TCI: Slightly Bigger Budget: $342.9 Million Nat’l Spending for New Fiscal Year

#TurksandCaicos, June 6, 2021 – Covid-19 devastated the Turks and Caicos islands because the jurisdiction is so heavily dependent upon travel and tourism as its economic lifeblood; the Premier Washington Misick did not need to state it but the fact was a preamble to his 2021-2022 Budget Address on June 29 which would aim to illustrate how TCI absorbed the hit, learned from the hit and to where it can pivot because of the hit. 

“Mr. Speaker, it has been a tough period as we have dealt with the ravages of COVID. There have been suffering and death. We mourn the loss of each person and send condolences to their loved ones. I ask that we stand and observe a moment of silence not only for those who died from COVID but all the souls we lost in recent times.

May their souls rest in peace and light perpetual shine upon them.

Hon Speaker, this is the first budget in my administration that is just about four months old. My team and I have hit the ground running. In fact, less than two weeks after taking office, we were already delivering for the people. That is what we intend to do throughout this term.”

Several training campuses are earmarked including one for Hospitality and at least four financial institutions are being built up including the long-touted Credit Union. 

“Institutions such as a Development Finance Institution, a Credit Union, a Partial Credit Guarantee Fund are all intended to work in concert to achieve economic prosperity, societal well-being and reduce income inequality,” said the Premier who shared more on the concept.

“$250 thousand dollars will facilitate the creation of a Credit Union to encourage and expand access to affordable banking, insurance, and financial services for all.”

On the new training campus for uniformed officers, he said: “Two million dollars is being spent to acquire property, develop the framework and programs for the training of law enforcement personnel. This is a priority. This National Security Training Academy will provide ongoing training for Police Officers, the Military, Customs, and Immigration Officers. It will facilitate recruitment and training of the best candidates our country has to offer and rebuild a positive image of these various bodies.”

When hurricane Ike compounded by the Global Financial Crisis of 2008 took its toll on the Turks and Caicos, it was a 19.8 per cent blow said the Finance Minister in reflecting on previous tough times … Premier and Finance Minister Hon Washington Misick said the Coronavirus Pandemic resulted in 35.8 per cent losses in government revenue. 

Hotel and Restaurant Tax was down a staggering 73 per cent after TCI was shut off from the world between March and July.  No hotels meant less need for imports, particularly food and drinks and so import duties were down 34 per cent and customs processing fees dipped by 38 per cent. 

The two border taxes account for 60 per cent of governments revenue, said the premier in the address. 

“Mr. Speaker, COVID has been devastating to us – a Tourism reliant country. In FY 20/21, overall Government Revenues declined by $112.9 million or 35.8 -percent compared to Financial Year (FY) 19/20. This decline stemmed from a 73.0- percent fall in hotel & restaurant tax, a 44.6 – percent fall in imports and a 38.1- percent fall in customs processing fees. Import duties and Customs Processing Fees (CPF) are the largest revenue generators and combined account for 60 percent of the TCIG Revenue.”

A projected deficit of $100 million was missed; the actual was 88.7 million which, said Hon Misick, was funded from TCIG cash reserves. 

“Coupled with the loss of revenues Mr. Speaker, a demand was placed on the country’s finances with the compulsory health measures to protect life. Resources had to be redirected and our reserves had to be used to pay for testing, additional bed capacity, respiratory and oxygen generating equipment and treating COVID-19 patients. There was also more than the usual expenditure on cleaning, sanitization, and personal protective supplies.”

The new budget is only two per cent more than last budget year; $342.9 million is the projected spending.   Revenue for the upcoming budget year is pegged, conservatively at $274.5 million, he said. 

“The Estimated expenditure is $342.9m. This is a 2 percent increase over last year and 9 percent over the rollforward Estimates. “

Itemised were:  $304.2 is for recurrent expenditure – the day to day expenses such as wages, goods, and services;  $11.7m for non-recurrent expenditure; and  $27.0m in capital development.