Passed:  $388.9 Million Budget for TCI for 2022-2023

By Deandrea Hamilton

Editor

#TurksandCaicos, May 12, 2022 – Government spending for the Turks and Caicos Islands is projected to swell by 20 per cent and the PNP Administration is optimistic about what the increase will mean toward national development.

According to the presentations, earnings for the TCI Government are expected outpace expenses in the Budget which was passed in Parliament on Thursday May 5, 2022 and it gives TCIG an additional $78 million as approved for spending in the new fiscal year.

“Despite, the challenges around the world, our policies and priorities are deliberately designed to position our country to continue its economic rebound through 2022 and 2023.   We are projecting that economic growth will be fueled by continued strong recoveries in the tourism, construction, and the real estate sectors.

Local authorities and the international rating agencies believe that as long as the strong performance in the tourism, construction, and real estate sectors remains, Real GDP will continue to grow.

They are forecasting a greater than 7% growth in 2022, and an average growth of around 5% for the following 3 years – i.e. 2023, 2024, and 2025.

This positive forecast comes on the heels of estimates that the TCI economy grew by more than 10% in 2021.

Notwithstanding the very strong growth last year, the GDP remains below pre-pandemic levels. Mr. Speaker, the economy is simply “catching up” after a significant decline of approximately 27% that it experienced in 2020.

Mr. Speaker, our Government will continue to use all the tools at our disposal to expand and diversify the economy, and most importantly create opportunities and prosperity for all our people,” said the Deputy Premier.

The PNP administration with its Budget presented under the banner: ‘An Economy that Works for All People, Opportunity and Prosperity’ has created a new category in the expenditure estimates, and it gives the National budget a category called Economic Affairs which due to its focus areas makes it the allocation leader.  For the first time in decades, health care will not get the lion’s share of the TCI budget, Economic Affairs will.

According to DP and Minister of Finance E. Jay Saunders this includes:  infrastructure development and land acquisition; tourism product enhancement, agriculture, catastrophic risk insurance; Environmental and Coastal resources; Energy & Utilities and Media & Communications.

“We want our people to live their best lives! We are laying the foundations to advance growth and development. We are creating a future that our people can look forward to and one that our young people can get excited about.

We made several promises in The People’s Contract on how we would create that future,” said Hon Saunders in his maiden Budget Communication.

The allocation for Economic Affairs is $103 million dollars; putting the new grouping at the top of the heap.

At No. 2 is health care.

“Mr. Speaker, the health of our people continues to be a significant priority of our Government. That is why we are allocating over $78.9M (20%) of the budgeted expenditure to health care delivery.  Our focus remains the provision of quality care, including: Public Health and Hospital Services; Mental Health; Research; Health Emergencies;  Dental; Laboratory Services; the promotion of Healthy Lifestyles, and Policy Planning.

The third largest allocation said Hon Saunders is $63.7 for public order and safety.

“Of this amount:  $32.5M will go towards Police Services; $19.2M is for the Law Courts, AG Chambers, Director Public Prosecution, Judicial Administration, and the Labour Tribunal; $8.2M for Public Order, including Disaster Management, Customs and Border Protection, Immigration, and Repatriations;      $5.4M for Prisons, Correctional, and Rehabilitation Services and $1.3M dollars for Fire and Rescue.”

In the No. 4 spot is what the minister called General Public services and including the Governor’s office, the Premier’s office and the House of assembly and Education rounds out the top 5 with an increase to $37.5 million this financial period.

“Like prior PNP administrations, we are increasing the education and training capacity of the TCI.  We are focused on creating modern schools that are accessible, equipped with the latest technical tools, and the right student/ teacher ratios.

We are creating curricula that provides the right mix of literacy, numeracy, and technology to best position our students to thrive in the global marketplace.

We are continuing our investment in early childhood, primary, secondary, tertiary, and vocational education with an investment of $37.5M.

Our priorities include:  Improving early childhood, primary, secondary, and tertiary education;  Providing scholarships to young people at the community college level; Maintaining recreational/sporting facilities;  Supporting TVET pursuits.”

