over 160 new positions have been created. 
• 68 new positions for border protection and security. 
• 58 positions have been added to the educational transformation program. 
• 11 new positons are being created for the Ministry of Home Affairs, Transportation and Communication.
• Pensions and Gratuities are forecast at $7.3m. 
• $1m, is relating to legislative allowances that may become due in this FY.

Transfers for Subvention and Hospital Charges

• Transfers to the NHIP – $33.3m
• The hospital related charges to satisfy our contractual obligations with Interhealth Canada (IHC) will account for $22.5m
• Tourist Board-$3.4m
• Community College-$3.0m
• Invest TCI –$2.8m
• Gaming Commission -$2.3m
• Integrity Commission$2.3m
• Sports Commission -$2.2m
• Civil Aviation – $1.3m
• Health Regulatory Agency – $671k
• Financial Intelligence Agency$627k
• Human Rights Commission $497k
• National Trust-$288k
• Complaints Commission -$255k

Travel and Subsistence Costs

• Travel and subsistence allocations is down to $5.2m from $6.5m
• Utility and communication allocation of $6.8m or 2.6 percent of recurrent expenditure.

Other expenditure allocations:

• Maintenance of Fixed Assets – $10.1m
• Professional and Consultancy $6.7m
• Contingency Fund – $6.3m
• Asset Rental Costs – $5.2m
• Training expense $1.1m.
• Grants and contributions at $33.5m are being allocated for payments to regional institutions, airline subsidies and welfare grants for the economic stimulus package.

Mr. Speaker, the top ten or areas of spending in the Budget are:

1. $84.7m or 25.1 percent of total expenditure for the Ministry of Health, Sports, Agriculture and Human Services; $81.1m of recurrent expenses and 3.6m in Cap. Exp.  This is inclusive of the $33.2m allocation to the NHIP.
2. $53.9m or 16.0 percent for the Ministry of Finance, Trade and Investment; That is $20.4m for recurrent expenses, $25.0m for the Stimulus Package and $7.6m for Capital expenses. 
3. $47.3m or 14.0 percent of total expenditure for the Ministry of Education, Youth, Library and Social Services.  $39.2m of recurrent expenses and $8.1 m in Capital Expenditure.  (and this move, though there is increased spending in the Ministry of Education is because we have accounted for the Stimulus Package in the Ministry of Finance)
4. $31.8m or 9.4 percent of total expenditure for the Royal Turks and Caicos Islands Police Force. That is $26.1m for recurrent expenses and extraordinary costs for the ongoing corruption trials $2.6m and 3.1m for Capital expenses. 
5. $26.7m or 7.8 percent of the total budget for the Ministry of Infrastructure, Housing, Planning and Development.  That is $18.4m for recurrent expenses and $8.2m for Capital expenses. 
6. $15.1m or 4.5 percent – can be announced for the Ministry of Home Affairs, Public Utilities and Transportation.  Approximately $2.3m, of the allocation is in the Capital Program.
7. $13.8m or 4.1 percent for the Ministry of Immigration, Citizenship, Labour and Employment Services.  With recurrent budget allocation of $10.4m.  Extraordinary Costs for the repatriation and detention expenses $2.4m and Capital Expenditure is $900k.
8. $11.7m or 3.5 percent for the Ministry of Tourism and Environment.  With recurrent budget
9. allocation of $10.9m.  Capital expenditure is $850k.
10. There will be a $7.6m or 2.2 percent of the total budget for the Judiciary Administration; Allocation for the SIPT legal aid program is $3.3 m.
11. Finally, there will be $7.3m or 2.2 percent of the total budget for the Attorney General’s

Chambers.  Recurrent expenses will account for $6.9 m. Capital Expenditure for the Attorney General’s Chambers is $400k. Within the proposed budget there will also be:

• $17.1m for pensions and gratuities, Catastrophic Risk Insurance Contingency Fund and debt servicing.
• $8.6m for the Governor’s Office
• $2.9m for the House of Assembly
• $3.3m for the Office of the Premier, Local Government and Community Affairs
• $2.7m for the Deputy Governor’s Office
• $1.6m for the Director of Public Prosecutions

Funding the Expenditure Plan

The expenditure plan will be funded from Government receipts and excess cash reserves. 

• Total revenue is $266.3 million.
• Recurrent receipts of $261.3 million
• Non-recurrent revenue is forecast at $4.8 million.

Revenue Details

• Import and other Customs related duties approximately $100m (38 percent) of recurrent revenue.
• Accommodation Tax – contributes $45.8m, approximately 17 percent of the receipts.
• Work permit and other immigration fees forecast at just above $30.1m is expected to contribute 11.1 percent of the revenue that is required.
• Stamp duty on land transactions, is expected to generate approximately -$21.3m or 8.0 percent of revenue.
• Excess cash surplus from the Ports and Airports Authority is forecast at $12m.
• We are also grateful to our donor partners, collectively they will contribute approximately $4.3m.
• Other revenue sources will account for $53.0m.

Debt Sustainability Ratios

Mr. Speaker, it is also noteworthy to mention that all debt sustainability indicators that were agreed by the Government of the United Kingdom and TCI will remain in intact, with the exception of the provision for having a surplus budget.

The unaudited results from 2019-20 show that there will be cash balances of approximately, $210.0million, $172.4m is liquid cash.  Approximately $140m of which is unencumbered. The $140m is approximately seven (7) months of cash available. The plan is to use $73m to fund the budget shortfall for 2020-21, allowing for just above 90 days of cash to be left in the reserve funds.

Mr Speaker, I pause here to break this down further against reality – the reality is that this savings can and will disappear over the next 3, maybe 4 months if things persist as is.

Mr Speaker, we are running a deficit Budget of $73m to offer the Stimulus Package of direct cash grants, waivers and capital injection. Meanwhile Mr Speaker, we are operating a Government that requires $20m each month to pay the 2nd largest group of employees, to bear the cost of many critical services that we are relying on today and for the overall functioning of Government.

Mr Speaker, yesterday, (with a system of direct bank deposit for payments that will otherwise be paid in the Treasury), we had only collected $1.5m in revenue. Mr Speaker, $1.5m against a need of $20m just on monthly obligations. Now Mr Speaker, imagine this to be our fate over May and June, which it most likely can be, we will then need to draw a further $19.5 million each month from these same savings, and so between April and June, just to maintain Government and its critical services at this level, we will need to spend a further $58.5m from these same savings where we are already drawing $73m. There then Mr Speaker alone is a total of $131.5m from this same unencumbered $140m in savings. Now Mr Speaker, we can have a reduction in the $20m which includes a lowered amount in travel which was cut to fund the stimulus, and a lowered amount in SIPT expenses which too was reduced to fund the stimulus but also may yield a tiny bit from the prolonged closure of offices or the reduced use of same (but Mr Speaker, it is unrealistic to think that we can stay locked away forever).

But Mr Speaker I paint a picture for us all, the picture that shows the savings which is a blessing buys us more time but will eventually fade. Mr Speaker and I want us to appreciate that those are fixed and somewhat seen costs. But Mr Speaker health’s costs are mounting and even yesterday as I mourn over $1.5m in revenue collections, health has asked for an additional $2m. Mr Speaker, these times are uncertain and we must all do our part to reduce the burden on health but also in managing what we have.

Mr Speaker as I look around the region, persons compare, I ask that we compare ourselves to the following examples, at this early stage: one with zero savings is having to borrow almost double our revenue; others have not as yet offered a stimulus package; another is engaging in talks right now of cutting civil servants salaries or another who has had to raise monies for PPEs for their front line staff or another who has had to raise monies to offer what we are offering in our COVID-19 Social Enhancement Program or those who have called on the private sector to support by adopting a family. Mr. Speaker, Turks and Caicos is blessed. No Government can do it all on its own and no Government has the monies to do all that needs to be done. Mr Speaker, again I say we must be grateful to God for what we can do and I make no apologies for it.

Mr. Speaker, I would like to make it abundantly clear that the revised revenue targets were prepared using a best case scenario.  In the event that, the global lockdown exceeds a 90-day period, my government will embark on a few other strategies to mitigate the fiscal risks.  The strategies will include:

1. Additional draw down from the Cash Reserves
   1. Cost containment strategies
   1. Lines of credit
   1. Grant funding
   1. Long-term loans.

Operating Deficit/Debt Financing

• Operating deficit before loan repayment is forecast at $70.6 million. 
• It is estimated that $1.1 million in loans already agreed with the CDB will become available in 2020-21.
• It is being proposed that the deficit will be funded from cash reserves, at a level of $73.0m.

Outstanding Public Debt

Approximately $3.0m was outstanding at March 31, 2020 in debt.  Loan repayment is forecast in 2020-21 at approximately $2.2m.

GOVERNMENT’S CO VID 19 RESPONSE

Mr Speaker, I outline my Government’s initial response to the COVID-19 Pandemic.

The outbreak of the coronavirus is resulting in a health crisis and a drop in economic activity that are without precedent in recent history. Containing and mitigating the spread of the coronavirus has rightly been the first priority of My Government, so as to reduce the incidence of the disease it causes (COVID-19) and thereby also limiting the pressure on the Turks & Caicos Islands health system. The containment and mitigation measures have had sudden and profound economic impacts. OECD estimates suggest that the containment and mitigation measures could lead to an initial decline in economic activity of around 25% in some countries.

Mr Speaker, this Government believes policy during containment and mitigation should be aimed to protect household income and employment, and assist with keeping businesses afloat.  My Government is cognizant that as containment and mitigation measures continue, further adaptation to fast changing circumstances will be key for this country. My Government will continue to fine tune fiscal and tax policies that continue to focus on limiting hardship on the people of this country, while maintaining the ability for a quick rebound in the economy.

As stated, protecting household income and employment remains essential during the containment and mitigation in this crisis. This Government is cognizant that particular attention must also be given to the self-employed and workers in the informal sector. As such my Government has budgeted $25.5 million in cash grants to be disseminated throughout the Turks & Caicos Islands.

This will include the following:

• $15m in Cash Grants for Individuals (employees and self-employed) in the hospitality sector who became unemployed or underemployed as a result of the COVID-19 pandemic. This does include businesses that serve the hospitality sector.
• $10m in Cash Grants Allocated to Micro, Small and Medium Enterprises MSME Sector
• $500k for Social Services. Under this stimulus-package the government has increased the social welfare budget by 100 percent. From this increased amount an additional $500,000 has been added to the budgetary allocation to further boost the welfare grants programme.

My Government is aware that businesses are increasingly exposed to solvency risks in addition to liquidity risks as the crisis continues. As such, this Government aims to create policies that adapt to the changing nature of risks, this includes the deferral of business licence renewals and HRTT remissions until 31st July 2020. My Government has also waived the HRTT remission for April 2020.  Lastly for businesses on the islands of Grand Turk, Salt Cay and South Caicos, this Government has written off all water arrears and committed to supplying free access to the municipal water supply for a period of three months commencing 1st April 2020. Mr. Speaker the design of these measures are to avoid increasing non-compliance risks and is by no means the end to our assistance.

Mr Speaker, as I have mentioned this is not the end of My Government’s assistance to employees and businesses or residents. We are aware that with the extension of the curfew this placed many business and persons in undue hardship. As such, this Government is assiduously working to progress an expansion of the stimulus grant programme. Mr. Speaker my Government plans to further develop the stimulus grant programme to provide income assistance to those persons affected during the mandatory shut down in the TCI.

Further Response to Pandemic

Appointment of an Economic Council

Mr. Speaker, the Turks and Caicos Islands Government in an effort to revitalize this economy following the pandemic will be engaging with the leader of the opposition and his members, major stakeholders, private sector partners, civic groups, etc. on the best way to build an economic system for the medium to long-term that is more resilient.  Some of the areas that will be explored in these discussions are the following:

1. The need to make Turks and Caicos Islands more self-reliant. We will seek to review the existing supply chains and strengthen local chains instead of having to rely and depend extensively on international markets for supplies.
2. Expanding the agriculture sector and training for our farmers in crop production and harvesting.
3. Ways of stimulating the economy through Inward Investments.
4. A strong advertising campaign for our tourism product to encourage persons to travel as the fear of travelling after the virus would be apparent.

• The demand for jobs in the essential services may arise.  We will explore ways of training, re-training and cross-training persons, our people with the necessary skills to make our people employable.
• The Introduction of the Credit Union Scheme for Civil Servants is advancing.  We will explore with our stakeholders the option of extending the scheme to their organizations to encourage savings amongst our people.
• The proposed and already consulted on unemployment benefit under the National Insurance Board, will be reviewed.
• We will explore plans for a steady revenue stream for Government as we continue to see that the reliance on Tourism is not sustainable.
• COVID-19 has definitely taught us to do things differently, so we will explore ways of digitalizing economic activity.
• We will review and revise if necessary the Investment Policy Statement agreed in 2018 and which promotes diversification of the economy.

Mr Speaker, it is my intention to announce this group styled the Economic Council within the next two weeks.

