Mr. Speaker, it is a great honour and privilege for me to address the People’s House in this my first budget debate as Premier of these wonderful islands. For the young ones watching, thirty years ago, I served in this same capacity, as Chief Minister.

For this privilege, I thank the people for their vote of confidence in me and in the team that I lead. It is with deep humility, a sense of duty and history that I address you today.

Turks and Caicos Islanders here and those who give support from the diaspora have boosted my spirit with their consistent prayers and words of encouragement. I welcome those prayers.

Mr. Speaker, as usual, I must thank the Almighty God, for his mercy and grace. He has always held me steady and kept me secure. “He is my rock and my Salvation; He is my fortress”. I thank my team which has stood with me in the heat of the battle as we campaigned to win the hearts and the minds of the people. Their humility and commitment to our people inspire me.

The Governor and our Deputy Governor, although not members of this house, have been great partners, as we try to recover and rebuild after COVID 19.

The Attorney General and her able team have helped to craft and deliver key solutions to challenging issues.

Although I disagreed with the approach taken by the former government, I thank them for every effort that was made to stabilize the economy, and safeguard life and livelihood.

To the great team in the Premier’s Office and those in the Ministry of Finance who consistently go beyond the call of duty every day, your hard work is greatly appreciated.

To the Hon Speaker, Madam Clerk, and their team. To all public servants - Thank you.

To my dear wife, children, and extended family, I am grateful for your support and love.

Mr. Speaker, it has been a tough period as we have dealt with the ravages of COVID. There have been suffering and death. We mourn the loss of each person and send condolences to their loved ones. I ask that we stand and observe a moment of silence not only for those who died from COVID but all the souls we lost in recent times.

May their souls rest in peace and light perpetual shine upon them.

Hon Speaker, this is the first budget in my administration that is just about four months old. My team and I have hit the ground running. In fact, less than two weeks after taking office, we were already delivering for the people. That is what we intend to do throughout this term.

My opening presentation of the 2021/22 Budget is deliberately abridged, because the Fiscal Strategy and Policy Statement upon which it is crafted was prepared at a time of greater uncertainty. 

Also, the constitutional obligation to present the budget before the end of July meant that there was not enough time to take as deep a dive as we would have liked. Mr. Speaker, this budget does not account for the positive effect from the decline in the pandemic locally and the extended opening of the islands tomorrow.

ELECTION/EXPECTATIONS

Mr. Speaker, we were swept into office on a campaign that was centred on the people and protecting their interest.

We are here because the people believed in us and trusted us with the future of their families. We are here today still humbled by the massive landslide - the largest ever in the history of the TCI.

My team and I are all too aware, that the people have the power to fire us if we fail to deliver. That is why I say over and over: “This is the people’s term! We work for them and only them”.

Mr. Speaker, so long as I am in this seat, my priority will be taking our people from poverty to prosperity. It is my duty and honour to do right by them and change the status quo of the last 50 years which has left many behind. Mr. Speaker, as I travel across these Islands, I hear the concerns and fears of our people.

I hear their frustrations with how the development of the islands and the growth and development have not really benefitted them.

Many feel they are locked out of the economy. They want improvements in healthcare, education, and funding for business opportunities. They are worried about crime and the cost of living. Many are uncertain about the future of our beautiful islands. Many are fed up with politicians who promise plenty but deliver little.

Mr. Speaker, their demands are clear and simple. They want the issues to be addressed and commitments kept. Mr. Speaker, today I repeat my commitment to the people. The change begins with this administration. You told me that you want leadership you can trust. That is what we bring you.

THE PEOPLE’s CONTRACT

Mr. Speaker, the main plank of our election campaign was the People’s Contract. That contract which I signed, gives an overview of the policies and programs to recover and grow the economy, deal with the impact of COVID 19 and set the TCI on the path to long term prosperity.

It is our commitment to deliver on every pledge and we say to the people - We are your servants - Hold us accountable.

Let me make it clear that we value our partners who have been part of the development of these islands. However, foreign direct investments, must not disenfranchise our people. They must reap the benefits and they must taste prosperity and plenty.

Mr. Speaker, we have kept faith with the people and one by one we are delivering on what we promised including those in the first 200 days. In an effort to address the economic fallout resulting from the pandemic, my administration provided fifteen million dollars in stimulus grants.

Everyone who is over 18 years old, has Turks and Caicos Islands Status or a British Overseas Territory Citizenship, is living on these islands and took the time to register received a cheque for one thousand US dollars.

To ensure that no one is left behind, my Government updated the policy including:

• the extension of the cheque collection deadline now extended until September 1, 2021.
•  
• home delivery of cheques to incapacitated applicants.
• changing the identification criteria for persons over 70 years of age; and
• for those who qualified but are now deceased, the cheque can be paid to their estate.

