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PM Dean Barrow Presents Second Budget
posted (March 6, 2009)

“Overcoming the challenges and pursuing the opportunities” - that’s the name of the budget that the Prime Minister presented in parliament today. It’s not exactly inspiring and from the looks of it, the PM wasn’t exactly inspired – and in dire financial times – it’s difficult to find any world leader who’s purely optimistic about future prospects. Still the Prime Minister stressed that they did well in what was a bad year – and he expects his government to continue doing so.

Jules Vasquez Reporting,
Barrow boasted about last year’s performance.

Hon. Dean Barrow, Prime Minister
“The shackles of the PUP legacy and world circumstances could not restrain us. We became Prometheus unbound; and all of us on this side of the House will remain immeasurably proud of our first year in office.”

And with 3.8% growth in the economy – there was room to boast. But Barrow had to look also at the high unemployment rate and soaring inflation.

Hon. Dean Barrow,
“But there is a spike unfortunately Mr. Speaker in the consumer price inflation to 6.4% from 2.3% in 2007.”

Worringly, tourism was also down.

Hon. Dean Barrow,
“Tourist arrivals declined as stay-over visitors fell for the first time in 12 years with a 2.4% decrease to 236,926 persons, and the number of cruise ship disembarkations also fell for a fourth consecutive year, with a 4.1% reduction.”

And while there were adversities, in the main the budgetary year was a success.

Hon. Dean Barrow,
“Notwithstanding all the challenges that we have faced since the Government came into office last year, the budget for this fiscal year 2008/2009 that ends this month proved to be well financed, and we project a surplus on the overall budget balance. The magnitude of this achievement should not be understated."

And looking ahead to the new budget, the Prime Minister says the government’s priorities are in order.

Hon. Dean Barrow,
“Government is holding high its commitment to the education, health, social and physical wellbeing of the Belizean public. To this end, we are allocating additional budget expenditures to those priority areas of education, health, food security and the physical infrastructure.”

And while those are government’s priorities, to full up the financing gap, they are turning to taxpayers.

Hon. Dean Barrow,
“We do not propose to introduce any new tax measures apart from an increase in the rate of import duty leviable on gasoline and diesel oil. Tis increase in the flat tax on petroleum is one of the tough decisions I spoke of earlier. So let us remember the history of it all. When the prices for our imported petroleum products were extremely high, government did not dither. It stepped into the breach and gave up an unprecedented amount of revenue in order to restrain the apparently unending upward spiral from completely wiping out Belizean consumers. We kept on reducing the RRD and ultimately removed it altogether, replacing it with an excessively low flat tax. The RRD removed at the time was approximately $2.30 per US gallon; and the revenue sacrifice the government made for the Belizean public amounted to 40 million dollars on annualized basis. Even after the imported oil prices fell sharply and I was being pressed to compensate by recouping some of the revenue loss, I refused. This government was determined to maintain the great boon to the Belizean people for as long as we possibly could.

Even now that we are forced to ask back for some of the abundance that we passed along, we are ensuring that this doesn’t happen until April. Thus there would have been as long a spell of incredibly low pump prices as we could possibly have managed. I also note that the increase we are proposing is only $1.00 per gallon on gasolines and diesel. This amounts to less than one half of the taxes that were removed over the last year. It will still keep diesel at below the $6.00 per gallon mark, and gasoline at below $7.00. Butane, on which there is no tax, will not be affected. In doing our calculation we were guided by best estimates of where the acquisition costs for the refined products will be over the next year. If for any reason these turn out to be significantly higher than the experts predict, it is my promise that we would then come back and take off as much of this dollar increase as would put things back in alignment for the Belizean people.

This single step will yield thirty million dollars and that took us half way to closing the financing gap. Government’s economic diplomacy did the rest and we are now, so to speak home free.”

Home free with much help from International partners.

Hon. Dean Barrow,
“This financing requirement will be met from the following already secured sources of financing: 1) Draw downs of approximately US$28.8 million in project related loans already committed for the Capital III Program. 2) Drawdown of US$7.5 million from a new IDB Social-Fiscal Policy Based Loan. 3) A drawdown of US$20 million from a new Republic of China (ROC) Budget Support Loan, and 4) a moderate amount of domestic financing equivalent to US$5.2 million drawn from balances in the Petrocaribe Fund.”

And with that support, in a speech that was more somber than soaring, the Prime Minister predicted steady if not superlative sailing in rough seas.

Hon. Dean Barrow,
“Difficult decisions have confronted us and hard choices have had to be made. But let me say right at the start that we will bring the Belizean nation out of this global crisis with minimum discomfort.

Ad so it is that today I have no doubt that the overflow problems presented by a world in crisis cannot defeat, or even too long detain, the Belizean people. It is one of the wonderful truisms of human existence that there is hardly a challenge that does not bring with it an equal opportunity. Here, on the original Spanish Main, at the current crossroads of Central America and the Caribbean, let no one doubt that it continues to be our special destiny to vanquish challenges and take full advantage of opportunities. As it was in the beginning so it is now for a nation marked by sinew and synapse as ultimately bound for glory.”

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