CAPITAL PROGRAM

Mr. Speaker, turning my attention to FY 2020/21 Capital Program, it is my government’s intention to continue critical investments in light of the uncertainties before us as a consequence of the impact of the COVID-19 pandemic.  As we continue this investment, the Capital Program for FY 2020/21 will be used as the engine of growth to further strengthen this economy.  As a result, the projects in the program were prioritized to address the following areas:

• Enhancing National Security
• Schools Redevelopment
• Disaster Management
• Community Development Projects and
• Enhanced Service Delivery

Mr. Speaker, Enhancing National Security is important to my Government as we try to battle with illegal immigration and the millions spent annually in repatriation costs.  As a Government we have budgeted to boost surveillance of our borders by investing in additional radar equipment, drones and the acquisition of boats and vehicles to address this.

Mr. Speaker, continuing school redevelopment is critical for my government as we seek to further strengthen our primary, secondary and tertiary level institutions as we continue with the thrust of educating our population from an early age straight to adulthood thus ensuring that our student’s social competencies and educational competencies are enhanced through skills in intellectual activities, creativity, inventiveness when they enter the labour market.

Mr. Speaker, as we continue critical investments throughout the islands, we continue to adhere to the revised building codes and to ensure that as we build back our infrastructure is improved and is more resilient as we approach the start of the hurricane season in just a matter of months.  Mr. Speaker, we have planned to address water shortage on the island of Grand Turk and South Caicos; purchase of mobile antennas for Disaster Management to ensure that the lines of connectivity are enhanced if there is a potential threat as the season approaches. We are also ensuring that critical buildings are equipped with generators and PWD is provided with heavy duty equipment which can be used to clear roadways in a timely manner if impacted.

Mr. Speaker, continuing critical investments are important to strengthen communities throughout the islands and my government have budgeted for improvements to the road network in North Caicos and Front Street in Grand Turk. The enhancement of the national stadium, parade ground and the community parks are places where persons can go daily to exercise thus encouraging healthy lifestyle initiatives.

Mr. Speaker, as we continue critical investments in the face of the global pandemic, my government is mindful of the many challenges that can likely occur and will be focusing on ensuring that food security is addressed by development of the Agro Park on the island of Grand Turk, and as the Farmer’s Market in Providenciales contract which was approved in FY 2019/20 will be signed shortly, my government is ensuring that the farmers on the islands of North and Middle Caicos and also on Providenciales have a place in which they can sell their produce to earn an income.

Finally, Mr. Speaker as we continue critical investments in our islands, service delivery is also important as we must ensure that our civil servants are housed in adequate facilities in which they are able to carry out their duties in an effective and efficient manner when delivering their service to the general public.

Mr. Speaker, the Capital Programme for FY 2020/21, is aimed at ensuring that there will be employment opportunities on every island in the Turks and Caicos Islands. The projects that will be implemented from FY 2019/20 along with the new projects for FY 2020/21 will assist in creating employment opportunities for many residents who will likely have to seek alternative employment opportunities as a result of the impact of COVID-19 on the economy of these islands and Mr Speaker, my Government will be pursuing vigorously, changes to the Procurement Program to ensure the objective – that is to ensure that everyone is included.

Mr. Speaker the noteworthy projects that will be funded over two (2) financial years in the priority areas are:

Enhancing National Security

• Police boat – $3.8m
• Drones for the Police – $150,000
• Vehicles for Police – $500,000
• Management of informal settlements – $400,000
• Additional Radar Station – $600,000
• Purchase of DECR vessel – $250,000
• Consultancy on the redevelopment of the Prison $950,000

Schools Redevelopment

• Technical block for Raymond Gardiner High School – $2.5m
• Retrofitting of new Vocational school – $500,000
• Long Bay Primary School Phase 2- $5m
• Furniture and equipment for Schools – $500,000
• Special Needs school for Grand Turk- $700,000
• Upgrading schools – $1.5m

Disaster Management

• Spare parts for Water Undertaking – $300,000
• Purchase of a new storage tank for Water Department for GDT- $2.5m
• Upgrade of water tank South Caicos – $750,000
• Purchase of mobile antennas for DDME – $300,000
• Back-up generators for all essential facilities – $1.9m
• Heavy equipment for PWD – $600,000

Community Development Projects

• Construction of Cadet Headquarters – $1.2m
• Blue Hills craft market – $650,000
• Redevelopment of Five Cays Community Centre – $150,000
• Roads in North Caicos – $2m
• Purchase of garbage trucks (GDT and XSC) – $540,000
• Mental health facility GDT – $300,000
• Leeward Park Phase 2 – $250,000
• Refurbishment of National Stadium – $900,000
• Agro Park – $950,000
• Grand Turk Sports Complex and shelter – $1.1m
• Installation of lights – Parade Ground GDT- $600,000
• Front Street GDT – $900,000

Enhanced Service Delivery

• Purchase of furniture for Police buildings – $500,000
• Furniture for PLS complex – Ministry of Immigration – $300,000
• Furniture for Customs Department – PLS – $300,000
• Vehicles for Government – $982,000
• Upgrade of scientific laboratory – XNC – $150,000
• Renovation of DECR office – XNC – $150,000

Ministry of Finance Investment and Trade Initiatives

Mr. Speaker, I turn my attention to activities and initiatives within the Ministry of Finance, the portfolio that I hold and offer a status report for at this time.

Cruise Sector

Mr Speaker, the Cruise Sector continues to be managed by the MOF. Pre-COVID 19 protocols, the Cruise Sector continued to show strong positive growth. When comparing the year-on-year (2018 vs 2019) growth in cruise passenger arrivals, we see that there was an increase of 90,571 (ninety thousand, five hundred and seventy-one) passengers.

Mr. Speaker, in 2018 we recorded the arrival of 1,022,752 (one million, twenty-two thousand, seven hundred and fifty-two) cruise passengers at the Grand Turk Cruise Centre (GTCC). In 2019 we witness the arrival of 1,113,323 (one million, one hundred and thirteen thousand, three hundred and twenty-three) passengers, an increase of 90, 571 (as I mentioned earlier). This 90, 571 presents approximately 8.8% strong positive growth.

Mr. Speaker, in the Porthole Cruise Magazine’s 2019 Reader’s Choice Award Winners, Grand Turk was awarded the Best Caribbean Beach Port. For information, Porthole Cruise Magazine is a bi-monthly, internationally distributed periodical dedicated to cruise ship travel, holiday cruise destinations and cruise ship experiences.

Mr. Speaker, the positive performance of our cruise sector would not be possible without the support and commitment of our cruise sector partner, Carnival Corporation. This support and commitment was further demonstrated in 2019 by Carnival, in proposing to commit an additional capital investment of approximately 25 million dollars in the GTCC to ensure that Grand Turk will be on the cruise itineraries of their new bigger cruise ships when they sail later this year.

Mr. Speaker, this proposed additional investment was solidified by Government and Carnival agreeing to agree the legal mechanism to facilitate the further development of the GTCC. My Government has received a number of interests in the cruise sector and they are under review.  We are encouraged by the interests and see a stronger sector growth to come. Mr. Speaker, the growth and projected growth of our cruise sector demonstrate that when it comes to tourism, be it long stay or cruise tourism, the TCI continue to be premium and sought after destination.

Infrastructure Account Performance

A total of $1.9m was expensed from this account in 2019/20 performance. The following projects have advanced:

• Reconstruction of Victoria Public Library contract for $450k was noted
• Repair and painting works to the Lighthouse costing $300k – has been tendered and should be awarded shortly.
• Removal of Mega One Triton – This project was tendered, awarded and completed in collaboration with the Ministry of Tourism. The removal of the MV Mega One Triton was completed on March 17th and delivered to a scrap metal site on March 25th. The infrastructure account covered $1.25m in cost relating to this project.

This Honourable House should also note that during FY 20/21 a total of $2.6m is budgeted to be spent through the infrastructure account. These projects include the following:

• The testing, asbestos abatement and demolition of South Base buildings. The testing, asbestos abatement and demolition of South Base buildings project is currently out to tender and should close shortly after the Covid-19 lock down period is over.
• The capturing, feeding and transporting of donkeys (Grand Turk). The capturing, feeding and transporting of donkeys -Grand Turk is out to tender and should close shortly after the COVID-19 lockdown period is over.
• Reconstruction of Governors Beach
• Rehabilitation of the JAGS McCartney Memorial Park                                     
• Renovation of Crab Tree Corner Park
• Renovation of the Downtown Tourism building
• Repair works to the Pond Street planters – Works to be a part of a wider District Development Plan for downtown Grand Turk
• Renovation of old Post Office Courtyard (3 buildings)
• Repair works to Clock Tower Square

Other Ministry Initiatives

Mr Speaker, the Ministry of Finance directly through its Ministry Staff continues to be work on critical life changing and life impacting initiatives. We are proud of the following works advanced this year:

Credit Union

Mr. Speaker, the Ministry of Finance, in 2019 saw the completion of the ordinances, subsidiary legislation and prudential standards for the Credit Union.  The intention was to have a regulatory officer recruited by the Financial Service Commission, and a credit union start-up assessment completed by the World Council of Credit Unions (WOCCU).  The scheduled time for the WOCCU’s visit was the week of March 16, 2020. However, by that time, New York, which had already seen its first positive COVID-19 test on March 1 and was experiencing a surge of cases. As such, out of the abundance of caution, TCIG asked the WOCCU to postpone travel to the country. It is important for me to say that the Turks and Caicos Islands is the first in the region to join this international body. We anticipate that Mr. Brian Branch, President and his delegation will be able to carry out this formative assessment at a later date; perhaps during the 3rd quarter of 2020.

Vision Document

Mr. Speaker, we came into the fourth quarter of the FY 2019/2020 finalizing the visual presentations of the Vision 2040 document which was expected to be rolled out at the end of March; but works have been delayed and an extension agreed for May 15, 2020.

Mr. Speaker, that said, the Vision 2040 document, as you are aware, focuses on the overarching goals for the country: 1) high national income and wealth; 2) a socially cohesive society; 3) a healthy natural environmental, heritage and cultural assets; 4) citizen security and justice; and 5) good governance.  The aspirations of the Vision 2040 document, as articulated, are more relevant today, than they have ever been.  Recall that the Vision 2040 document expounds on aspirations at these goal levels as well as on broad strategies for reaching goals. Cascading downwards, it leads to strategies that take a systems approach to economic development; conceptualized towards attaining a high quality of life for all TCI’s citizens, residents and future generations.

Visioning under a systems approach, is about understanding the interconnectedness of the five pillars mentioned; how one will help and support the other. 

Mr. Speaker, you will agree that we are facing unprecedented times in this COVID-19 environment.  The TCI now faces a plethora of risks and uncertainties that can alter, not one pillar but the entire economic system. Mr. Speaker, in the wake of Hurricanes Irma and Maria in 2017, we were focused on resilience – the capacity to recover quickly from difficulties resulting from what we may now call a short-term event; and thank God we did!  By comparison that was a sprint but now we are thrust into a marathon where perhaps the finish line cannot be seen; and may be headed down an economic path where sheer resilience may not be enough. The TCI’s path will need to be more centred on economic regeneration and growth. Mr. Speaker where as our vision has not changed, how we get there will be revisited.

Partial Credit Guarantee Fund Diagnostic Analysis

Mr. Speaker, this is another consultancy being funded through the Caribbean Development Bank(CDB). Establishing of PCGFs is a very specialist area and as such has attracted limited expressions of interest to the diagnostic consultancy that is required to be carried out. Pushing forward, the TCIG, however, is midway the processes per CDB’s requirements and the project must be completed by the December 2020.  It is hoped that with a partial credit guarantee system in place, banks within their existing lending structures would undertake a risk buffering mechanism that will enable credit creation and avail much needed cash flows to small businesses (which are the engine of our economy).  In so doing, it will boost consumption and spur economic growth. In other words, this is the mechanism through which we are ensuring that our small businesses are able to access credit.

Mr. Speaker, as I said before in this Honourable House, this Government will progress towards total financial inclusion in the TCI.  We will provide more opportunities for the unbanked and under-banked, and all of those small businesses that continue to cry out that they are either unserved or underserved by existing financial institutions.  The TCI is expecting to be counted amongst the 50% of all countries in the world, that the World Bank says have to their credit a Credit Guarantee Scheme for MSMEs. Mr. Speaker under my Government, the credit gap will be filled in the TCI; and the market failures and imperfections will be ameliorated.

TC Invest and Former TOLCO Loans Portfolio

Mr. Speaker a solution to the matters pertaining to the loan portfolio formerly held by TCInvest has been a long time coming. There were a number of delinquent loans and bad debts appearing as receivables in the loan book which for more than one reason, could not be collected or would be unreasonably difficult to collect. In February 2020, Cabinet gave approval to the write off of calculated accrued interest on the portfolio and a motion has been put to the House of Assembly for the write-off to be debated. Mr. Speaker, it is my Government’s belief that the writing off of accrued interest is a reasonable position to take; it conforms with relevant accounting standards, will rewrite the loan books to values that are deemed realizable and will focus resources to managing the more productive activities in the portfolio. Should the interest write-off pass in the House of Assembly, a mortgage consultant will then assist with implementing policies and procedure to effectively manage the portfolio going forward. Meaning, those persons who have accumulated large interests rendering their properties and the mortgages unpayable, will now have an opportunity for a fresh start in an effort to keep our people in their homes and also for Government to receive a return on their investment.