As of June 2021, fifteen-thousand-two-hundred-and-eleven applications were submitted. Of this number, thirteen-thousand-seven-hundred-and-ninety-six (13,796) were approved; 632 were flagged as duplications; 783 were declined. TCIG Statistical Unit did a preliminary analysis of the Citizen Relief Stimulus grant programme and found that:

• 52% of the applicants are women
• 42% are between the ages of 21 and 40
• 5% of the grant money was used for the payment of Household upkeep and 30.2% for the payment of Utilities
• As of June 22, cheques valued at just over $13.6 million were printed
• Some twelve-thousand-eight-hundred (12,800) applicants have collected their stimulus payments

Mr. Speaker, it is my belief that when our people are facing severe hardships, the government has a duty to ease their burden and give them a hand up.

If you are a homemaker, a farmer, a doctor, a taxi driver, a fisherman or a hotel worker my government will not leave you behind.

FIXING THE PROBLEMS

Mr. Speaker, the Pandemic has taken a severe toll on the business community, especially small enterprises. To help them recover and recalibrate, my Government:

• approved write-offs of National Insurance Board (NIB) and National Health Insurance Plan (NHIP) interest and penalties on outstanding contributions
• We approved the waiver of outstanding Customs warehouse rents up to March 31, 2021. These initiatives will assist with keeping various businesses afloat and foster employee retention.

• We have re-cast the capital budget we inherited. We have made spending on infrastructure, the social development of the islands and the people top priorities.
• As promised, less than 2 weeks into our administration, we removed import tariffs from all essential supplies used for sanitation, hygiene, and safety purposes, including PPEs for a period of six months, starting March 2021.
• We accelerated the widespread distribution of the COVID-19 vaccines. We hope to get close to universal coverage by the end of August 2021.

• Partnered with the private sector to encourage and enforce safe work environments
• Started the process of conducting stakeholders’ meetings both virtually and face-to-face. We are ensuring that all stakeholders are brought into the decision-making process on all matters that will impact them
• Suspended the requirement for our people to be compliant with their NIB, NHIB and TCIG obligations to qualify for COVID-19 induced financial assistance.
• We waived the fees for status cards.

These were among the promises made in our first 200- days plan.

Mr. Speaker, there is much work to do, including improving the conditions for our hardworking public servants who held the fort and had our backs during the worst of the pandemic. Our early efforts have been centred on planning for fiscal sustainability and soundness in these unprecedented times.

We are pleased that in two short months, the Fiscal Strategic Policy Statement (FSPS) for the period 2021/22 to 2024/25 was approved by the UK. It was laid on the table of the House of Assembly on Thursday, April 29, 2021.

The overall outturn of the Turks and Caicos Islands Government fiscal performance has been better than expected. This is due to improvements in revenue collection in the final quarter of the year as well as a reduction in expenditure for the year.

Turks and Caicos Islands Government was able to end the fiscal year 2020/2021 with a lower-than-expected operating deficit. The total deficit for the financial year after debt repayment was $88.7M. This deficit was funded from the cash reserves.

GLOBAL ECONOMIC CLIMATE

The impact of the pandemic on world GDP growth is massive. The Brookings Institute in the United States says the global recession caused by COVID-19 is the deepest since the end of World War II.

According to the April 2021 World Economic Outlook Report from the IMF, the global economy contracted by 3.5 percent in 2020. That is a 7 percent contraction compared to the 3.4 percent growth forecasted pre COVID, in October 2019.

TCI EXPERIENCE

Mr. Speaker, COVID has been devastating to us - a Tourism reliant country. In FY 20/21, overall Government Revenues declined by $112.9 million or 35.8 -percent compared to Financial Year (FY) 19/20. This decline stemmed from a 73.0- percent fall in hotel & restaurant tax, a 44.6 - percent fall in imports and a 38.1- percent fall in customs processing fees.

Import duties and Customs Processing Fees (CPF) are the largest revenue generators and combined account for 60 percent of the TCIG Revenue.

Mr. Speaker, there was a massive drop in the number of stay-over arrivals in the wake of global travel restrictions.

Mr. Speaker, fewer tourists, coupled with critical lock-down initiatives caused business activities to decline.

Many, especially those in the hospitality sector became temporarily unemployed. As a result, household incomes fell dramatically causing a reduction in the quality of life of our people.

Coupled with the loss of revenues Mr. Speaker, a demand was placed on the country’s finances with the compulsory health measures to protect life. Resources had to be redirected and our reserves had to be used to pay for testing, additional bed capacity, respiratory and oxygen generating equipment and treating COVID-19 patients. There was also more than the usual expenditure on cleaning, sanitization, and personal protective supplies.

