01 April 2013

Burden of Framework for Fiscal Responsibility Rests with Technocrats

Anguillian Newspaper Online

Chief Minister won’t sign unless they say yes.

Chief Minister Hubert Hughes

This evolved from a question posed by Reverend John A. Gumbs to Dr. Aidan Harrigan, Permanent Secretary, Finance, one of the Government’s leading technocrats. The Supernumerary Methodist Minister’s question was: After a two-and-a-half hour public consultation on the Framework for Fiscal Responsibility, or Fiscal Sustainability and Development, on Monday evening, there has been no other definitive conclusion about the signing of the policy document than that it is for the senior public servants to advise the Chief Minister to sign it.

“The Chief Minister has said that he can only sign the document if he is advised by his technocrats. My question: ‘Are you, the technocrats, prepared to advise our Chief Minister to sign the document?’”

Dr. Harrigan replied in part: “If we are to compromise on the main issue which seems to be sticking with debt to recurrent revenue, we would advise that you agree that – subject, however, to the framework being reviewed after a certain period of time – and we have recommended five years. There are some other subsidiary issues that we mentioned that need to be finalised as well… and the transition period to be in compliance,but they are not as major…”

The Chief Minister, alluding to the fact that the UK Government will not approve the 2013 budget, unless the FFR is signed, said that the Anguilla Government was losing money in taxes by not having an approved budget to collect revenue. “We need to give Britain an answer soon because the British financial year starts on the first of April. So we have to give an answer soonest and I would stand ready to comply with the advice of my technocrats,” he stated.

Earlier, in criticising the Framework for Fiscal Responsibility, the Chief Minister painted a gloomy picture of Anguilla’s economy. “Britain has offered us 12 million out of the 140 million dollars we asked for,” he said. “We have certain unexpected commitments. We have to pay 32 million dollars right now to civil servants in deferred payments…We have to be subsidising the Health Authority by up to 21 and 25 million dollars, and we had to reduce it to 16 million…and we still have to find money to send people away.

“We owe debt to one of the security agencies…of nearly 17 million dollars right now, and rising. We have to subsidise the Anguilla Air and Seaports Authority which has been recently established. We have to take care of unpaid bills in the Treasury; we have to pay off a St. Lucian loan/debt of 21 million dollars. We still have to service our CDB loans and our local expensive bank loans. We have a host of obligations that the international norms dictate. We have to feed our prisoners properly…

“We have hotels where we have given out large hunks of land and those hotel investments are not producing – such as the golf course project which stopped construction in June/July 2008 and construction has not yet started. We have Cap Juluca Hotel which was producing a lot in terms of jobs and strength to the economy, to the banks, families, to Social Security – and we have lost, to a great extent, that contribution which Cap Juluca should be making all now. Malliouhana stopped [operations] for almost two years, putting 180 people out of work. Those wages and salaries helped in the general economy. Mariners is still closed for years. Cinnamon Reef is still closed for years.

“So basically we are saying to the British: you have certain obligations to us. You have not lived up to those obligations but you have imposed restrictions on our development. If Britain had lived up to her obligations, we would not have gone into borrowing so early.As a territory which was neglected for three or four hundred years, and which had a revolution about that neglect, there was no reason for us to go into borrowing so early because the British did promise to develop the infrastructure but, instead, we had to spend money.

“Right now we have no water. The Aqua Design project at Crocus Bay – GE – is charging us some five million US dollars for unpaid bills, so that project is closed down. That’s why we are rationing water. So the infrastructure that we expected to be done has not been done and still remains a burden on the taxpayers of Anguilla. So we are justified in asking for a pittance and that pittance was 140 million EC dollars. That’s all we asked for because we know that we still have to settle all these debts.

“It is not an easy task. The whole question of a paper called Framework for Fiscal Responsibility is only paper but there are greater dimensions – there are repercussions for the general economy and the tax burden of the Anguilla people for the fact that we still do not have the amenities and facilities that we invested so much in, and we are still suffering. There is poverty in Anguilla. So we can’t have a document which has an anti-development bias. Anguilla needs to develop and we can’t have Britain, 4,000 miles away with no interest in us, trying to impose these things while restricting people from investing in Anguilla.”

Three of several technocrats working inside and outside the Ministry of Finance and Economic Development gave presentations at the public consultation on the FRR. In addition to Dr. Harrigan, the others who spoke were Foster Rogers, Permanent Secretary, Economic Development, and Anthea Ipinson, Chief Projects Officer. Their presentations were on the recommendations made by the Anguilla Government to the UK Government on the FFR and other related matters.

Following their deliveries, several questions and comments were put forward by members of the public including former Minister of Finance of the Anguilla United Front Government, Victor Banks. He was of the view that the time had come for some conclusion to the Framework for Fiscal Responsibility.

There was no discussion on the progress of talks between the Anguilla Government and the UK Government on the FFR which were said to be nearing agreement.