Financial Services Strategy

Mr. Speaker a consultant has been contracted to carry out works on the Financial Service Strategy; the recommendations call for a comprehensive review of the sector. Due to the total projected cost of full roll-out, the Government will need to approach the implementation of the recommendations incrementally.  At the foundation is the strategic marketing plan, a blueprint for promoting and growing the sector. It is envisaged that the plan will build on the TCI’s strengths, and serve to heighten innovation, stimulate, new thinking and prompt growth in the sector.

National Wealth Fund

Mr. Speaker, the National Wealth Fund (NWF) at the end of March, 2020 had a balance of some $25.80M representing principal and interest income over its holding period.  You may recall that the initial transfer to NWF was $8m followed by a second transfer of $17.7M.  During the last financial year, the Board of Directors of the NWF was constituted and works are underway for drafting of the Investment Policy Statement (IPS) of the Fund. The IPS is one of the most important tools used by fiduciaries in funds management. It will provide strategic asset allocations for the three separate Funds: Stabilisation Fund; Infrastructure and Competitiveness Fund; and Heritage Fund according to performance objectives, risk profiles, time horizon, etc.  These works are scheduled to be completed in June 2020; but may see a delay, as there will need to be a number of stakeholder engagements to develop a final document.

Home Owner’s Policy

Mr Speaker in April 2019, my Government approved and implemented a Homeowners’ Policy.

This policy’s aim was to assist in promoting homeownership and also providing an incentive to help those struggling to get on the property ladder or to protect the savings and equity that existing homeowners placed in their homes. The policy offers waivers in stamp duty on land transactions and Customs Import Duties. In February 2020 the Homeowner’s policy was further amended to:

• Allow applicants to benefit from both the stamp and import duty.
• To insert a section of the policy that speaks to damage of property resulting from manmade or natural disasters. This would allow existing homeowners to benefits from waiver of import duties on furniture and appliances similar to first time homeowners. The application for this exemption would have to be made within 180 days post the disaster.
• Amend the existing homeowners’ import duty waiver list to include the additional appliances.
• Mr Speaker, to date TCIG has received a total of 56 applications. During the FY 19/20 14
• applications for Stamp Duty waivers were approved, resulting in $148,830 in waivers being
• granted. In regards to waivers for Import Duties, 25 applications were approved and a sum of
• $60,481 in waivers were granted.

DEPARTMENTS UNDER THE MINISTRY OF FINANCE

Mr Speaker I now turn my attention to Departments and Statutory Bodies under the MOF. I wish to at this time, thank every department and statutory body for their efforts, partnership and achievements this year. We have achieved much together.

Revenue Department

I begin first with the Revenue Department.

Mr. Speaker today I will outline the Revenue Department’s plans for the fiscal year 2020/21 in the face of the foreseeable challenges due to the COVID-19 Global Pandemic.

The Revenue Department will continue to plan, design, develop and implement strategies that are goal oriented and achievable. The objective is to enhance compliance by streamlining the Department’s taxpayers’ services, enforcement and audit functions. The Department will fashion the 2020/21 programme strategies by strengthening its preventive measures and sustaining its current detective and corrective measures. These measures will assist in maintaining the greater than budgeted performance achieved in the 2019/2020 fiscal year.

 Mr. Speaker, we will now elaborate more on the Department’s preventive measures for this fiscal year.  The focus of the Department is to disseminate information and reach out to taxpayers (both current and potential) in an effort to minimize the levels of non-compliance. As part of this plan Mr. Speaker, taxpayers will see a transformation in offices around the TCI.

Mr. Speaker, in addition there are plans to enhance the public awareness programmes.

In this digital age we recognize the importance of using technology to create greater efficiencies. Mr. Speaker as we continue to upgrade our tax system, the coming on stream of the E-services will add to greater ease of doing business for taxpayers.

Mr. Speaker there are two phases to the E-services platform; phase one is the migration of E-services for business license and phase two is the migration to E-services for the other tax types such as Hotel, Restaurant and Tourism Tax, Communication tax, Insurance tax, Domestic Financial Sales tax.

Mr. Speaker, we are near completion of phase one and are currently at the stage of E-services user acceptance testing and training. Mr. Speaker, it is anticipated that the online services will come on stream by the end of May 2020. It is important to note that the phase two upgrade is dependent on the successful installation and completion of phase one.

Mr. Speaker, a significant preventive measure has been the Turks and Caicos Island Government initiative to consider a holistic review of its tax policy and administrative framework to help address numerous revenue challenges. The Ministry of Finance invited the Caribbean Regional Technical Assistance Centre (CARTAC) to provide technical assistance to ascertain the direction that should be taken.  The outcome was a proposal for a Central Revenue Department (CRD) which has been accepted by the Government. A Medium-Term Revenue Strategy (MTRS) will be devised as the tool to fashion the way forward towards a CRD. This MTRS is a high-level road map of a tax system reform over 4-6 years its policy, administration, and legal components. It embodies a government’s strategy to mobilize resources through a tax system that can finance its spending needs and secure macroeconomic sustainability, while reflecting distributional considerations and creating appropriate incentives for economic and social development.

Mr. Speaker, the Caribbean Regional Technical Assistance Centre (CARTAC) was contacted on the 5 February 2020 to provide technical assistance in regard to the Medium-Term Revenue Strategy. On 12 February 2020 CARTAC approved the Ministry of Finance request to assist with the development of a MTRS and indicated they have two weeks in their Financial Year for a TCI Technical Assistance (TA). However, due to Covid-19 IMF/CARTAC has suspended all travel for Technical Assistance (TA) and missions between March and the end of the fiscal year April 30 or until further notice. As such this will impact our TA assistance in regard to MTRS.

Mr. Speaker, the Revenue Department recognizes that detective measures require more resources to be effective and have established strategic partnerships with other Caribbean counterparts that have a strong tourism base similar to ours.  Staff will benefit from professional attachments to these Caribbean tax jurisdictions and it is expected that this will provide exposure to initiatives that will assist us with dealing more efficiently with the Airbnb and VRBOs in the collection of taxes.

Mr. Speaker, the Department will continue to collaborate with CARTAC for guidance, training and reform strategy.

Finally, Mr. Speaker, note that my Government remains steadfast and resolute in its commitment to strengthen and modernize its tax system and thereby improving the business environment by continuously building human and capital capacity in its Revenue Department to aid in the collection and sustainment of our tax revenues.

Accountant General’s Department

The TCIG remains committed to prudent financial management including accurate and timely financial reporting. The monthly, quarterly, half year and annual public accounts are prepared on the cash basis of accounting in accordance with International Public Sector Accounting Standards (IPSAS).

We continue to work assiduously towards the transition to the accruals basis of accounting in accordance with our five-year roadmap which is expected to be completed by March 2024. This transition involves several major projects that will see the continual introduction of new policies and procedures, upgrade of existing systems, implementation of new systems and the eventual consolidation of the Government’s annual accounts with all statutory bodies. There is still significant work to be done in the transition phase but the Government is confident that we are on track and committed to getting it done. 

We are proud to report on the successful completion of the review of the chart of accounts and the fixed assets project. The upgrade of Smart Stream is ongoing and is expected to be completed by the end of this month. Significant strides have been made in developing the online payment and receipting platform and this is expected to go live by the end of the first quarter of this financial year.

Upcoming projects for FY 2020-21 includes the implementation of a perpetual inventory system and accounting for accounts receivables. This will see the enhancement of a much more complete balance sheets that shows the true worth of these islands.

The Accountant General’s Department will continue its efforts to ensure that all vacancies are filled and that all staff members are provided with the relevant training and tools to continue to deliver efficiently and effectively.

Department of Trade

The Department of Trade, Industry and Consumer Affairs was recently established on 3 May 2019 tasked with facilitating broad based economic growth and sustainable development through the establishment of a robust and efficient trading environment. In this regard, the Department is working on a number of initiatives aimed at improving the growth and development of domestic and international trade.

With respect to domestic trade, the Department has held a number of capacity building workshops and information sessions aimed at improving the development of small businesses in the Turks and Caicos Islands. These training sessions will continue in the new financial year as the Department acts to ensure that businesses get the requisite training that would ready them for widescale local distribution and export. To this end, the Department is developing an agreement with the Caribbean Export Development Agency. The Caribbean Export Development Agency is the primary trade and investment promotion agency in the Caribbean. The Agency will equip small businesses in the MSME sector, with the tools necessary to enhance their competitiveness and brand value. The Department will therefore work closely with the Centre for Entrepreneurial Development, CED, to facilitate the delivery of various training modules.

Work will also be continued to spur activity in the domestic market by increasing events aimed at the growth of alternative industries. These include the cultural, creative and STEM industries. The Department has therefore established partnerships with the United Kingdom’s Department of International Trade, Curacao’s Ministry of Economic Development and the International Centre for Parliamentary Studies. Moreover, as we endeavour to improve and increase domestically produced goods and services, the Department of Trade, Industry and Consumer Affairs has initiated discussions with the Caribbean Regional Organisation for Standards and Quality. This partnership will allow for the development of a national framework to strengthen the quality and standards of goods produced locally.

While working to cultivate an organised, business savvy and export ready small business community the Department will continue its efforts at facilitating international trade agreements. The Department will continue to provide the necessary technical advice as it relates to opportunities for the Turks and Caicos Islands to engage in free trade with countries trading with the United Kingdom in the post-Brexit era as well as establish bi-lateral agreements with existing trading partners such as the Dominican Republic. In addition, the Department will assist with the development of a national concessions policy to make it easier for small businesses in the Turks and Caicos Islands to do business. Towards this end, work has commenced to implement better structured systems to allow for easier and fairer access to existing concessions. The Department of Trade, Industry and Consumer Affairs with the assistance of the Customs Department, has prepared draft amendments to the exemptions under the Customs Tariff and a draft Import Duty Concession Application form has also been developed. A set of standard guidelines on the use of the Minister’s statutory powers to grant import duty exemptions under Section 71 of the Customs Ordinance will also be developed.

The establishment of a robust and efficient trading environment is not limited to the growth and development of trade in goods and services in domestic and international markets but extends to include protection of the rights of persons who consume those goods and services i.e. the consumer. The Department of Trade, Industry and Consumer Affairs assumed responsibility for the enforcement of the Consumer Protection Ordinance on 24 February 2020 following the entry into force of the Consumer Protection (Amendment) Ordinance. In the new financial year, the Department will work to promote and protect the rights of consumers. A national consumer education and awareness campaign will be launched across the Turks and Caicos Islands and a mobile application aimed at encouraging good consumer spending habits will also be introduced. In an effort to assist the Department with achieving its agenda, the Government has approved the expansion of the Department such that the Director of Trade will now be joined by a Senior Trade Officer and Consumer Officer.

Department of Statistics

Mr. Speaker, as a result of the social distancing rules that is currently in place and which will be applied going forward the department of statistics has suspended all surveys. This include the cost of living assessment, the Multiple Indicator Cluster survey and all other surveys. As you would know this will create a significant challenge as a lot of the work done involve surveys. Work is however, being done with international agencies to see how best to conduct these surveys utilizing other means that allows the department to practice social distancing and it is hoped that these surveys will get back on track shortly. The Department is however updating its website constantly with administrative statistics as they become available.

Mr Speaker, just to offer further on these two important surveys, the MICS is now at the tidying up phase which involve making call backs to households that previously could not be reached. This will help to improve on the sample response rate. However, because of social-distancing rules the Statistics Department is now working with UNICEF to have these remaining households completed by telephone and other electronic means. During his last visit earlier this year the UNICEF representative for the Eastern Caribbean expressed to the PS of Finance that he was pleased with the progress of the TCI MICS survey so far and is delighted that it is now nearing completion. We are the first territory to carry out this important survey.

The MICS results are critically important for the purposes of Sustainable Development Goal (SDG) monitoring, as the survey produces information on 31 global SDG indicators. The MICS data is also a valuable source of information for planning and monitoring purposes.

The Turks and Caicos Islands MICS therefore has as its primary objectives:

• To provide high quality data for assessing the situation of children, adolescents, women and households in the TCI;
• To furnish data needed for monitoring progress toward national goals, as a basis for future action;
• To collect disaggregated data for the identification of disparities, to inform policies aimed at social inclusion of the most vulnerable;
• To validate data from other sources and the results of focused interventions;
• To generate data on national and global SDG indicators;
• To generate internationally comparable data for the assessment of the progress made in various areas, and to put additional efforts in those areas that require more attention;

Mr Speaker, the next important survey, now suspended and one pushed by my Government as priority is the CPA and cost of living survey which was approved in 2018. These works have been progressing with normal survey delays periodically which came about mainly as a result of difficulty in sometimes being able to interview respondents and other factors. However, it was still on track prior to the current delay which has forced all countries to suspend their surveys. The institutional analysis and the participatory poverty assessment component of the CPA has been completed and is now in the report writing phase. The survey of living conditions has been suspended since March and will resume as soon as it is safe to do so. Other countries in the Caribbean had to also make this decision as these surveys involve face-to-face contact. The Department of Statistics is however working with its regional advisors to see how best to get this survey back on track utilizing other survey techniques which will maintain the integrity of the survey and does not introduce unnecessary bias in the survey process. This will like with the case of the MICS allow the survey to continue without having to break social distancing rules. This new survey is currently being worked on.