The Government established TCI Assured, an online portal where all international travellers (both visitors and residents) are required to obtain certification before traveling to the Turks and Caicos.

We facilitated online school with the provision of tablets for children as well as internet service. We reconfigured schools for reopening, implemented social distancing requirements and provided additional sanitization supplies.

All the factors combined put a severe strain on the Country’s cash flow and the fiscal space of the Government.

ROAD TO RECOVERY

The local economy is showing signs of recovery. In fact, despite the pandemic, S&P Global Ratings says the TCI has maintained ratings at 'BBB+/A-2' with a stable outlook.

Mr. Speaker that is a testament to the strong balance sheet and years of fiscal surpluses started by the Progressive National Party (PNP) government.

Mr. Speaker, like the S&P, we believe that the devastating impact of COVID 19 Pandemic on our economy will be temporary.

There are already strong indications of a robust rebound in our key tourism sector. We applaud our Tourism partners for their imagination, innovation, and commitment to the destination. The quality of their properties and services have placed the TCI in the best position to welcome visitors and reap the benefits.

Our Tourism brand is strong and resilient. We have one of the highest connectivity to our source market of North America compared to the rest of the region.

We are experiencing an expansion in the tourism sector that will increase the number of long- stay visitors. We also anticipate increased cruise passenger arrivals when cruise travel rebounds.

Mr. Speaker, we have made several strategic capital development decisions geared towards making our recovery more robust and much quicker. We expect to begin several large-scale development projects, on multiple islands.

Even with the pandemic, the Construction sector grew at about 3.5 percent in 2020. 

One major project was the world class Ritz Carlton hotel which opened last week. It has 147 rooms and 23 suites and will employ scores of islanders.

The construction sector is forecasted to grow at an average rate of 5 percent between 2021/ 2023.

Construction activity will continue to be propelled by the following:

• foreign direct investment in major tourism-related and other projects
• an increase in domestic private sector investments
• and the government’s capital programme.

ECONOMIC GROWTH

Mr. Speaker, there are strong signs of life. The TCI also fared well in terms of market liquidity. For instance, deposits to banks increased by 2.6 percent to $1.42 billion and represented 69.6 percent of total liabilities as of December 2020.

The liquidity risk for banks also declined with the loans to deposits ratio declining by 3.7 percentage points to 59.2 percent as of December 2020.

Mr. Speaker, it is forecasted that the economy will grow by approximately 5 plus percent in 2021.  This growth is expected to be sustained in 2022.

Mr. Speaker, I will assure you and our people that we are doing our best to make this growth even bigger.

LESSONS LEARNED

Mr. Speaker, you know that I am a glass half full guy and even in the darkest times try to see the light.

Defeating COVID-19 requires the engagement and commitment of the government, community, and individuals.

Our frontline workers and our people were the light in the darkness. You handled the fear and inconvenience with courage. You altered your habits, deferred your plans, changed work schedules but above all, you cared for each other.

Our frontline workers laid their lives on the line in service to the health and wellbeing of our fellow citizens.

The good book tells us that “Greater love hath no man than this, that a man lay down his life for his friends.”

I know I speak for everyone in this House when I say we owe you a debt of gratitude.

Today, I send each of you our love and God’s light.

Mr. Speaker, as with any crisis, the COVID 19 pandemic has taught us many lessons. It has exposed the vulnerabilities of small economies like the TCI.  These include: our risky over-reliance on the tourism industry, high-cost per capita service provision and infrastructure, extreme vulnerability to economic shocks, environmental and climate threats and associated population and development challenges.

We must diversify the economy so that we can better absorb shocks during a crisis. If we keep putting all our eggs in one basket, we risk losing everything.

We no longer have the luxury to just talk. Diversifying the economy has always been a key ingredient in the economic vision for the TCI.

We believe that the Financial services sector can be a major complementary economic sector to the tourism brand. We have no other choice but to act with proper planning, investment, restructuring and rebuilding our economy.

REFORM/REBOOT/RESTORE

Mr. Speaker, we did not come for this work to be ordinary.

We have one opportunity to reform the economic development model of the TCI and make it more inclusive. 

More importantly, we will ensure that it does not leave Turks and Caicos Islanders behind.

We are passionate about the social development of our people and the sustainable use of our environmental capital.

In the coming months, we will introduce a package of policies buttressed by the constitution that will protect the interest of Turks and Caicos Islands.

This budget does not speak to many of the new policies, but they will be reflected in future budgets. They include amendments to the Business License Regime, and other legislation that will create new criteria for outsiders to qualify to operate in certain economic sectors.

