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Grenada government presents EC$1.1 billion budget to Parliament

Prime Minister Dr. Keith Mitchell  in his budget presentation said despite the strong economic recovery and the reduction in unemployment, too many Grenadians are still without work. Prime Minister Dr. Keith Mitchell in his budget presentation said despite the strong economic recovery and the reduction in unemployment, too many Grenadians are still without work.
ST. GEORGE’S, Grenada, Dec 9, CMC – Prime Minister Dr. Keith Mitchell Friday presented an EC$1.1 billion (One EC dollar =US$0.37 cents) budget to Parliament, reducing personal income tax,  the payment of increments to public workers and outlining other relief measures for Grenadians.

Mitchell told legislators that the budget with Recurrent Revenue estimated at EC$657.2 million, and Current Expenditure of $599.0 million” is consistent with our long term objectives of fiscal discipline and high, sustained, job rich and inclusive growth.

“It seeks to build on the successes of the previous four years,” he said, noting that EC$154.3 million had been set aside for Capital Expenditure.

Mitchell acknowledged during his presentation that despite the strong economic recovery and the reduction in unemployment, too many Grenadians are still without work.

mitchell-in-parliament

“Reducing unemployment therefore remains a key priority for us going into 2017,” he said, outlining what he termed were specific areas of interventions that will lead to faster, job rich, inclusive and sustainable growth.

He said the fiscal measures “will likely touch every citizen and sector of our society” adding “our fundamental philosophy of putting more disposable income in the hands of the people has never changed.

“Without the decisive response by this government and the sacrifices of our people, to confront the fiscal challenges, the situation today would be unthinkable. We have built a solid foundation and are now in a better position to pursue this philosophy.”

Mitchell said that there would be a tax registration amnesty for the period January to March 2017, which will facilitate the registration of tax payers with the Inland Revenue Department (IRD), without the imposition of the penalty for failure to register.

He said a tax filing amnesty would also be provided for the payment of the Annual Stamp Tax for the period 2013 to 2015, without the imposition of the filing penalty. The period of this Filing Amnesty will be from June to August, 2017.

“Further, we have heard the request from the business community for a relief on the rate of Annual Stamp Tax. We will therefore reduce the rate from 0.75 to 0.7 per cent. This reduction will take effect for tax period 2018.”

Mitchell, who is also Finance Minister, said that there would also be a  reduction in the price of the 20 pound cylinder of LPG from EC$42.00 to EC$40.00 from January 2017  and that the reduction of the personal income tax rate from 15 to 10 per cent goes into effect in the new fiscal year.

The Prime Minister said the removal of all income tax on pension income takes effect from January next year and that additional tax relief based on the performance of government’s finances and a comprehensive review of the tax system, will be considered in the new fiscal year.

“The timing of these adjustments is to ensure we meet our obligations under the (Home grown) Programme and the Fiscal Responsibility Law; as well as make the requisite administrative arrangements in Inland Revenue,” Mitchell said, noting that even before the implementation of the new relief measures, “our tax effort is among the lowest in the ECCU (Eastern Caribbean Currency Union)”.

Mitchell said he is confident that the policies of his government, which controls all 15 seats in the House of Assembly will allow for the continuation of a “responsible and progressive economy for the benefit of all Grenadians”.

He said he also wanted to “recognise and pay tribute to the exercise of patriotism and commitment to national interest that our public sector unions have demonstrated,” adding that “I believe that we are seeing significant opportunity for partnership and dialogue”.

Mitchell said in light of this cooperation “we are addressing the legitimate concerns of our public officers, we will have to balance these efforts by requiring higher levels of performance and value for money for the people of Grenada, Carriacou and Petite Martinique”.

He said his administration is in the process of designing a long term comprehensive approach to human resource management and development in the public service.

“This new approach will set the direction for the strategic management of the Wage Bill, as framed by the Fiscal Responsibility Legislation that was previously passed by the Parliament,” Mitchell said, adding that “while there has been initial dialogue on the Fiscal Responsibility Legislation, the future success requires deeper engagement and collaboration with the public sector unions and other key partners to advance the design and implementation of the New Human Resource Management and Development approach for the public service”.

Prime Minister Mitchell said that “this thrust is critical to safeguard and build on the gains realized during these last years” and that his administration will focus on resolving long standing industrial relations issues with public officers, including compensation and terms and conditions, in a sustainable and responsible manner, including the phased regularisation of public officers and teachers;

Mitchell said that the second priority for his government is to address the long outstanding issue of public service pension, an issue which was created in 1983 and has evaded a workable solution.

“We are committed that, before the end of 2017, there will be a framework to provide a just, equitable, adequate, affordable and sustainable retirement income for Grenada public officers,” he said, adding that a “critical success factor will be constructive engagement with the unions.

“In preparation for this process, we have secured technical assistance to conduct a comprehensive review of the status and to identify options. A time-bound task force has been proposed. The task force will be made up of representatives of all public sector unions and the Government, and with appropriate technical support from the National Insurance Board and other entities.

“We have shared the road map with the public sector unions and have recently received a response to proceed. We proposed to start implementing the recommendations of the task force as they become available.”

Mitchell said he is committed to solving this issue before he leaves office.

“If we talk about legacy, Mr. Speaker, this is the legacy of which I will be proud,” he told legislators.

Mitchell also said that public servants have carried their share of sacrifice during the period of adjustment and that his administration is determined to address their concerns, “even within the context of our constraints.

“We have already brought increment payments current for 2016, and we will maintain current payments going forward,” he said, announcing that by December 16t “we will pay, not one, but two installments of increments, specifically for 2014 and January-June 2016.

“And we will continue honoring all outstanding payments on increments to public officers, to be completed by mid-February 2017,” he said, adding that the government is in negotiations on salary increases and fringe benefits for the period 2017 to 2019.

“It is our hope that those negotiations will be completed by the end of this year. Once agreement is reached with our union partners, the new salaries will be implemented with effect 1st January, 2017,” Mitchell said, adding that for the first time ever, “we are working toward a one-off payment agreement to every public officer who would have served a substantial portion of the period 2013-2016, in recognition of their contribution and shared sacrifice during the Homegrown programme.

“Discussions with the various unions have begun, and we are confident that we will reach a satisfactory agreement and be able to meet all those payments by February, 2017.”

  • Countries: Grenada