Customs Department

Mr. Speaker, I am happy to report on the successes and achievements of the Customs Department for FY 2019/20, as well as the Department’s plans for FY 2020/21, facilitated by my Government.

Mr. Speaker, the Customs Department achieved a revenue yield of $130mil, which was approximately $1mil above the budgeted $129mil, and approximately $4mil over the previous year’s collections. The favourable variance is partly attributed to economic factors such as the increased tourist arrivals which resulted in increased imports and therefore increased collections in Import Customs Duty, Customs Processing Fee and Aviation Fuel Royalty.

1. Mr. Speaker in FY 2019/20, the Customs Department implemented various compliance methods and system controls aimed at improving revenue performance. It is anticipated that these will continue to operate in future FY’s. In particular, the focus will be on devising and implementing operational strategies to mitigate risk associated with Revenue leakages and ensuring that proper duties and fees are collected from importers and contraband detected at the border. The main areas of focus are:
2. Enhancing the Entry Processing Unit’s ability to scrutinize declarations to ensure that non-declared and falsely declared goods are captured and paid into Customs;
3. Strengthening collaborative efforts with Law Enforcement Agencies to detect illicit drugs, undeclared cash and other commercial frauds;
4. Ensuring that all entries are paid on ASYCUDA BEFORE they are released to importers (excluding account holders and other exceptional cases), securing timely collection of revenues;
5. Tracking storage days at the Transit Sheds and facilitate timely transfer of cargos to Customs warehouses, as necessary, securing the accrual of warehouse rents;
6. Eliminating unnecessary arrears on the ASYCUDA system;
7. Conducting of Collector’s inspections on development orders, and end use verifications on concessions granted, to detect revenue leakages and collect additional revenue for;
8. Conducting internal systems review to ensure that the Customs legislation and SOP’s are adhered to, which will lead to proper revenue collections;
9. Scanning of baggage and cargo to detect revenue offences;
10. Conducting quarterly engagement with Brokers to promote voluntary compliance with customs tariff as it relates to classification, leading to collection of the correct revenue.

Mr. Speaker in addition to the above, the Customs Department has recently completed the evaluations process for their canines, and baggage scanners, which was approved by my Government in the last year’s Budget. I am happy to report that they will now have the use of these additional resources to assist in their very important border security role, which by extension extends to the protection of our society. Mr. Speaker, the public would recall that recently we launched a National Security Strategy, which among other aspects would see the merger of the Customs and Immigration Departments into a Border Force, as well as the establishment of a 24-hour marine patrol, to better police our borders. Mr. Speaker this is all in line with my governments plans on enhancing National Security and the protection of the residents of the Turks and Caicos Islands.

Mr. Speaker I would like to report that the Home Owner’s Policy implemented by my Government on the 1st of April 2019, which included exemptions in Import Duty has in fact seen great uptake. As at the 31st of March 2020, the total revenue foregone through the exemptions totalled $ 61, 638.17. Mr. Speaker I hereby encourage all interested and qualified residents to apply for the benefits under this policy.

Mr. Speaker $19,000 was reallocated from the Ministry of Finance to the Customs Department’s Operational Expenditure. This has been apportioned across various accounts to effect a rigorous training plan designed to further build capacity with a view to greater efficiency in enforcement techniques.

Mr. Speaker in this Capital Budget, that is FY 2020/21, my Government has approved $300,000 for the purchase of furniture for the new Customs office space. We will continue to invest in the Department and we will be expecting to see tangible returns on our investment.

Mr Speaker, I am happy to report that scanners have been included in this Budget as a priority project and at the earliest opportunity this investment will be made.

COMPUTER UNIT

Mr Speaker, the CITU invested in a Modular container for the Datacenter in Grand Turk. The benefits of this are as follows; the container is:

• Spatially elastic: These containers can be housed in a warehouse or placed outside alongside an existing future office proposed for CITU. This was procured rather than retrofitting or rebuilding rooms in facilities to house the computer equipment, electrical and mechanical infrastructure, and network.
• Highly secure: The container itself is a highly secure solution. Built of steel, it can withstand threats ranging from vandalism and tampering to wind and debris. We are also considering additional concrete structure to be constructed around the unit.
• Custom built: The modular containerized Datacenter fully customized. The electrical and mechanical infrastructure are sized directly to the computing application, resulting in higher efficiencies and lower Power Usage Effectiveness.
• Highly portable: This solution allows for CITU to deploy according to its computing needs and redeploy elsewhere if computing needs change. For example, when CITU’s offices at the Datacenter was destroyed during the past hurricanes, a complex and nerve-racking move of server, storage, and network equipment from the old facility and relocated to a temporary location; with this solution the entire Datacenter unit can literally be picked up and moved to a new location with no separate moves of internal equipment.

E-Government Portal

My Government is committed to modernising services offered by TCIG through online platforms.

The purpose is to make government services more accessible online and reduce the cost of accessing those services, streamline administrative processes, improve turnaround times and strengthen accountability and responsiveness. A post has been created under the Office of the Deputy Governor this financial year to move the E-Governance Program forward.

Even ahead of this major program launch, CITU has the following service delivery projects scheduled:

• Digitization of Registration and Citizenship Office. This will have all records within this office to be captured in a secure digital format and transition to a paperless processing of application services provided by this department. Applications such as, birth certificates, death certificates, and marriage licenses.
• Business license application/payment: – scheduled for May 2020 testing has slowed due to the current pandemic. However internal testing continues by Revenue staff and a tentative end May rescheduled go live date has been set. On completion of this online payment will then as a phase two be extended to other departments.

TCIG’s Existing and developing systems using Cloud.

Finally, Mr Speaker, CITU continues to invest in cloud computing and is now developing a full cloud architecture to have a comprehensive solution for our existing hosted applications and all other builds to come. This strategically built cloud environment will allow for better management and reporting and will give CITU the ability to determine a total cost ownership of TCIG IT systems and resources.

Exchange of Information Unit

In these unprecedented times of global economic uncertainty brought on by this COVID – 19 pandemic, exchange of information for tax transparency will have a greater significance place on it as governments seek to do more for fiscal balancing and collections. Governments will pay greater attention to closing the gaps and minimize the leakage of lost income generated by highly sophisticated investment offshore schemes with a view to bringing taxable revenues onshore.

Exchange of information for tax transparency purposes mandated by the G20 recommendations to the OECD will see the expansion and greater enforcement of the automatic exchange of information of financial accounts data with increasing number of jurisdictions participating. This will be supported by changes in the tax schemas to include additional data on multinationals removing the corporate veil on beneficial ownership down to natural persons.

TCIG existing Automatic Exchange Network which includes CRS- Common Reporting Standard, EOIR – Exchange of Information on Request, FATCA – Foreign Accounts Tax Compliance Act, will see the addition of two new automatic exchange initiatives such as CbCR – Country by Country reporting, Economic Substance reporting resulting from the EU blacklisting assessment of non-cooperative jurisdictions. Evaluation and effectiveness of TCIG Automatic Exchange of Information reporting regimes will continue be an ongoing exercise and cooperation from the industry is essential. As all of the exchange of information reporting networks are subject to a Peer Review Assessment, Turks and Caicos Islands is schedule for a Peer Review Assessment in late 2020 on the AEOI standard – Automatic Exchange of Information for CRS reporting. Reporting Financial Institutions are advised to continue submitting their annual automatic exchange of information financial accounts report in accordance with their statutory obligation and be prepared for onsite examinations.

Compliance with international standards on automatic exchange of financial data is ongoing. The Exchange of information Unit will be procuring and installing a new and enhanced AEOI Reporting Tool in this financial year to facilitate the collection and reporting of economic substance data, and country by country information as part of the additional Inclusive Framework Base Erosion and Profit Shifting reporting requirements. In Financial Year roughly $80k would be invested in this reporting tool. It should be noted that all Reporting Financial Institutions will be required to re-register and a training schedule published for all Reporting Financial Institutions and related stakeholders.

Reporting Financial Institutions must visit the Exchange of Information webpage and AEOI Portal on the Turks and Caicos Islands website regularly for updates. The Exchange of Information Unit will continue to build capacity and published guidance notes to assist the industry with domestic and international Automatic Exchange of Information compliance matters.

STATUTORY BODIES UNDER THE MINISTRY OF FINANCE

Mr. Speaker, I now turn our attention to the Statutory Bodies that fall under the Ministry of Finance.

National Health Insurance Board

The NHIB which manages the Treatment Abroad Program along with the TCIG, continues to explore options and implement initiatives to increase revenue generation and reduce expenditure thereby enhancing stability and creating fiscal space for health in TCI.  During FY 19/20 the NHIP faced challenges and had some success with these endeavors, many of which are still ongoing.

There has been a significant increase in registration and utilisation of the NHIP since inception with <24,000 beneficiaries; increasing to 36,973 beneficiaries as of 31 March 2020 (FY19/20). Indeed, this reflects net increase of 2,276 persons (8%) during FY19/20, with a similar (9%) increase in the number of employers characterized as active at the end of FY 19/20.  There is also marked consistency in the monthly distribution of registrants among categories with the private sector accounting and dependents accounting for about a half (55%) and a quarter (26%), respectively. 

Twelve (12) new positions were filled during FY 2019/20. The Case Management Team, now strengthened with four nurse case managers, has increased clinical oversight of clients being treated abroad (TAP patients). Additionally, Managed Care Clinical guidelines have been procured to enable them to monitor the quality of care being received by clients while overseas. Telemedicine is increasingly being used for teleconferences and remote consultations among patient care teams/physicians at TCI Hospital, the TAP Provider Network and NHIP’s Case Management Team. I have found in this FY, this to be very helpful and is expected to be expanded so, despite travel restrictions related to the COVID-19 pandemic, NHIP’s valued beneficiaries can continue to receive necessary specialist attention.

During FY 2019/20, there was a marked increase (24%) in the number of in-country/local health care service provider encounters by NHIP beneficiaries, compared to FY 2018/19 and is expected to increase further as a result of COVID-19. This increase is also reflected in part in the 6% increase in average monthly pharmaceutical costs, as well as increases in the number of interisland transfers such as ferries, commercial flights and charters for beneficiaries to access care, primarily in Providenciales. 

Whereas overall there was a 22% decrease in the number of overseas referrals, the bulk of the decrease was in the number of follow-up/repeat overseas referrals, which was almost cut in half (decreased by 40%). This is due largely to enhanced scrutiny, via TCI Hospital, of overseas provider requests for repeat referrals and “onboarding” of some cardiology and ophthalmology services, which are provided at TCI Hospital sites by visiting consultants, during FY 19/20 compared to FY 18/19. Data collection is ongoing to monitor these trends and support ongoing efforts to expand onboarding of services in FY 20/21. Efforts to onboard services, though are adversely affected by the COVID-19 pandemic are expected to resume as soon as is feasible.

There was a relatively modest decrease (10%) in the number of emergency referrals of patients/beneficiaries primarily requiring tertiary /catastrophic care during this period and had to be transferred overseas via medivac.  Even so, there was a 16% increase in the average cost of an overseas referral. This is consistent with the global increase in health care costs and the severity/complexity of the referrals, primarily the emergency referrals.

The revenue collected (excluding subventions from TCIG and NIB Employment Injury) for FY 19/20 of $35.2 M reflected a modest increase of 3.8% compared to FY 18/19. During the April 2019 – February 2020, the Compliance Department completed 2,508 assessments valued at $5.13M of which $1.48M has been collected. The Department has been recently strengthened (Feb 2020) with the hiring of a Compliance Manager.  A comprehensive action plan has been presented to the Board which focuses on the following areas: Clean-up, Collections, Collaborative efforts with NIB, and Strengthening the Compliance Unit. The field efforts, training of officers/capacity building and targeted interventions aimed at reducing payment delinquency and enhancing collection of outstanding contributions, which are integral to the success of this plan are underway and will be accelerated. NHIB continues to explore options to better enable calculators to be submitted electronically and the collections of funds from online platforms, such as via our website, online banking, and through direct deposits at the bank.