These policies and laws are intended to create a robust MSME sector which will contribute to broad inclusive growth and creating opportunities for Turks and Caicos Islanders.

SUPPORTING MSMES/START-UPS AND BUSINESS GROWTH

Domestic Capital Formation

To foster sustained economic growth, an inclusive approach to domestic capital formation (DCF) is being undertaken.

Mr. Speaker, our goal is to financially empower Turks and Caicos Islanders. To this end, the Government will establish a network of institutions to create a complete financial system built on interconnectedness.

Institutions such as a Development Finance Institution, a Credit Union, a Partial Credit Guarantee Fund are all intended to work in concert to achieve economic prosperity, societal well-being and reduce income inequality.

Development Finance Institution

Half a million dollars has been allocated to create the framework and operational budget for the Development Finance Institution (Ex) to support and promote entrepreneurship and start-ups, giving better credit access.

Creation of the Credit Union

250 thousand dollars will facilitate the creation of a credit Union to encourage and expand access to affordable banking, insurance, and financial services for all

Off-shore Financing

Half a million dollars has been provided to contract the services of a global consulting firm to develop a Marketing and Communications plan aimed at branding TCI as a competent and capable Offshore Financial Centre (OFC).

Partial Credit Guarantee Fund

The diagnostic study on Partial Credit Guarantee Fund is progressing steadily. This was endorsed by the Business Transformation Programme, as necessary to assist with collateralizing debt for small businesses.  Many MSMEs lack collateral to get loans to expand their businesses - COVID-19 has made this worse. 

To help them recover, financing will be needed for both capital expenditure and day-to-day operational costs. 

Micro, small and medium sized businesses are major contributors to employment generation. The Government is providing $500K for work on a Partial Credit Guarantee Funding.

EMPLOYMENT BENEFIT REFORM

TCIG Public Service Pension and Terminal Benefits

Cabinet has approved the reintroduction of a Turks and Caicos Islands Government (TCIG) Pension and Gratuity Scheme and Terminal Benefits package. This was one of our goals in the first two hundred days.

In May, the Cabinet indicated that the option it preferred was the Defined Contribution Plan (DCP).

The Office of the Deputy Governor (DGO) in partnership with the Civil Service Association (CSA) and the Benefits Committee conducted the feasibility of re-introducing a Service Pension and Terminal Benefits Plan.

Over the next 12 months, the Deputy Governor will lead the process to:

• finalize the initial design of the plan
• engage stakeholders
• settle on the contribution rate
• agree on the governance and administration structure of the fund; and
• work with the Attorney General’s Chambers to draft the necessary policy and legislation.

Mr Speaker, Fifty-five thousand ($55,000) dollars has been allocated to the DGO to engage a consultant and allocated two million ($2,000,000) dollars in this budget as ‘seed’ investment in the pension fund.

PUBLIC SECTOR INVESTMENT PROGRAMME - CAPITAL

Mr. Speaker, I am pleased to announce that the Public Sector Investment Program – the Capital Program comprises:

• $14.2m in new spending
• $4m from the Infrastructure Improvement Account exclusively for projects in Grand Turk; and
• $12.5m for ongoing commitments for a total PSIP of $30.7m

Airport’s Authority

The Turks & Caicos Islands Airports’ Authority (TCIAA) will spend $21.9M on new and continuing capital projects.

These include:

• $9.4m will be spent to complete the airport terminal in South Caicos. This includes a temporary facility while the main terminal is built as well as fencing to secure the airport property
• $2.3m for the completion of the Head Office Building in Providenciales which will improve the working space for staff. The purchase of furniture, fixtures & equipment for Terminal and TCIAA building
• $4.5m for the construction of the Providenciales Control Tower and combined services building
• $1.2m for the procurement of an airside walkway canopy to accommodate the COVID 19 protocols that are currently in place.

Mr. Speaker, to ensure that our main airports are kept up to international standards and regulations, $12m has been allocated for maintenance on the runways at Grand Turk and Providenciales airports.

Critical reviews of the TCIAA Airport Master plan and the capacity of the major airports, in TCI underway. We will decide over the next 90 days on the development and design concepts, the ownership and operational structure appropriate to the needs of the TCI as well as affordability.

We must ensure that the space and facilities are adequate for domestic and international travel and can meet the demands of TCI’s vital tourism industry.

Mr. Speaker, North Caicos is on our minds. Discussions continue regarding the redevelopment of the North Caicos Airport.

We are looking at several development projects valued at over $130m over time.

Redevelopment of Ports

Mr. Speaker, our ports are important gateways into our country. The initiative to redevelop our ports started under the previous administration. We will refocus attention to ensure access to our network of ports is prioritized.