These and other national spending reveals came in the Budget Communication delivered by the minister on Tuesday May 3, 2022.

As the Budget Communication rolled out the future for spending, Hon Saunders introduced the plans with comparisons, providing some context on the economic performance of the Turks and Caicos Islands for the previous period.

“Mr. Speaker, the Import Receipts tell a story of feverish activity, especially in the construction sector.  As an example, total Merchandise Imports – i.e. imports into the country – for Calendar Year 2021 were valued at $485.9M, which was a year-over-year increase of approximately $136M (39%) over 2020.

And I am happy to report that 2022 is looking equally as strong.

During the first three months of 2022 (i.e., January – March), Merchandise Imports increased by $59.7M over the same period in 2021. In the first quarter of 2021, Merchandise Imports were valued at $93.9M. This year, first quarter imports were at $153.6M. That’s a 64% improvement!  Mr. Speaker, that is performance!”

Turks and Caicos Islands in the 2021-2022 fiscal year over-earned by $90 million dollars and underspent by $20 million dollars, for what was a banner year all around.

In what may be its best performance ever the TCI economy has generated a $391 million dollar revenue.

In addition to that, the government spent a staggering $20 million dollars less than was budgeted for the year 2021-2022.

“From this surplus, we put $67.6M into the country’s Cash Reserves, which increased it from $121.7M (the balance at the start of the financial year on the 1st April 2021) to $189.4M – the closing balance at the end of the financial year (i.e. 31st March 2022).

That is a 56% increase Mr. Speaker, and that is performance!

Mr. Speaker, due to the country’s strong financial performance under our Government’s stewardship, we have not had to draw down on any of the pre-approved debt facilities at our disposal. And as a result, Mr. Speaker, I am proud to report that we retired the $80M revolving Credit Facility obtained in 2020.”

DP Saunders said $5.8 million is for new projects including a mobile police station and a totally new station to replace the rundown facility which is home to Grand Turk police.

“An additional $1.4M has been allocated to enhance border protection and security. The TCI Regiment will see an increase in its reserve force by 20 officers, with 2 full time permanent posts. A Defence Board will be established to provide oversight.

12 Marine officers will be added to the Royal Turks and Caicos Islands Police Force (RT&CIPF), plus 10 new Immigration Officers. In addition, more money will be allocated to the RT&CIPF to improve intelligence gathering and investigations as we step up crime fighting efforts.”

With all this financial buoyancy from the last fiscal period, Deputy Premier Saunders said this coming financial period is forecast to be even better.

The government’s revenue is projected to hit nearly $400 million dollars well ahead of the 2025 goal.

“That is why I am delighted to report to this honorable house and to the listening public, that:

1. Total Revenues collected for financial year 2021/22 was $391.1M, and 2. For the entire financial year of 2021/22 (i.e. from 1st April 2021 to 31st March 2022), which was our Government’s first year in office, every month, we achieved a surplus.

Mr. Speaker, I believe this level of annual revenues to be historic, but I stand to be corrected. Mr. Speaker, $391.1M is: $145M (59%) higher than the average revenues collected over the past 10 financial years, $77.3M (25%) higher than the $315M achieved in the previous best year (i.e. FY2019/20) over the past 10 financial years for revenue collections, $27.5M (7.6%) higher than our original forecast of $363.6M, and $188.8M (93.3%) higher than the Collections for FY2020/21 of $202.3M.

That is performance Mr. Speaker, but we should not be surprised, ‘as The plans of the diligent lead to profit…’ (Proverbs Chapter 21, Verse 5). Mr. Speaker, what seemed optimistic last year, with the blessings of God, now seems pessimistic.

Mr. Speaker, our healthy Operating Surplus, coupled with prudent spending practices, have allowed our Government to maintain a resilient Cash Flow position and strong Cash Reserves,” said E. Jay Saunders, the Minister of Finance, Investment and Trade and Deputy Premier of the Turks and Caicos Islands.

The National Budget was debated over two days and passed in the House of Assembly on Thursday May 5, 2022.