Other critical initiatives budgeted for FY20/21 include: (1) Development of a Three (3) Year Strategic Plan, through a professional consultation process and stakeholders’ inputs, to benchmark programs/services indicators to monitor and evaluate sustainability and optimal functioning of NHIP. (2) Engagement of Actuarial Consultant(s) to conduct an Actuarial Review of NHIB for the period 2018-2020 and a critical Plan Design/Benefits Review. (3) Ongoing development and strengthening of the Information Technology (IT) Infrastructure/System. This includes staff acquisition, Health Information Management Systems (HIMS), revenue collection, data management, monitoring and evaluation (M&E) to improve efficiency, facilitate evidence-based decision making, and optimise health outcomes and to comply with the recently concluded Information Systems/Applications Documentation Exercise for Statutory and Constitutional Bodies conducted by the Office of the Chief Internal Auditor.

In summary, the NHIP has overcome many challenges and has had some notable successes in furtherance of its mission to attain sustainable financing of quality health care to optimise health outcomes in TCI during FY 19/20. It is anticipated, however, that the global COVID-19 Pandemic, will directly and indirectly adversely impact global economies, especially tourism and hospitality dependent economies such as TCI. Hence, new challenges to health services delivery locally and particularly the access to and cost of care within our treatment abroad Provider Services Network are forthcoming and will add complexity and most likely negatively impact initiatives aimed at creating fiscal space for health to ensure the viability and sustainability of the NHIP in TCI as FY 20/21 is ushered in. The unwavering commitment of the NHIB to explore innovative options to overcome these challenges and provide sustained access to health care to optimize the health outcomes of NHIP’s valued beneficiaries remains undeterred. 

National Insurance Board

Mr. Speaker, the National Insurance Board budgeted a total of $22.8M this fiscal year for the payment of Benefits, and forecasts an income of $32.6M down from $45M in the pre-COVID 19 estimates.

Operational Achievements and Plans

Mr. Speaker, I am pleased to report that the National Insurance Board made strides in several areas of its operations during the 2019/20 fiscal year. They are as follows:

• It adopted its new governance manual and a risk management framework during this past year.
• It commenced efforts to increase the number of benefits paid by direct deposits. Alternative means of payment are being explored for persons without bank accounts.
• It furthered along its new web portal initiative and expect to roll out its new web portal in the first quarter of 2020/21. The portal will allow contributors to submit their monthly contribution statements electronically. Customers would also be able to pay contributions online via their Scotiabank and CIBC First Caribbean International Bank’s bill pay product.
• The Board commenced the publication of summaries of all board meetings on its website, thereby allowing for greater transparency into the operations of the Board.

Mr. Speaker, the Board is working towards the publication of the Invitation to Tender (ITT) for a new computer system. The new system is expected to modernize the way the Institution conducts business. The NIB will proceed with this critical capital investment despite the projected reduction in contribution income.

Actuarial Review

Mr. Speaker, last year as I laid the Fund’s latest Actuarial Review, I offered a few remarks and I do again as we look at the health of the Fund.

The Fund’s latest Actuarial Review was conducted as at March 31st, 2019. The objective of such an exercise is to determine whether the National Insurance Fund is financially sound and to assess the adequacy of the current contribution rate for the Plan’s projected expenditures.

Based on the current NIS design structure and parameters, the NIS is projected to have sufficient reserves to support the current projected expenditures for another 29 years. Nevertheless, to limit the depletion of future reserves and to ensure the continued financial sustainability of the NIS, parametric reform is recommended within the next 2 to 5 years. The reform may entail contribution rate and/or pension design reform.

In the face of a growing funded deficit, a contribution rate increase is not only imminent, it is perhaps the responsible action to take to safeguard the longevity of the fund, and the people it protects.

The Turks and Caicos Islands, is experiencing what is typical in maturing social security programs.  The longer the plan is in existence, the greater the number of eligible beneficiaries and the higher the pension rates payable to those pensioners. Additionally, the TCI, like the rest of the world, is also beginning to see increases in early pensions due to increased incidences of Non communicable diseases (NCDs). 

The reserves of the NIB as at March 31, 2019 stood at $282M.  The plan is 41% funded with an unfunded actuarial liability exceeding $390M, up from $297M in 2016. A 41% funded status means the NIB has 41 cents towards each $1 of accrued pension liability.

The NIB has been in existence for over 28 years and the actuarial review is proposing a contribution rate increase for the first time.  Over the almost three decades, the National Insurance Board has awarded significant increases in pensions and other benefits.

In order to ensure the continued financial sustainability of the National Insurance Fund, and to seek to balance the intergenerational financial burden of providing an adequate range and level of benefits, across generations at an equitable rate; a combination of contribution and benefit reform was recommended in the 9th Actuarial Report.

Contribution income is projected to cover expenses until 2027, which is less than a decade away.

During the years 2028 to 2036, provided no reform measures are adopted by the plan, investment income will have to supplement contribution income to meet the fund expenses; and the accumulation of reserves will be at a slower pace.

A cash flow deficit is projected by 2037, and the fund fully depleted by 2049.

While some of these dates may seem far in the future, in less than a decade, the contribution income alone will no longer be sufficient to meet the Board’s expenses. In less than 20 years we will need to draw on our investment income to cover costs; and within the next 3 decades the fund will be exhausted, if no action is taken

The Actuary strongly recommended in the 9th Actuarial Review that parameters be changed and consideration of these changes be given top priority by the decision makers to take effect no later than April 1, 2021.

The primary recommendation is to increase the contribution rate; and/or decrease the pension benefit accrual rate.

If a reduction in the benefit accrual rate is adopted, it is recommended that persons within 10 years of the normal retirement age be grandfathered i.e. those within that period will receive a pension based on the current benefit formula; otherwise, the proposed new benefit formula will be applied.

An early decision allows sufficient time for stakeholders to make the necessary adjustments and allow for the timely adoption of the contribution rate increase(s) and/or reduction in the retirement benefit accrual rate.

• Additional Changes Under Consideration are as follows:
• Increasing the minimum contributions weeks from 150 to 300 for an Invalidity Pension.
• Increase the pensionable age to 70 from 68 years for the Non Contributory Old Age Pension.
• Increase pension rate for individuals opting to retire after age 65. 

Mr. Speaker, the progression of the TCI National Insurance fund is consistent with what is expected from a system of this design. The long term financial viability of the fund is our paramount priority, and we are committed to working towards that outcome. It is therefore imperative that the necessary amendments are adopted as prescribed within the recommended timeframe. This will ensure that the fund continues to remain viable into perpetuity for future generations.

It is worthwhile to note that without reform the burden is placed on the investment program to support the sustainability of the system and that given the markets are in the late phase of the economic cycle, progressing quickly into a recession, the longevity of the fund will depend to a greater degree on pension reform measures.

Unemployment Benefit

Mr. Speaker, I take this opportunity to report on works that I had commissioned to be carried out concerning an unemployment benefit. The National Insurance Board of Directors commissioned an updated version of an actuarial report on the feasibility of the introduction of Unemployment Insurance in January 2018. Mr. Speaker, the Board considered the report and forwarded it to me as Minister in April 2018. I then directed requested further that the NIB consult with the public about the introduction of the unemployment benefit and the associated rate increase. Mr. Speaker, Management conducted a series of town hall meetings throughout the islands between March and April 2019. The NIB held meetings on the islands of Salt Cay, North Caicos, South Caicos, Grand Turk, and Providenciales. A total of 80 persons attended those meetings. Mr. Speaker, surveys were conducted at those meetings and on the NIB’s various social media outlets. The survey results from the town hall meetings were as follows:  

• Forty-nine percent (49%) of the respondents agreed on the introduction of the unemployment benefit, while thirty-nine percent (39%) disagreed and 12% were neutral.
• Fifty-two percent (52%) of the respondents agreed that the contribution rate should be increased if the unemployment benefit was introduced.
• It is important to note that the persons opposing the rate increased objected primarily because they thought NIB was paying out too much money (benefits) overseas. They felt that if the NIB discontinued the payments, there would be no need for an increase in the rate.

The most recent annual customer survey conducted in December 2019 also indicated that the unemployment benefit was the most requested new benefit named by the respondents, contributors and beneficiary participants in the survey from across the Turks & Caicos Island chain.

Generally, Mr. Speaker, there appears to be a fairly strong support for the introduction of an unemployment benefit. Management has repeatedly impressed upon audiences, the need to increase the contribution rate to fund the new benefit.

The number of persons directly engaged by the NIB was less than three hundred (300) between the town hall meetings, online surveys and small group presentations. My Government is committed to reengaging on the introduction of an employment benefit and Mr. Speaker I believe that there will be a change of heart among those we consult.

Invest TCI

Mr. Speaker, I turn our attention to the investment arm of Government; that is the Invest TC Agency.

Mr. Speaker, the focus of the Agency remains to attract foreign investment, encourage repeat or new domestic investment, in projects large and small, and encourage the growth of medium, small and micro enterprises through cash grants and policy support. As a result of prior years’ activity, the Agency has encouraged the development of over $500 million in new hospitality projects that are now under construction, which when complete will add 758 new short-term units to TCI’s tourism inventory.

In FY2019-20, the Agency undertook three streams of promotion nationally and internationally. Focusing less on the hospitality industry investors and more on high net-worth investors, the Agency attended conferences in Europe and the Americas to spread the word about Turks and Caicos as an investment-worthy destination to all types of investors. Following up on prior year initiatives, the Agency attended events for and promoted the Financial Services sector at specialist conferences in the US, the Caribbean and the UK, one of which resulted in a BBC interview that was syndicated to over 30 countries, including Asia Broadcasting and PBS in the United States. Domestically, the Agency held the Annual Conference in October 2019, with the theme being the potential for growth in the Financial Services Sector in TCI, which was well received by attendees and launched the Premier’s Financial Services promotion strategy.

The results for FY2019-20 were consistent with prior years’ efforts and built on a solid foundation of new large projects and extensive involvement in growing small and micro businesses in TCI. The large projects which received development agreements represented about $387 million in new investments, plus the Refurbishment Program encouraged an additional $173 million in hospitality refurbishment. The MSME program approved twenty-seven (27) new projects, the majority of which were in the family islands with Grand Turk having eleven (11) of the new businesses.

Going into the next fiscal year, the Agency is negotiating three development agreements, has an additional two waiting for final Cabinet approval, with a combined investment value of approximately $360 million. A further four projects carry over from FY2019-20, potentially representing another $290 million in investments. The foregoing includes cruise terminals, an airport re-development in North Caicos and a hotel/resort in Grand Turk.

New initiatives for the coming FY2020-21 fiscal year include a focus on expanding the MSME program through an office in Grand Turk, making the program more accessible to entrepreneurs in the east of the country.

To diversify the economy, the Agency will officially roll out and promote the Investment Policy Statement externally. The Agency in its current efforts to diversify the economy is working to implement a new Marine Industries Strategy with the Ministry of Tourism, to encourage investment in marinas, marine services industries, and the creation of high value-added jobs. The other industrial diversification currently ongoing at the Agency is the attraction of medical industry investors, for both medical tourism and medical support services on-islands. The Agency continues to work with the Premier’s financial services working group to promote TCI as an alternate center for the basing of financial services companies, and to promote the job opportunities and skills development that the financial services industry can bring to TCI. There will be a renewed focused and sustained promotion of the areas of technology, fishing and farming.

With the expanded Refurbishment Program funds, the Agency looks forward to working with property owners to improve the fabric and finish of existing structures to help make TCI more competitive in the global tourism industry.

Civil Aviation

The Civil Aviation Authority which also falls under the Ministry of Finance.

During this year, the following are the goals of the CAA:

• Firstly, the CAA will continue its modernization project. The Civil Aviation Authority recently installed an electronic management system which provides a database, and connects all work activity throughout the organisation. The Authority will continue to invest in the system to achieve full utilization and also training of staff. This will further the harmonization and institutionalization of work practices, procedures and processes, lead to greater efficiency, organizational transparency and accountability.
• Secondly, the CAA will continue with capacity building and resilience. The Authority is continuing its capacity/institution building efforts to ensure the ability to fulfill its regulatory obligation and to meet challenges and demands of the local industry and of international accountability. The CAA is expecting to relocate into larger office premises on Providenciales to better support the present functions of the organization and to accommodate additional staff.
• The proliferation of drones poses real challenges in terms of safety of aircraft operations in and out of our airports and the lower airspace. This requires measures to regulate in order to ensure safety of the travelling public. In keeping abreast of safety enforcement measures and regulatory best practices, the CAA aims to enhance safety oversight, as well as training and education of users. This would enable the safe and responsible use of valuable technology by residents and visitors alike, for both leisure and entrepreneurial purposes, and would also be a source of revenue for the CAA.

Finally, in the longer term, the Authority is looking forward to two initiatives: namely, (a) facilitating the establishment of a local flight school, and (b) the launching/operation of an overseas aircraft and aircraft engine mortgage register. Plans continue towards the realization of these goals.

The Development of Ports in the TCI

Mr. Speaker I am extremely proud of my Government’s achievement in the area of port development: be is air or sea ports. These are among some of my Government’s proudest achievements.

Ports Authority

Mr. Speaker, I turn our attention to the Ports Authority.