Improvement to the port at the Bellefield Landing in North Caicos is budgeted at $1.25m. The works will include the construction of a new boat slip at the port facility and improvements to the existing breakwater for use by ferries and private watercrafts.

When the work is completed it will make it safer for our boaters travelling between Providenciales and North Caicos.

Mr. Speaker, the South Dock Port in Providenciales is to be redeveloped at a total cost of 32 million dollars. 6.3 million dollars has been approved in this budget for the first two stages of the project.  Work will begin later this year.

The South Caicos Port which was damaged by hurricane Maria in 2017 will be rehabilitated at a cost of 1.25 million dollars. The works will begin in the second half of the financial year

Educational Facilities

Mr. Speaker we will continue the upgrade of educational facilities including bathrooms as we strive to improve the teaching and learning environment.

Digitalization and E-Government

Mr. Speaker, my government will transform the way we do business through digitalization and e-government platforms.

While some work has started, to take it to the next level, $2M has been allocated to begin building out the necessary support systems.

​With digitalization, a mandatory electronic ID card will give everyone a secure online identity to conduct business with the Government. It will be easier and more convenient to access government services and remit fees and taxes.

We will:

• fully digitalize our E-procurement and Contract Management systems
• Integrate the social security network, and the new revenue authority
• Establish an interoperable platform for policing border control, and other enforcement functions such as road traffic.

The online databases and connectivity among departments will help to streamline operations and create efficiencies.

Agricultural Development

Mr. Speaker, food security is critical to the wellbeing and health of our people.

The pandemic taught us that any interruption in the food supply chain can create shortages and food poverty. We must find ways to feed ourselves and cut our dependency on imported food.

We promised that we would invest in food production.

Mr. Speaker, our first order of business is to upgrade and develop a national nursery at Kew Farm in North Caicos. We allocated $1m dollars to upgrade the nursery and provide grants to farmers.

We will also establish an inspection facility for agriculture in Providenciales which will reduce the biosecurity risk at the international airport.

Enhanced Service Delivery

My government will continue to invest in the Public Service. We will ensure that that workers have the necessary tools to carry out their duties in an effective and efficient manner.  We will ensure that there is a reliable ambulance service on all islands.

Departments will be equipped with furniture, equipment, and vehicles to carry out compliance activities where necessary.

Mr. Speaker, there are community enhancement projects for each island. We are investing in projects that will improve the lives of the people and make them safe.

.

GRAND TURK

1.5m - Water Storage Distribution Facility

880k – Mechanical Workshop

432k – Sports Complex and Shelter

350K – New Block -High School

NORTH CAICOS

1.3m – Technical block- Raymond Gardiner High School

1.1m – Art Block and Furniture

300k – Department of Environment and Coastal Resources (DECR) Lab

SALT CAY

650k – Reconstruction Matthew Canal

SOUTH CAICOS

650 k – Reconstruction Harkless

400k – furniture

PROVIDENCIALES

6.5m – South Dock Port

2.5m – Training Academy

2.5m – new primary school

760k – Enid Capron Primary School

695k – Installation of water lines

400k – Ianthe Pratt Primary School

200k – Pond, Five Cays

200k – DECR Labs

ESTIMATES OF REVENUE AND EXPENDITURE 2021

The Estimated expenditure is $342.9m. This is a 2 percent increase over last year and 9 percent over the roll-forward Estimates.

• $304.2 is for recurrent expenditure – the day to day expenses such as wages, goods, and services
• $11.7m for non-recurrent expenditure; and
• $27.0m in capital development.

In addition, The Infrastructure Fund will support $4m in projects. The Estimates will be funded from existing revenue streams.

• Estimated Revenue is $274.5m.
• $273.1m represents the Recurrent
• $1m in Grants from External Donors (CDB -$750k)
• $0.4m from Capital Receipts

The projected operating deficit of $69.5m will be funded through debt financing.

REVENUE /REVENUE MEASURES

Mr. Speaker, while we are pleased with the V shaped recovery, we are aware that our economy can have serious fluctuations.

Much of our revenues are linked directly or indirectly to the tourism sector, which is most seriously impacted by the ongoing pandemic.  A conservative approach has been used to prepare the Estimates of Revenue based on the uncertainties.

The revenue forecast for the FY 2022-23 assumes that the tourism arrivals will return to pre-COVID-19 conditions. The following years are projected to grow by 3 percent as global travel returns to normal. 

The TCI is a luxury tourist destination that attracts celebrities and affluent travellers.  We believe that once travel has normalized the destination will begin to operate at maximum capacity immediately. 

There are currently over four thousand seven hundred rooms available on the islands.

The projections show that the tourism related taxes will reach 80 percent of revenue collected for the pre-covid period of 2019-20.

