| “Finances Top Priority” | | Print | |
| Tuesday, 24 November 2009 22:31 | |||
 Governor Gives Three Month ReportPublic service salaries will be delayed this month because of the government’s precarious financial condition, but Gov. Gordon Wetherell says payments should come on or before Dec. 4. “I will also be asking our bankers to repeat last year's exercise of making advances to civil servants before the Christmas break begins,” he said. The Governor also assured small business awaiting payments from government, they are a top priority when the government is able to pay. These pledges came in Wetherell’s first regular quarterly report issued Nov. 20 that details the new government’s efforts to pay its bills and to achieve sound financial management now and in the future. “The previous government’s policy of unrestricted spending and tax concessions was unsustainable. By March 31, 2008, it had run up significant national debt. Any reserves had long since been spent leaving the economy vulnerable to external shocks” such as the international financial crisis. When the Governor assumed full control of the government in August, the country had amassed a national debt of $135 million, including $56 million in unpaid bills and $19 million in short-term overdrafts. So the first order of business was to review the financial situation and implement management and financial controls. Strict spending controls were put in place with a priority on vital public services such as health and education. The government has passed a new budget that slashes recurring monthly expenses from $22 million in 2008-09 to $11 million in the current fiscal year. Also, the annual $90 million public payroll is targeted for a 2.5 percent cut before the end of March 2010 with reductions in housing, telephone and transportation allowances. “We have also cancelled an expensive and unmanageable contract for third party administration of overseas healthcare,” the governor said. “We have put in place a new one at a flat rate per month that has already saved the government hundreds of thousands of dollars.” In addition to cutting costs, the government is seeking to recoup losses and to increase revenue on a number of fronts. Public service is being restructured to improve collection of revenue, especially in the Customs department, which collects 40 percent of all government revenue. Officials will be cracking down on customs violations to improve collections and will be strictly enforcing all dues and taxes. “It is clear that the TCI economy suffered significant losses from the unsustainable sale of large tracts of (Crown) land by the former government,” Wetherell said. “To address this we have begun work on a new Crown Land Policy.” Crown Land Unit systems had “virtually collapsed,” allowing $3 million in conditional purchase leases to go uncollected. In Land Registry, a huge backlog of cases is being processed, and records are being computerized to speed up access to information and to more accurately collect stamp duty. “For many years, the basis for determining stamp duty was on the sales value of transactions, and did not take account of the market value,” the Governor said. “Under the Stamp Duty Ordinance, the higher of the two values determines the stamp duty to be paid. We will fully adhere to the Stamp Duty legislation to ensure that the TCI does not lose revenue as a consequence of inaccurate calculations.” The government is also getting outside financial help to turn things around. “To support this effort (to improve public service) and to support very busy staff in priority areas across government, we have appointed a number of UK advisers funded by the UK: experts in tackling the types of challenges TCI is currently facing. Their appointment is part of the UK’s commitment to assist the TCI.” “We have also secured €2 million ($3 million U.S.) from the European Union to implement the recommendations of our Revenue Options Study, and to assist the Attorney General’s Chambers and Ministries with a range of legal drafting. Additionally we have successfully bid for a further €11.5 million ($17 million U.S.) from the EU for projects in several areas, including infrastructure, economic reforms and for disaster prevention.” The Governor also noted that he soon expects to receive reports on how to bolster tourism from the Working Group and to improve efficiency of the police department from the Overseas Territories Law Enforcement Adviser.
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