Mr. Speaker the Ports Authority were able to achieve the following operational goals:

1.            All outstanding financial audits were completed.

2.            For the first time an annual report was published.

3.            A new strategic plan (2019/20 – 2022/23) was approved.

4.            A ports stakeholder’s committee was formally established.

5.            Mr. Speaker, revised staff policies and procedures were approved; and

6.            A port security operation manual was also approved this year. 

I turn our attention now to the major infrastructural achievements

Mr. Speaker, to improve the staff working environment, new security gatehouses were opened on Grand Turk and Providenciales. 

Mr. Speaker, ten (10) capital projects were tendered during the year. With the expectation of the CCTV project, all post-hurricane projects were successfully implemented. Other important projects progressed during the year included:

Tendering for installation of an electronic port management system to replace the current manual system.

An investment of just under $150,000.00, with financial assistance from the United Kingdom’s Maritime and Coastal Agency, to procure vital oil spill containment equipment for all ports.

Opening of Grand Turk Ro/Ro Ramp in December 2019, restoring a vital shipping link between Grand Turk and Salt Cay which was closed since 2015.

Substantial completion of Grand Turk container yard pavement once this is done, Grand Turk will be fully compliant with national and international standard – the first time in long time Government has been able to achieve this.

Mr. Speaker, the appraisal for redevelopment and modernization of South Dock, Provo progressed to a stage where application for detailed planning permission was made in August 2019. This budget reflects an agreement whereby the Government would fund this project from its Capital Budget.  This budget includes $32 million funding towards an investment of approximately $43 million over the next 3 to 4 years to build a modern port on Providenciales. The decision by my Government to fund this project negates the need to approve borrowing by the Ports Authority. Mr. Speaker, barring completion of a few technical studies, phase 1 of this project, which is the construction of a new berth and container yard should commence during the second half of the financial year.

Mr. Speaker, the redevelopment and modernization of South Dock, Providenciales is long overdue. It has been on the drawing board for over two decades. The result in a situation where the port has reached the end of its cycle and runs the risks of becoming a bottleneck to development of the TCI, and Providenciales in particular. I very pleased, therefore on my Government’s plans for redevelopment of essential national infrastructure asset.  

Airports Authority

Mr. Speaker, The Airports Authority while recognizing the immediate challenges faced by the impact of the COVID-19 virus, understands the importance of continuing with the essential and critical infrastructure, systems and human resources development necessary to facilitate robust recovery.

The following are but highlights of projects and actions deemed essential in facilitating and appropriately supporting a managed and sustainable recovery and economic growth:

The Airports Authority continue in this year to enjoy great successes in its ambitious capital program and each island is being addressed under this program.

Mr. Speaker, I addressed the achievements by islands:

Salt Cay Airport: The full refurbishment of the airport on Salt Cay is practically completed; inclusive of runway, apron, terminal building and a new fire vehicle. This allows aircraft as large as the Twin-otter to fly into Salt Cay. This facilitated a better passenger experience, increase in numbers, and over all stimulate economic development.

Grand Turk: the practical completion of the Grand Turk fence has resulted in the lifting of the restriction, returning the airport to full day and night operations. This, coupled with the new fire hall which is under construction, and the scheduled replacement/addition of fire vehicles, will place Grand Turk in a better position to be more attractive to international flight operations. Mr Speaker, I am pleased to say that all works on the fence is concluded and was conducted by residents of Grand Turk. This is circa $499,120.27

Providenciales: the airport remains the main revenue generating center for the Airports Authority as our “main gateway”, by air. While we are forecasting/experiencing a significant decline in passenger numbers, in the immediate to short term, we expect, with combined and collaborative marketing efforts to experience a positive robust and sustainable recovery, and year on year growth.  It is therefore important to be well positioned, with necessary infrastructure and resources to embrace this.

To this end below is a summary of what the Airports Authority is doing in Providenciales.

In collaboration with the FAA, the Airports Authority is working to construct and equip a communication center that will enhance air traffic communications.

Successfully tendered, and awarded the contract for the construction of a very much needed office block for the Airports Authority.  The existing is literally falling down around them.  Staff well-being is important and my Government has improved a $3.5M investment for this.

Successfully tendered the design build of a new control tower and combined services building (fire hall), to replace a failing and not fully compliant facility.

As it relates to the existing terminal, based on our increase in flights and passengers and the forecast increase in demand, we have outgrown it. My Government has secured the approval of Cabinet to move to the next step to begin works toward a new terminal. The Airports Authority has since engaged an independent consultant to advise on the most preferred option to adopt for the imminent expansion of the Providenciales International Airport facility as guided by the master plan. We expect to have that report by July, 2020 and a new terminal for Providenciales is on the way.

On South Caicos, phase three of the airport rehabilitation has been successfully tendered and awarded. This comprises of the construction of the terminal building and combine services building (fire hall) at an investment of $10m. This will encourage economic growth, and with the removal of the restriction, it will fully open up South Caicos to direct international flights. This project is scheduled to take 18 months.

On North Caicos, discussions are ongoing in collaboration with Invest TCI with investors who have proposed engaging in a joint venture to develop the North Caicos airport. The development of this airport is deemed essential to the latent development of the North Caicos economy.

On Middle Caicos, the Airports Authority is work together with an NGO (concerned citizens group) of Middle Caicos to restore the terminal building into a tourist attraction.

As it related to fire vehicles, it is vital that all support services are adequately equipped to fully support the airport operations. To this end, we have embarked on a fire vehicle replacement program. The first was delivered to South Caicos; the second to Salt Cay; with three more to be delivered this year, and shipped already. This will enable us to relocate other vehicles to areas that needs them, like North Caicos and to increase the redundancies in Grand Turk, South Caicos and Providenciales. Most of our fire vehicles are well over 12 to 15 years old. These fire vehicles cost approximately $89,206 each.

The Airports Authority continue to offer both in house and overseas training to staff. The fire officers continue to participate in the annual open fire training in Florida. Air traffic controllers undergo training in the Dominican Republic which is the region’s most advance training school. 

Engaged and independent consultant/firm to conduct a full and comprehensive salary compensation study. The preliminary report is expected to be delivered this month.

Office of the Premier, Local Government and Community Affairs

Budget Contribution

Mr. Speaker I now turn our attention to the Office of the Premier, Local Government and Community Affairs.

Constitution

Mr. Speaker, the constitutional changes remained a priority for my Government this past year and great strides.

Mr. Speaker, my Government jointly with the Leader of the Opposition announced the appointment of a Constitutional Review Committee which was formed to conduct consultations throughout the islands on proposed constitutional changes.  The remit of the Committee was to:

• Reintroduce the public to its current proposals before the UK
• Educate on areas of proposed new submissions
• Receive recommendations

I pause here to say thank you again to the team or persons who conducted this review, led by the Honourable Attorney General and we are grateful for your service in this area.

Mr. Speaker, following the approval of bi-partisan proposals and recommendations, my Government and members of the Official Opposition, including the Leader of the Opposition, agreed to travel to London to present the constitutional findings to the Foreign and Commonwealth Office (FCO) in March 2020 on behalf of the people of the Turks and Caicos Islands. Mr. Speaker, due to the current pandemic, we were forced to postpone our travel to London. However, Mr. Speaker, we do look forward to reconvening such discussions with the FCO and will seek out the possibility of holding a virtual meeting given the importance of this matter and the challenges that the COVID-19 pandemic brings to travel in the foreseeable future.

Community Enhancement Program

Mr. Speaker in 2019, I made a decision to change the name “Office of the Premier and District Administration” to “Office of the Premier, Local Government and Community Affairs”. The decision was made to ensure that my office, and by extension the Government, became more integrated through community programs and activities. As such Mr. Speaker, through our frequent town hall meetings and consultations, our communities made a clarion call for beautification and enhancement projects. As a Government who listens to the people, my Government delivered. Mr. Speaker, you would be happy to know that my Government under the Office of the Premier invested well over $600,000 in community and enhancement projects throughout the Turks and Caicos Islands. Mr. Speaker, this trend will continue into the new financial year as my Government believes that partnership with the community is key to development once we ensure that Turks and Caicos Islanders are the drivers to these developments. Mr. Speaker, allow me to mention just a few of the key community enhancement projects:

In Grand Turk: Mr. Speaker, as you drive down Pond Street, you will observe a number of projects taking place. Why? Because my Government on coming into office was given a mandate by the people to engage in beautification and enhancement programs that would uplift the aesthetics of the Nation’s Capital – Grand Turk. Mr. Speaker, as a Government that listens, we delivered.

Mr. Speaker, these projects include re-construction and painting of walls along Pond Street and beautification of the Salt Pond Salinas [Mr. Speaker, what you saw on Pond Street is just the beginning].  Mr. Speaker, you will also witness in the next few weeks the erection of a ‘Welcome to Grand Turk’ lettering sign, construction of a windmill in the Salt Ponds, erection of a JAGS McCartney statue and a retainer wall to avoid the Salt Pond from entering the roadway adjacent to the Clock Tower. Mr. Speaker, in addition to the completed and pending projects, Grand Turk will experience a newly renovated Crab Tree Corner Park, renovations to the Emancipation Square and comfortable benches on Governor’s Beach among other projects. Mr. Speaker, most importantly, may I say, that our people, Turks and Caicos Islanders have been and will continue to be the beneficiaries of ALL projects.

In South Caicos: Mr. Speaker, District Administration had an annual budget of $294,974 for the year 2019/20. Of this amount, $89,555 was allocated to civil servants’ employment cost and the balance of $205,419 as operating cost. $128,000 of this $205,419 was allocated to maintenance of: the cemetery ($8,000), roads and drains ($25,000), schools ($10,000), government buildings ($20,000), street cleaning ($50,000) and beautification projects ($20,000). Works for District Administration during the financial year 2019/20 were done through petty contracts. Mr. Speaker, this is employment creation.

Mr. Speaker, a total of fifty-six (56) contracts were awarded in the areas of street cleaning, drain maintenance, and cemetery cleaning. These include six (6) cemetery cleaning, thirty-nine (39) street cleaning and eleven (11) drain cleaning and repairs. Major drain works included repairs to the drains on North Street and two drains on Stubbs Road, as well as the cleaning of the Turtle Crawl. There were also partnerships with Environmental Health Department, Public Works Department and District Administration, where trucking was provided to assist with the cleaning of six (6) nuisance properties.

Mr. Speaker, three (3) beautification projects were done: the installation of a welcome sign, the restoration of the Cow House and the installation of street naming signs. Mr. Speaker, the Cow House building was repaired and restored (at best) to its original appearance. A total of sixty-five (65) street naming signs were erected throughout the southern community of South Caicos under the community enhancement program led by the Office of the Premier.

Ongoing Works and New Initiatives for 2020/21

• The works which started on the Cow House on South Caicos will continue in Phase 2 which will see fencing and information signs about its history erected. Efforts will continue to clean up the Conch Ground Bay area including the land side.
• In addition to the street naming signs, there are plans to erect road safety signs throughout the island and repaint road markers on the roads, such as “SLOW” and “STOP’.
• Ongoing street cleaning, roads and drain maintenance, maintenance of cemetery, and maintenance of schools and government buildings are also part of the plans for the upcoming year and will be placed under a new management structure that will support my Government’s objective to stimulating the island’s economy.
• Mr. Speaker, within the new financial year, my Government will be exploring a works program for residents in the fishing industry and identify strategies by which we can stimulate our fishing industry.

It is expected that these projects will continue to create employment for the populace. Mr. Speaker, we continue to observe an upward trend in the number of requests for business licenses from the island of South Caicos which speaks volumes to my Government’s commitment to ensure that residents are given employment opportunities. Mr. Speaker, most importantly, may I say, that our people, Turks and Caicos Islanders, have been and will continue to be the beneficiaries of ALL projects.

In North Caicos: The Office of the Premier in collaboration with District Administration and District Board will be focusing on beautifying the island, promoting island pride, showcasing the myriad of talents, while fostering a climate of entrepreneurs/employees for our people. Mr. Speaker, through the community enhancement program, my Government was able to engage residents from each of the four (4) settlements to perform maintenance on government buildings and other properties. This, Mr. Speaker, contributes to more residents acquiring business licenses to become employed and a part of this program. It also fosters island pride.

Mr. Speaker, under the community enhancement program, my office has launched several Island beautification projects. Notably, we have built a gazebo in the settlement of Kew and will build gazebos and benches in parks and erect children’s play equipment in Bottle Creek and Hollywood Park in Whitby. Mr. Speaker, my Government has already purchased recreational equipment for the mentioned parks.

Mr. Speaker, my Government will also be erecting street signs, naming each settlement and will be completing and beautifying parks in all communities. Mr. Speaker, my Government initiated a facelift to the Kew basketball court by the painting the court and adding restrooms because the youth of North Caicos deserve nothing less. Mr. Speaker, notably, my Government has injected $120,000 in North Caicos under the community enhancement project through petty contracts. Mr. Speaker, most importantly, may I say, that our people, Turks and Caicos Islanders have been and will continue to be the beneficiaries of ALL projects.