• Import and Custom duties – forecast at 88.7 m
• Hotel and Restaurant Tax -64.9m
• Work permit and Immigration Fees – 25.4m

Stamp Duties on land transactions will continue the robust performance from 2020. Projections show that they will continue to outperform previous years reaching $45m this year - approximately 36 percent higher than last year.

A better than expected performance will reduce the reliance on debt financing to support the estimates.

 EXPENDITURE ESTIMATES

The Estimates continue to prioritize citizens’ security, health, and education. 

Allocation by Ministry (Excluding Capital Expenditure)

Health and Human Services

The Ministry of Health and Human Services will account for the largest portion of the estimates with $81.4m (23.8%). Included in the allocation is funding to support:

• Management of the COVID-19 pandemic and the vaccination programme
• Oxygen generation
• Fencing of the solid waste facilities
• Funding for the treatment abroad programme and the indigent population.

Education, Employment Services and Sports

Our investment in early childhood, primary, secondary, and tertiary and vocational education is $40.3m accounting for 11.8% of government spending.

Our priorities include:

• Maintenance of recreational/sporting facilities -$300k
• Integrating the TVET with the Community Colleges -$800k
• Transport by school bus and security services for secondary education -$1.45m
• Early childhood education - $115k

Police

Allocation for the Royal Turks and Caicos Police Force is $30.2m (8.8%).

• $3.6m is allocated for the SIPT
• 500k is provided for ballistic vests to increase the protection of our officers
• 5 million has been allocated to improve IT Command and control system and radio control for all islands over the next 3 years

There are 70 vacant positions in the RTCPF and a recruitment drive will begin to fill as many as possible in this financial year.

Ministry of Physical Planning, Infrastructure and Development

Physical planning, Infrastructure and Development is allocated $27.0m (8.0%). New allocation will facilitate:

•  Fiscal policy - economic stimulus (works programme)- $8.3m

The allocation will allow for the planning department to be outfitted with additional development control inspectors. $450k of the allocation will assist with the infrastructural adjustments required for the reopening of schools

Ministry of Finance, Trade and Investments

The Ministry of Finance Trade and Investments gets $20.1m (5.8%) and will support among other areas:

• Offshore and Development Finance - $1m
• E-governance (administrative charges) - $500k
• Formation of the Revenue and Statistical Authorities -$325k
• Contribution to the Special Development Fund (CDB) - $778k
• Seed funding for the Credit Union -$250k

Statutory Charges

Mr. Speaker 35 million dollars has been allocated for statutory charges (excluding capital expenditure).

The new allocations include:

• 45m for Property acquisitions
• 2m for Terminal benefits for civil servants
• 3m for Contingent allocation for Claims against Government $1.3m

There is a $5m Contingency Fund for urgent and unforeseen circumstances - $1.4M for Disaster Risk Insurance.

The Ministry will also focus on Exchange of Information for Financial transactions. This will enable us to:

• Satisfy our obligations to our Treaty Partners on a timely basis.
• Develop, establish, and maintain operating procedures in accordance with international standards.
• Facilitate sharing of experiences and best practices to combat tax evasion –FATCA

In addition, the Ministry of Finance will focus on:

• Green budgeting to comply with international standards; this means that all budgetary decisions must consider the impact of climate change.
• Trainers from the Caribbean Regional Technical Assistance Center (CARTAC) will begin training MOF staff in

We will strengthen programme performance budgeting. The goal is to tie allocations to the performance of ministries, improve accountability and benchmark performance of ministries. CARTAC will provide training in setting up a monitoring and evaluation system.

Mr. Speaker, in the People’s term, there must be accountability and value for money.

Modernizing Revenue Management System.

Mr. Speaker, I have given an overview of what we found, the fixes we made and the many achievements over the last four months.

As you know, the election was delayed and that has led to a rushed appropriations process which was only completed today.

I thank the members of the Appropriations Committee, clerk and everyone who worked long hours to complete the process.

The Revenue Department has been resilient as it dealt with the demands for more money to deal with the pandemic.

As we move towards the introduction of an online portal for the migration of Business Licenses to e-services certain applications and payments are now being processed online.

The Revenue Department in collaboration with Caribbean Regional Technical Assistance Center (CARTAC) developed a Compliance Risk Management Strategy.

The proposed programs are designed to enhance compliance, enforcement and streamline the functionality of the Revenue Department.

Ultimately, we hope to foster greater voluntary compliance and a better relationship with taxpayers.

We hope to improve (i) Registration; (ii) Timely filing of tax returns; (iii) Reporting of complete and accurate information; and (iv) Payment of taxes on time.

Mr. Speaker, the Department has reviewed the Ordinances which it administers.

