And, back to the Prime Minister - we also asked him about the ongoing budget consultations.
As we've reported, last week government met with the business sector groups last week, and this week, it's with the unions. Basically it's to get their views and joint support for a way out of the very deep financial hole government finds itself in - with a massive deficit to bridge and debt that balloons daily.
Yesterday, the Chamber of Commerce wrote a three page letter to the Prime Minister which builds down to this quote, "as far as the matter of public-sector wage bill reductions-which in our view would, in the short term, have a relatively nominal impact on the Debt-to-GDP ratio, the BCCI states that it will not object if it is that the Government ultimately decides that this is the most prudent option, after it has judiciously weighed its benefits and costs."
So, there it is, the chamber says, basically, if you want to cut public wages - we won't object. We asked the Prime Minister what that means to him:
Hon. John Briceno, Prime Minister
"There is a lot of work that we have to do, Just today the cabinet, myself as the minister of finance and the minister of state in the ministry of finance Chris Coye for us to meet with the financial secretary and the technical people in the ministry to see how the budget is shaping up and to see how best we could address the fiscal imbalance, but to always keep in mind we are elected to help people, to get this economy working to create opportunities, but at the same time to make sure that we can keep people safe from Covid. So that pretty much is what is driving us when we are setting up the next budget for 2021/2022."
Reporter
"I know that the Belize chamber of commerce has written to you. If I am not mistaken their letter went out yesterday, I don't know if you received it and if yes, what are your thoughts on some of the matters they raised?"
Hon. John Briceno, Prime Minister
"Coming from the business community they can see numbers, they can see a massive fiscal imbalance and whilst we can talk about raising taxes, it's difficult to raise tax in a time when the economy is in a recession or to implement new taxes. This will take a long time to see the results. So from their point of view they feel that among the other recommendations that they make they are saying well if that has to be done in which is a last resort that there has to be some salary cuts and to be able to try to keep people working, then that they would support the government should we make that decision. Before we get there, we want to be fair, we want to be able to have some consultations this week. We are going to be meeting with the teachers union, the public service union and then with the NTUCB, so that we can get their ideas and then when we get all of the ideas we are going to compile t and see what is the best way to be able for us to close that fiscal imbalance that the UDP left us with. I need to remind people they left a deficit of 500 million dollars, something that is unprecedented.; It took us 17 years for us to past 500 million dollars in loans as a country and the UDP has done it in one year, because they have refused to take the tough decisions."
Reporter
"Should Belizeans prepare for maybe an increase in taxes to try to get the government some sort of revenue going, because we understand that we are still in a deficit at this time and the wage bill is still a big problem for the government?"
Hon. John Briceno, Prime Minister
"I don't think raising taxes at this time would be a wise thing, because we are in a recession and so when you are in a recession and you raise taxes, you only prolong that recession and lead into a depression which is something we are doing everything possible to avoid. We have been working with the private sector, we have working with agriculture, with BPOs, with tourism in ways that we can jumpstart the economy, and so whilst we are saying we are not looking about raising taxes, what we do need to do though is to be able to collect the taxes that's out there to be collected and so we can assure you that we are going to be working on that to address the issues from in the customs department, the Belize Tax service which includes income tax, corporate tax, business tax and GST."
In its letter, the Chamber adds, quote, "In the event the government decides that a wage cut is its most prudent option; it is important...to not have those on the lower pay scales equally affected as those at the higher scales. Additionally, the Government would do well to insulate essential, frontline workers (police officers, healthcare workers, etc.) from any such cut. We need to maintain high morale amongst these essential workers, as they face the challenges of the pandemic head-on." End quote,
The consultations with the PSU - where the government side is led by the Deputy Prime Minister - start tomorrow.