In Middle Caicos: Mr. Speaker, there has been an increase in business licenses resulting from an increase in contract work available on the island. However, this past year, our focus was to increase community engagement. Mr. Speaker, this was fostered by hosting community events; which brought more than two hundred and fifty (250) individuals to the community of Lorimers.

Mr. Speaker, there has been major enhancement projects on the island of Middle Caicos; one being the upgrade to the facilities at Bambara Beach. These upgrades included stalls being equipped with both indoor and outdoor power outlets and light fixtures. Vendors can also now use the facilities in the evening hours due to proper access of lighting. A second phase of upgrade is planned for the restroom facilities at Bambara Beach.

Mr. Speaker, due to the event which occurred on Bambara Beach resulting in the loss of lives, additions were made to aid in preventing such unfortunate occurrences from transpiring in the future. Signs were erected at the entrance and along the shorelines advising the public of possible rip currents and safety cautions.

Mr. Speaker, within this financial year, my office, under District Administration will focus on the creation of community gardens to aid in providing food sources for our residents and provide green spaces to increase the quality of life. This also includes a proposal to build nature observational decks for birdwatching to increase the engagement of visitors and provide more opportunities for locals to showcase the island of Middle Caicos. Mr. Speaker, through these projects, my office has invested some $60,000 in community and enhancement projects. Again Mr. Speaker, most importantly, may I say, that our people, Turks and Caicos Islanders have been and will continue to be the beneficiaries of ALL projects.

In Salt Cay: Mr. Speaker, the little island of Salt Cay can no longer be referred to, in this era, as the island time forgot. Mr. Speaker, given the significant accomplishments by my Government, the community of Salt Cay, visiting guests and others are enjoying, the fact that they are landing on a brand new runway. And very soon Mr. Speaker, the travelling public of Salt Cay on emerging from the aircraft, will enter into a well refurbished terminal building with excellent facilities. Mr.  Speaker, the firemen of Salt Cay are now in possession of a brand new firetruck and they to, will soon be enjoying a well refurbished fire station. Mr. Speaker, Salt Cay cannot be referred to in this era as the Island that time forgot — this is now the era that the People’s Democratic Movement, YOUR PDM Government remembered Salt Cay.

Mr. Speaker, beautification and enhancement of the Island is what my Government is working towards and this will continue during the new financial year, ensuring that Salt Cay maintains its cleanliness; re-establishing garbage bins in strategic areas, erecting the traffic signs, renovating the cabanas and the continuation of refurbishing walls on the main streets. Mr. Speaker, the residents of Salt Cay continue to benefit through petty contracting. Mr. Speaker, in a recent project, my Government was able to engage all business vendors on the islands. Mr. Speaker, again, all registered business vendors were able to benefit from the beautification and enhancement program. My Government through the community enhancement project invested over $50,798 in addition to the mentioned projects under our Capital Program. Mr. Speaker, this Government is not only listening, but delivering.

In Providenciales: Mr. Speaker, within this budget year, the following pending works in Providenciales continue:

• Rebuilding of the Five Cays cemetery wall
• Recreational equipment for Kew Town Park
• Clean up and the erection of benches and children’s playground equipment on Wheeland Park
• A clean up and tree planting project on Bay Road in Blue Hills
• Garbage bins for the Bight
• Children’s park for Long Bay

Mr. Speaker, my office was also able to support the Ministry of Tourism by funding a portion of the Maritime Policy’s Program as well as by purchasing a much needed DJI Matrice 210 drone with thermal camera for the Department of Environment and Coastal Resources (DECR) for the purpose of the surveillance of coal kilns as a measure of protecting staff at the DECR and be able to address this nuisance head on. Mr. Speaker, this equipment allows staff to capture an aerial view of affected areas before proceeding into vulnerable areas and before they are ablaze.

Strengthening Citizenship Engagement

Mr. Speaker, my Government under the Office of the Premier, Local Government and Community Affairs will continue strengthening engagement with citizens through a number of community events and a series of town hall meetings aimed at heightening awareness about how key policies and initiatives implemented will affect them. Mr. Speaker, some of the noteworthy community events and engagements held by my office during the past year were:

MOTTAC

Mr. Speaker, on October 26th, 2019, MOTTAC (Musicians of the Turks and Caicos Islands) launched their first Music Festival at the Downtown Ballpark commissioned and sponsored by the Office of the Premier, Local Government and Community Affairs. More than twenty (20) local artists, both solo and groups performed at what will be an annual event. Mr. Speaker, Turks and Caicos Islands and visitors alike were completely blown away by the production quality and showmanship of the MOTTAC Music Festival and all the entertainers who performed. Mr. Speaker, this event only demonstrated and brought to light the true caliber of talent we have across all areas of entertainment in the Turks and Caicos Islands. My Government will continue its mandate to provide a platform where TCI’s talented musicians, entertainers and production technicians can showcase their various gifts. Mr. Speaker, you can also look forward to a Gospel Festival that was scheduled for January this year but will be held later this year; the plans will be announced shortly.

Local Government

Mr. Speaker, my Government is committed to accelerating its mandate in ensuring that our Sister Islands receive stronger representation and that essential services are available on island and are easily accessible.

Within this year, Mr. Speaker, my Government as a matter of priority will continue exploring a suitable model for local government with special attention to islands with limited access. Mr. Speaker, this initiative will strengthen and enhance the operation, management and effectiveness of the current district administration. Its formal goal is to review the current structure in light of single constituency and all-island elected representatives, and to review other regional models.

Mr. Speaker, I am in receipt of the first report which categorically states that residents on all islands are overwhelmingly in support of greater representation and it is my Government’s intentions to deliver on the promise of greater representation in this regard through a new local government model.

Mr. Speaker, my Government will ensure that Turks and Caicos Islanders are empowered to become active participants in the enhancement of the everyday lives of citizenry with the government as its partner. Mr. Speaker, each community will emerge from this process with stronger representation and ownership in growth and development of their respective communities. Under the Professional and Consultancy Programme, my Government will ascertain a consultant to work closely with the Office of the Premier and Local Government to implement the most suitable model necessary. Mr. Speaker, my Government promised stronger representation and my Government is delivering.

Greater Collaboration with CARICOM, Oversees Territories, Canada and ACS

Mr. Speaker, my Government will continue to engage with regional bodies including the CARICOM, United Kingdom Oversees Territories Association (UKOTA), Canada and Association of Caribbean States (ACS). This allows us to have a voice in economic integration and corporation among its members to ensure that: (1) we collectively benefit (2) integration is equitably shared (3) coordinate regional policy. Mr. Speaker, regional integration allows cost sharing and risk pooling to promote stable growth. Mr. Speaker, developing greater cohesiveness with regional bodies also allows us to ascertain technical skills and support from our regional colleagues. Mr. Speaker, in such times of crisis, one cannot discount the value of regional partnership in challenging times and our reliance on regional responsibility.

Mr. Speaker, on March 28, 2006, during the Eleventh (11^th) Ordinary Meeting of the ACS Ministerial Council, in Port-of-Spain, Turks and Caicos Islands entered into an agreement between the ACS to define the modalities of the participation as an Associate Member State. Mr. Speaker, my Government is keen on reinvigorating the process to establish a cooperation between the Association and the TCI, as the TCI can benefit greatly from the work that is undertaken in the areas of disaster risk reduction, transportation, sustainable development, environment and climate change.

Mr. Speaker, with a view of accelerating the process for the involvement of the Turks and Caicos Islands in the ACS, I wrote to the Foreign and Commonwealth Office (FCO) seeking a letter of entrustment and written support as an Associate Membership of the Association of Caribbean States (ACS).

Climate Change

Mr. Speaker, Climate Change is a topic that remains a critical issue in many countries around the world, including small island states like the Turks and Caicos Islands. Mr. Speaker, Climate Change requires urgent action and planning to mitigate the effects felt in the TCI. We must do our part as a Small Island Developing State (SIDS) to ensure that adaptation strategies are implemented. Small, low-lying coastal developing states like the Turks and Caicos Islands are the most vulnerable to global climate change, and accompanying sea level rise. Responding to climate change risks, adaptation is therefore important and demands the attention of all key stakeholders. Mr. Speaker, while Caribbean countries contribute less than 0.1% to Global Greenhouse Gas (GHG) emissions, they will be amongst the earliest and worst adversely affected by Climate Change.

The Office of the Premier, Local Government and Community Affairs later this year led by the Climate Change Committee will be launching its first Climate Change Symposium with the aim of fashioning a cross-government partnership with regards to implementing policies and educating various sectors of society about the current polices and strategies in the TCI. It is also our intention to involve the general public, youth and educational institutions to bring awareness to the adverse effect of Climate Change and further, engender an active involvement in combatting Climate Change strategies. Mr. Speaker, Climate Change is real and my Government will not deny it.

Policy Agenda

Mr. Speaker, I am pleased to say that since coming to Office as Premier, I have received the approval of my Cabinet colleagues for a Central Policy Registry. Mr. Speaker this will aid in consistency and transparency in policies as promised in the Change Document. This pilot project is now being finalized by staff of the Premier’s Office.

Ban on Plastic

Mr. Speaker, as of April 15th 2019, a ban on single-use plastic bags came into effect in the Turks and Caicos Islands. Persons are no longer able to import single-use plastic bags as defined by the Plastic and other Single Use Products (Use and Waste Management) Bill 2019. A total ban subsequently came into effect on May 1st 2019 prohibiting the importation, use, sale and distribution of single-use plastic bags in the Turks and Caicos Islands.

Mr. Speaker, cabinet then approved on May 29th 2019 a Ban on Polystyrenes, a policy paper put forward as part of the ongoing going green for 2019 initiatives to clean up our islands, reduce waste and encourage sustainable alternatives. The policy passed in 2019 to reduce the use and cease the importation of Polystyrene products, Styrofoam cups, plates and plastic straws; those items were officially banned on December 31st 2019. Along with the regulations on the use and importation of single- use plastics, Styrofoam, Polystyrenes and plastic straws, the policies also outline a list of alternatives and reduced tariffs for the importation of those alternative items. Both bans, Mr. Speaker, is part of an all-island phase out of all non-biodegradable plastics. The aim is to reduce waste going to landfill, to reduce land and marine pollution and to reduce the country’s overall contribution to Climate Change. Mr. Speaker, it is the vision of the Turks and Caicos Islands Government and the Climate Change Committee to reduce TCI’s contribution to Global Warming; to reduce the health risks that are connected to the consumption of micro-plastics and other harmful materials and to ensure that the country remains beautiful by nature and clean by choice.

Scrap Medal

Mr. Speaker, Cabinet approved a policy to incentivize the removal of scrap metal from the TCI by charging no cargo fees for a period of 6 months. Mr. Speaker, scrap metal recycling is a business and exporters in the TCI, when this policy passed, would have had the opportunity to tap into this lucrative market. Mr. Speaker, my Government believes that this forward thinking project will decrease the accumulating volume of scrap metal that currently exists in this country. Mr. Speaker, I would have said in subsequent speeches to this House, that the rationale behind the policy was to create a ‘win-win’ situation for both Government and exporters. The public benefits from the removal of unwanted vehicles which can lower community aesthetics and become a breeding ground for mosquitoes and other vectors, while the commercial risks to the exporter are reduced. This is progress. Mr. Speaker, my Government made a commitment through its manifesto to address the environmental concerns while creating business opportunities for local entrepreneurs. Turks and Caicos Islanders will not only have an opportunity to strive but to thrive in the exportation of scrap metal business. My Government has set rates of cargo dues payable during the period of the policy to zero percent for a period of 12 months and has set the rate of security dues payable during the policy period to zero percent for the first six months of the 12-month period.

Brexit

Mr. Speaker, on the departure of the United Kingdom from the European Union on 1 February 2020 the Turks and Caicos ceased to be an Overseas Country and Territory Associated with the European Union under the Overseas Association decision of 2013. The UK’s Withdrawal Agreement with the European Union however, provides that during the transition period, whilst negotiations between the UK and the EU take place on the future relationship, the existing rights of individuals and businesses in the UK Overseas Territories, including the TCI, will not change.

Mr. Speaker, the Turks and Caicos Islands currently benefits from a number of European Union funding streams, in particular the European Development Fund (EDF) and BEST (biodiversity funding). Under the terms of the Withdrawal Agreement, the UK Overseas Territories remain eligible for all programs financed by EDF 11 and the current MFF. Thus, Mr. Speaker the Islands will continue to benefit from EDF 11 and in particular its territorial allocation of 14.6 million euros granted to support the education sector and the additional top-up sum of 2.92 million euros following Hurricanes Irma and Maria in 2017. Mr. Speaker, the Islands will also continue to be eligible to participate in the EDF 11 Caribbean Regional Program on resilience, sustainable energy and marine biodiversity; the EDF 11 Thematic Program focused on renewable energy and climate change; and to bid for funds under the BEST 2.0+ program. 

Mr. Speaker, during the transition period, as part of the negotiations, the UK Government will consider whether to remain party to EU programs such Erasmus Plus and Horizon 2020 to which the Overseas Territories are now also eligible. Where the UK Government decides to continue participating in an EU funded program, we have been assured that consideration will be given to including the Overseas Territories where appropriate. 