Recommendations for the short to long term as well as legislative changes have been approved and will be implemented in this 2021/22 Fiscal Year.

The transitioning of the Department from a direct Government department to a Revenue Authority is a critical undertaking towards a modern tax administration. It is anticipated that the Revenue Authority will be operationalized in the next 12 to 18 months.

CRIMINAL JUSTICE REFORM

Mr. Speaker, crime prevention and the administration of justice are critical to good order and a well-functioning society.

We are committed to supporting a fair and effective criminal justice system. We will work with key stakeholders to establish a Crime Prevention and Criminal Justice Committee. The purpose is to undertake periodic reviews on the levels and types of crimes, crime prevention and the effectiveness of the Criminal Justice System.

The Committee will also explore ways to bridge the communication gap and improve the relationship between the Public and the Police Force.

Mr Speaker, we must rebuild the trust between the public and the Force. We will begin plans for a purpose built Judicial Complex which is to be built in the FY 2022-202. While we believe in due process and punishment for crimes, we are big supporters of rehabilitation, alternative dispute resolution, alternative sentencing and mediation.

We will build a new block at HM Prison, where the emphasis will be on rehabilitation programmes. We have funded a new rehabilitation rogramme to introduce electronic monitoring device so the court can make orders for alternative sentencing outside of the Prison.

When they are released after completing their sentences, inmates must have skills that enable them to find meaningful work.

Investment in Law Enforcement

2 million dollars is being spent to acquire property, develop the framework and programs for the training of law enforcement personnel. This is a priority.

This National Security Training Academy will provide ongoing training for Police Officers, the Military, Customs, and Immigration Officers. It will facilitate recruitment and training of the best candidates our country has to offer and rebuild a positive image of these various bodies.

Immigration and Border Services

$13.9m (4.1%) will fund Immigration and Border Services.  The allocation for the Customs Department and Repatriation and Detention is $6.1m. 

100 thousand dollars is being provided to acquire new vehicles for the immigration service. Security cameras are to be installed at the gates at the airport in Providenciales.

GOVERNOR’S OFFICE

Allocation to the Governor’s office for the Bodies of Good Governance – Integrity Commission, Internal and External Audit, Elections Office, Human Rights Commission, Complaints Commission, Financial Intelligence Agency accounts for $7.3m or 2.1% of government expenditure.

NATIONAL SECURITY SECRETARIAT - Defense

The National Security Secretariat will be allocated $1.9m (0.6%); $1.4m supports a Contingency Military force formation.

OFFICE OF THE PREMIER

Allocation for the Office of the Premier is $3.4m (1.0%). 

The Strategic Policy and Planning Department is being transferred from the Ministry of Finance to the Premier's Office.

Mr. Speaker, it is no secret that we lack the capacity to efficiently manage projects and to get the best value for money.

$1.3m is earmarked for a Policy/Program Management & Implementation unit. The unit will support all Ministries throughout TCIG to:

• Build capacity to effectively scope projects and programs
• Provide life-cycle costing
• Monitor and evaluate frameworks; and
• Improve key performance indicators to measure results

Institutional strengthening programs will be designed to meet the skills and capacity needs of the staff of all ministries.

The unit will be supported by external consultants for a period of two years. There will be a unit head who will be supported by analysts in the areas of tourism, education, healthcare, citizen security, migrant sector, and infrastructure.

To ensure the long-term sustainability of the Unit, staff in TCIG will be trained to take over the Unit after the term of the consultants ends.  Manuals, guides and other materials will be developed as part of the institutional strengthening programme.

Home Affairs and Transportation

Allocation for Home Affairs and Transportation is $18.7m (5.6%).  The ministry will focus on utility regulation, community development and to bolstered communication activities.

Social Welfare allocation is $4.0m.  The allocations for home-help increased by 40 percent and welfare benefits increased by 100 percent.

Tourism, Agriculture, Fisheries, Heritage, Religious Affairs and Environment

The allocation for the Ministry of Tourism is $13.0m (3.5%)

• $1.5 million for marketing of the destination and the establishment of the DMO
• $1m to redevelop agriculture
• $500k to manage the COVID-19 Travel portal.

 

The Rule of Law – AGC, Judiciary and DPP

• $17.4m (4.1%) is set aside for the Legal Sector to include the AGC, Judicial Administration, and the Department of Public Prosecutions’ Office.
• Of this amount, approximately $5.1m will pay for defense related expenses in the ongoing SIPT trials.
• $500k is allocated to an ongoing arbitration and $700k to civil recovery.
• Plans will begin this financial year for the construction of a purpose built court complex in 2022/2023 in the amount of $3m.

House of Assembly

• Allocation for the House of Assembly is $3.4m (1%).

The budget will continue to support:

• Performance-based increments to civil servants.

• Offer tertiary education scholarships to students and civil servants targeted at reducing the number of imported skills into the country.
• The updating of the curriculum at all levels including more solutions for adult education. Mr. Speaker, a Skills Audit has found that the TCI needs to increase the number skilled adults to address the current shortage.

• Continue to encourage and support innovation of small business by issuing government grants to MSMEs.

• Accommodate local and international travel
• Professional and consultancy services
• Utilities and communication expenses - $6.8m.
• Rental of buildings to increase space by 10 percent to accommodate social distancing requirements and allow civil servants to operate in a safe environment.
• Maintenance: $10.m, will see a 7.5 percent increase. This will cover general maintenance of government facilities including roads and other infrastructure.

PUBLIC DEBT

Mr Speaker, the Constitution sets out many general principles for public financial management. 

These principles demand that the Government after public consultation in the Islands, formulate a framework document stating its principles of public financial management. It sets: (i) limits on levels of public debt relative to public revenue; (ii) limits on debt service costs as a proportion of total public Expenditure; and (iii) levels of reserves relative to public Expenditure.

The Fiscal Framework Document (FFD) has been agreed with the Secretary of State. It states the pre-requisites for new borrowing which must be met.

In exceptional circumstances, different arrangements must be agreed on in writing between TCIG and the Secretary of State.  The Government must demonstrate that it has enough surplus operating cash flows to fund the additional debt service costs.

Mr. Speaker, the public purse is being protected.

Borrowing requirement

Mr. Speaker, we will have to borrow, to fund revenue shortfall brought on by the pandemic.

We expect the cash surpluses to dwindle monthly, even though the burn is much lower now than at the beginning of the pandemic. We expect to borrow in FY 2021-22: $60 million; FY 2022-23: $20 million; and FY23-24: $20 million, - a total of $100 million over three years. 

Discussions have not yet been held with potential lenders; however, the TCIG plans to refinance its existing $80m (so far undrawn) credit facility with Republic Bank with a new loan package adequate for its anticipated funding requirement over the next three years. 

Given this relatively low level of borrowing (in absolute terms and against both GDP and revenue) TCIG will probably opt for bank loan funding rather than issuing a bond. 

The debt package should be flexible to accommodate the wide range of potential fiscal outturns, i.e. allowing adequate headroom for shocks, or a worst-case scenario, but also flexibility to pay down loans should the recovery exceed the projections.  

DEBT SERVICE

Outstanding Public Debt - $838,769.   Less than $1M Mr. Speaker.

The Government has been compliant with the principles of responsible financial management ratio and forecast that debt servicing will remain below one percent of GDP in 2021-22 and 1.35 percent in 2021-22. 

Even in the face of the pandemic the government has managed to control public debt. Unprecedented fiscal performance for a tourism dependent country. 

CLOSING

Mr. Speaker, I will end this presentation as I began.

This is the People’s Term.

The top ten allocations in this budget are meant to send that message.

• Public Services - $122.9m (36%)
• Health, $75.0m (22%)
• Public Order and Safety -$54.7m (16%)
• Education - $36.9m (11%)
• Economic Affairs - $20.9m (7%)
• Social Protection – $15.8m (5%)
• Environmental Protection -$7.2m (2%)
• Housing and Community Amenities $1.8m (1%)
• Recreation, Culture and Religion - $4.6m (0.5 %)
• Defense - $1.9m (0.5%)

Mr. Speaker, from my reporting today, you can see that the TCI is doing better than expected. In many areas, we are outperforming forecasts.

I feel a surge of optimism. There is a renewal of energy among our people. This is also an opportunity to give our people a reset.

Under my leadership, I will not allow the neglect of the last fifty years to define our future.

I say to our people, you have spoken loudly and powerfully about the change you want to see. Our first obligation is to serve you, protect you, and defend your rights.

Every Islander deserves to have a better standard of living, quality healthcare, a good education, and a safe and healthy environment.

No more will you be left out of real participation in the economic rewards of this country.

We are working together with our communities. We are working together with our private sector; and we are working together with all our stakeholders.

Once we work together and put the people at the centre of our policies, you will see and feel the change.

Our hopes are high. Our faith is unshakable, and our strength is limitless.

To every Turks and Caicos Islander from the street vendor, the cook shop owner, the teacher, the janitor and the doctor, no matter who you are I extend my hand to you.

Walk with me, dream with me and Work with me to build a prosperous and safe Turks and Caicos Islands.

My fellow citizens, together we will restore hope, reclaim our rights and dignity and above all set the country on a path of economic growth and prosperity.

This is your time.

Thank you and may god bless our country and all our people.