Mr. Speaker, negotiations between the UK and the EU have remained ongoing during the coronavirus outbreak with the deadline for reaching an agreement set for the end of the year.  The FCO, DEFRA, DIT and other UK Government departments have continued to engage with us on Brexit issues to ensure that our interests in relation to the future UK-EU relationship are known and considered in the negotiations.

Mr. Speaker, the Turks and Caicos Islands Government remains a full member of the Association of the Overseas Countries and Territories of the EU, ‘OCTA’ and still sits on the Executive Committee of the Association. TCIG, along with the other UK Overseas Territories, are currently exploring with the OCTA Secretariat the best mechanism to ensure continued cooperation on issues of common interest such as Climate Change, Oceans and Sustainable Energy, after the transition period. 

CONCLUSION

Mr. Speaker even after two hurricanes and in the face of the pandemic, we must continue to deliver on key investments; hence the title of this 2020 Budget Address: ‘Behind the Pandemic: Charting the Way Forward’.

Mr. Speaker despite the two (2) storms, my Government will still able to amass savings which enable us to be in a position to fund a Stimulus Package from savings and to keep Government functioning at all critical levels.

So permit me, Mr. Speaker to answer those that say, my Government has done nothing or has saved to the detriment of our people.

Mr. Speaker, permit me a few minutes to recap the last four years in Office.  I want to provide you with the level of investments that we promised and delivered to enhance these beautiful by nature islands:

Good and Prudent Governance

• Mr. Speaker the subventions for the Integrity Commission and Financial intelligence Agency have increased by 88% and 69% respectively over the last 4 years.
• Between 2016-2020, we have granted a whopping 107% increase in allocation to the National Audit Office. My Government takes governance seriously.

National Security

Policing

Mr. Speaker, my government has invested an additional $4.0m, in the Royal Turks and Caicos Islands Police Force, since we took office. Over the past four (4) years, Mr. Speaker we have created over 81 new positions. The Police Force has been increased by 27 percent over the 4 years. The Police also received increments.

My Government has invested heavily in the capital program for the Police and we are not too shy to say that the Police has never before enjoyed such an investment by any Government.

National Security Secretariat and Contingency Force

An initial $1m towards the NSS and towards our own Defense Force in the making.

Investment in Immigration

Mr. Speaker, we have increased the staffing in the Immigration and Employment Services by greater than 30.  But, our investment in the following programs have increased over the four years by:

• Immigration 84%
• Coastal Radar 57%
• Customer Service 55%
• Registration and Citizenship 44%
• Employment and Services 29%

Ministry of Finance

• Established a new department, The Department of Trade
• Bolster the Accountant General’s Department, Statistics, SPPD and Exchange of Information and Customs.

Reduction in Government Debt

Mr. Speaker, Government debt has been reduced by 93 percent.  Mr. Speaker, even though we are weathering the storms relating to the COVID-19, I must advise the financial sector that the Standard and Poor’s in their recent release, whilst downgrading the ratings of many of our Caribbean neighbors have affirmed our sovereign ratings of ‘BBB+/A-2’; Outlook Remains Stable.

Let me quote from the rating agency.

• “We expect Turks and Caicos Islands’ (TCI) GDP and fiscal balances will fall dramatically in 2020, owing to declining tourism because of the imposition of COVID-19-related travel restrictions in visitors’ countries.  Nevertheless, TCI was well positioned before the outbreak, with a strong balance sheet from, years of successive fiscal surpluses, and a low and declining debt burden.
• We are affirming our ‘BBB+/A-2’ long- and short-term sovereign credit ratings on the territory
• And are maintaining the stable outlook”

Established the National Wealth Fund

Mr. Speaker, we are saving for our future generations.  The National Wealth Fund was established and we have accumulated an amount of $26m.

Ministry of Education

Mr. Speaker we have invested heavily in education. We have created 74 new positions over the four (4) years. That is 25% increase in four (4) years. The tertiary education to include the Scholarship Fund has increased by 20% and has seen an increase by $1m over the past four years.

A technical vocational school will be established in September.

Gender Affairs has increased by 35%

Social Services has likewise seen a significant increase in staffing

Ministry of Home Affairs

Mr. Speaker, our investment in the Prison has increased by 259% over the 4 years and the Fire Department by 109%. Road Safety and Water Undertaking have seen a four-year increase of 42% and 35% respectively.

Ministry of Infrastructure

My Government reestablished the Housing Department

Public Works and Maintenance increased by 154%, even though we are rebuilding many of the buildings that was normally under the maintenance program we are still doing major maintenance work.

Project Management has seen an increase of seven (7) staff over the four years. These are specialist years.

Civil Servants

Reinstatement of increments which salary increases for most civil servants.

Reinstatement of terminal benefits.

Ministry of Tourism

DDME has increased by 65% to include 7 additional senior positons

Gaming by 200%

DECR by 80% to include 12 new positions

Coastal Radar 75%

Ministry of Health and Human services

Our investment in healthcare:

NHIP 35% increase – $16m

Primary Health Care – 41%

Health Promotion and Advocacy – 36%

Mental Health and Substance Abuse – 39%

Special Needs 28%

EMS 56%

Public Health Lab 39%

Mr. Speaker our huge investment in sports and agriculture are unmatched.

In total Mr. Speaker, we have created over 300 posts in the public sector.

In 2017, a total of 106 posts: 21 Police, 17 Contract and 68 locals.

In 2018, a total of 121 posts added; less 60 posts deleted and overall movement in the head count of 61: 61 local appointments, 28 non local appointments, 1 Police change; 18 not filled, 8 Assistant Immigration Officers upgraded to Immigration Officers and five (5) trained teachers made up to graduate.

In 2019, a total of 37: 12 local appointments, 17 not yet filled, 5 Police Officers. A supplementary added for an additional twenty (20) for the Police bringing the total new posts to 57.

And in this year, we are introducing another 160 posts.

Mr. Speaker this is a Government that delivers and Mr. Speaker, this is a working Government!

Projects Around the Islands

Over the Past four (4) years, we have spent more than $112.7M in capital investment across the Turks and Caicos Islands.

Mr. Speaker over the past four years, we consistently and deliberately addressed critical infrastructure needs on every island with a heavy focus on the islands that were hardest hit by the storms of 2017. No island was left out.

We are also grateful to those who delivered higher percentages of success each year in the Capital Program.

Grand Turk

• Eliza Simons Primary School new block
• Roads
• Upgrading to NJS Francis Building
• HJ Robinson High School Repair and upgrade Works
• Wellness Center Works
• Front Street Vendors Market
• Upgrade Works to TCICC Campus
• Water Pumps
• Repairs and upgrade works to the Prison which including the building of a new block
• Green Door Shelter repair and upgrade works
• Antioch Adventist Church Shelter repair works
• Morgue upgrade and repairs
• EHS storage buildings
• Repairs to Governor’s Residence at Waterloo
• Mental Health Home Works
• Repairs to Lands Division
• Replacement roof on Governor’s Office
• Home for domestic violence
• Fire hall for TCIAA firefighters
• Repairs to JAGS McCartney International Airport
• Parade Grounds
• Removal of Mega One Triton
• Victoria Public Library
• Lighthouse upgrade works
• Special needs school
• Sea Defenses Consultancy

Salt Cay

• Rehabilitation of Airport Terminal, Apron and Runway
• Mary Robinson Primary School
• Public tank
• Salt Shed
• Shelters and Emergency Operations Centre – Methodist Sunday School Hall and the Club House
• Reinstatement of seawall Salt Cay
• Basketball court
• Environmental Health storage buildings – Salt Cay
• Upgrade to DC office

South Caicos

• Rehabilitation of Regatta Village – South Caicos
• Rehabilitation South Caicos – Jetty
• Morgue for South Caicos
• Basketball court refurbishment
• Airport terminal
• South Caicos Airport fencing
• South Caicos Clinic
• Shelters and Emergency Operations Centre – Community/Youth Center South Caicos
• Shelters and Emergency Operations Centre – Wellness Center South Caicos
• Wellness Centre upgrade
• Conch Ground Bay ports work
• Government office block –XCS
• Iris Stubbs Primary school repairs – South Caicos
• Marjorie Basden Primary school – South Caicos

North Caicos

• Road works
• Replacement vehicle phase 3
• Basketball courts
• School Infrastructure Project Phase 2 – Construction of new technical, vocational and
• specialty block at Raymond Gardiner High School
• Shelters and Emergency Operations Centre – Adelaide Omeler Primary School
• Shelters and Emergency Operations Centre – Kew Community Centre
• Shelters and Emergency Operations Centre – Sandy Point Community Centre
• Construction of promenade/ boardwalk and craft market for Bottle Creek
• School Infrastructure Project Phase 1 – Raymond Gardiner High School
• Pavement of school entrance
• Conversion of old Public Works office into specialist classroom
• Heavy equipment for farm

Middle Caicos

• Purchase of vector control truck
• Purchase of ambulance
• Repair to Conch Bar Community Centre Shelter
• Replacement vehicle
• Basketball court

Providenciales

• Roads
• Down Town Ballpark lights
• Repair works and upgrades to Gustarvus Lightbourne Sports Center
• Repairs and upgrading of EMS ambulance base
• Domestic violence home
• Refurbishment works to 3 buildings purchased
• George Brown Post Office
• New Long Bay Primary School
• Upgrade works to Clement Howell High School
• Repair works to IPPS
• Repair works to ECPS
• Repair works to OJPS
• Purchase of building for Trade School
• Upgrade works to the National Stadium
• New block for OJPS
• New block for ECPS
• New block for IPPS
• Long Bay High School upgrade works
• Farmers Market
• Upgrade works to the Bight Fish Fry
• Vessels for DDME
• Leeward Palms Park
• Chalk Sound Park
• Government complex
• Begin works for TCICC Provo Campus

Mr. Speaker, this is a hard working Government

Laws Passed

Mr. Speaker, despite a delay in our first year of nearly 6 months and an Agenda driven on many occasions by external obligations in the area of financial services, my Government, your Government was able to pass over 275 pieces of legislation with 73 bills and 202 pieces of regulation between 2017 and 2019:

21 bills in 2017

32 bills and 78 Subsidiary Legislation in 2018; and

20 bills and 42 pieces of regulation in 2019.

We have passed 82 bills and 316 pieces of Subsidiary Legislation since 2020.

Mr. Speaker, this is a hard working Government!

Strong Partnerships

Mr. Speaker, without God none of this was possible, He has provided for us before and we are confident that He will do it again.

Mr. Speaker, we anticipate that adjustments will be needed as time progresses and we are eager to develop again strong partnerships to move our economy forward.

Mr. Speaker, we have served our people and while much has been done, there is much to be done. We are excited about the path that TCI is on and we are cautiously optimistic, that things will turn for the better sooner than we can imagine, we are confident that there are bright minds and when we come together over the next few weeks, will fine tune strategies and plan to strengthen and diversify our economy and empower our people.

Mr. Speaker, it is an honor to serve our people in this role and to have presented this 43^rd National Budget. Mr. Speaker, I pause to pay homage to my Party’s first leader, this country’s first Chief Minister and to date only named national hero who passed away forty (40) years ago next month and who ensured that all of his policies paved the way towards self-determination. Mr. Speaker, I am convinced that we are on the path to a self-sufficient country with these key and critical investments towards human capital, in healthcare, in border protection and national security, on the protection of our environment and in efforts towards climate change risk reduction, the creation of critical bodies, investments in social security, civil servants development and welfare and an aggressive push towards a diversified, resilient economy.

But Mr Speaker, we all know that our first Chief Minister was a sports enthusiast, he loved youth and he believed in positioning our people in places where they are empowered and become owners. So Mr Speaker, I know that he would be happy to hear what we are about to announce.

Some years ago Mr Speaker, we entered into an imperfect arrangement and invested millions of dollars of the people’s money on someone else’s property. Over the past year, my Government has successfully negotiated on behalf of our people and have purchased and are now the rightful, registered owners of the National Stadium.

Mr Speaker, this is not a small accomplishment. This is truly now the people’s National Stadium.

Mr. Speaker, this is a working Government!

I wish to extend sincerest thanks to those who assisted in the preparation of this Budget: thank you all the accounting Officers, the financial managers, the heads of departments, the heads of secretariat and Mr. Speaker, I wish to thank the Appropriations Committee for their work.  I remain grateful to my small but hardworking team in the Office of the Premier and Team Finance especially my PS, my DPSs, my Budget Director and SPPD Director who serve directly in the Office.

Mr. Speaker, I wish to thank those that continue to partner with the people of the Turks and Caicos Islands – regional and international – who continue to aid in the development of these Islands and I mention the UK Government through the FCO, the CDB and the EU.

What does God require of us? He has shown us what is good. And what does He require of us but to act justly and to love mercy and to walk humbly with God.

We are a blessed nation and a blessed people.

And may God continue to bless us all and may He continue to bless these Beautiful by Nature Turks and Caicos Islands.

END