I note the statements attributed to the Governor and made during his Breakfast Press Briefing with Media Houses. I also note the firestorm that has resulted following a captioned release stating that “Perception corrected; UK not micro-managing TCI money and spending says Governor.” I further note the eagerness for supporters opposite to accuse my Government of lying and their willingness to not test these statements for completeness but to accept them hook line and sinker. There is now as a result of these comments made by the Governor, a new false perception adversely impacting my Government in favour of the UK. The Governor’s comments have opened the door for mischief that I am duty bound to address.
The new false perception is that we as a Government is able to spend our reserves and run a deficit Budget without UK scrutiny/approvals. Though not stated by the Governor, I have seen these statements made and am obligated to correct these erroneous perceptions that has now been created out of an effort to correct the British image within our Islands.
The Governor has not lied to the people of this country and neither has the Government led by me. But what has happened as we know it to always be is that he has told the side of those whom he represents: He is the Queen’s Representative within our Islands. It is for my Government to remind us of our side of the story; to remind us as a people of several truths that have been stated by me but conveniently dismissed by those who know the truth and unfortunately misconstrued it or manipulated it for those who do not know or understand the process:
We already knew this to be the UK’s Position. This is nothing new. It is important that I make this clear that the Governor has communicated what has already been evidenced and what we ought to know as a people would be the UK’s stance as it relates to our country’s “healthy” savings when other OTs such as Anguilla and British Virgin Islands will require more British support. It is in the British’s best interest to not have to worry about the TCI or to gift grants. The facts are the facts and can not change despite people’s accounts: The Supplementary sent to the UK for approval in December (and rumored by an elected member opposite to be rejected) was approved and it is evidence of the UK’s position now being clearly stated by the Governor - It was a deficit Budget drawing down on our “healthy” reserves.
My Government has through Town Halls and Interviews before this Supplementary told the people of this country that we were seeking to run a deficit Budget and to use savings to meet immediate needs and explained the process under the Law. The Supplementary approved by the UK in February took over a month to secure. This was necessary because the Constitution does not allow TCIG to run a deficit budget without its approval. The Supplementary which was debated by the House was a reduction Supplementary as we could not spend as usual due to our fallen revenues. The House of Assembly had to approve this.
Following the Storms, the Projects agreed in March 2017 had shifted in priority and headlining for this revised priority was school repairs and NHIB support. The UK’s approval was sought and received and no shifting in spending could take place without the House of Assembly’s approval. Therefore the reprioritized Capital Program was a part of the Supplementary Appropriation Bill and was approved early February. My Government had to receive two levels of approval under Law which we sought and received.
The Supplementary was fiercely debated and saw conflicting comments from the Party opposite where the Leader of the Opposition himself said that the timing was too late in the financial year and whilst we agreed that it was late, we saw the need to get started early on School Projects in particular recognising that we would have to be in a position to note them, take them to contract stage before the end of the year (Financial year – March 31st), so that the works can begin ahead of our already announced late Budget passage. The Leader of the Opposition despite saying this as it relates to time, he together with other members of his side kept asking for more Projects to be included. As explained and as known by them, the Bill could only be brought when approval was received from the UK and that as it was the end of the year, much more could not be achieved under the Procurement Process which required 6 weeks for Invitation to Tenders (ITT) and following approvals for Business cases. And even after Bids were received there was an evaluation stage that had to be undertaken. The Supplementary provided for $8m in School repairs which were covered by the CRIF but also $12m for National Health Insurance and other critical projects that we could not afford to defer for another year. These priorities were set out even ahead of the Debate in response to the Opposition elected member celebrating as it were the UK’s supposed rejection of the Supplementary request and included “… critical resources for the Police, funding for NHIP, repairs to Schools which can double as Shelters, funding to support the introduction of online payment to better secure payment of government revenues and enhance public service, funding to submit the critical work of the National Physical Development Plan, additional resources to support border control and planning enforcement activities among other critical projects and matters…” [Excerpt from Release issued in January 2018] Ahead of the submission to the UK, the process to its preparation was challenged at many points most notably the Governor’s clear position to have accounting officers determine whether the conclusions of a Capital Board Meeting called by me as Minister of Finance was acceptable to them. The Ministry of Finance Team did its best to move as quickly as it could and of course with the information available to them at the time. As anyone listening to the Debate would have heard me say that the financial outlook was different and that there was no need at the time to draw down on reserves to fund reprioritized projects and to fund NHIB by a further $12m.
Therefore we are fully aware that the UK has and would support our running a deficit budget and spending our reserves. Additionally the UK has stated over and over its support of our borrowing and have made several inquiries in this regard.
What I must say as a firm truth is that we are convinced that we would have to rely on our savings and loans to at the very least speed up reconstruction and possibly fund our own reconstruction. We have already retained CARICAID to prepare our Recovery Plan and hope to receive the document by next month. This Plan will identify the areas for funding in the medium to long term. I state clearly however that Schools and critical Government buildings at $10m and $16m respectively, remain priority for Government.
We understand and are not ignoring the continued call for TCIG to assist the over 4000 homeowners that need repairs or the approximate 400 who lost their homes altogether and who had no insurance coverage. What we find disingenuous of the call to use monies earmarked to repair Schools to provide less than what is necessary to those found in this category. We must also remember that the assistance received following Hurricane Ike came 7 years later through EU Funding. We also recall the help received from the UK then whilst CRIF monies had to be used to help meet TCIG’s monthly obligations. Whilst we are in a much better position, we are taking the careful approach to borrow against our reserves as we are not certain of the UK’s assistance in any other way than in the provision of the guarantee, the just over $1m dollars for Prison works and Radar repairs, upgrading and training: its constitutional areas of responsibility relating to national security. This may be made clearer following the submission of our Recovery Plan but not yet stated.
Now I address further truths that the Governor has not included in his comments but state clearly that it is not for him to, but for my Government who is duty bound to set out the full picture in my Government’s defense. I am duty bound to set out certain facts already shared but others now necessary to share given the firestorm of untruths and false perceptions created following his comments.
- I have already addressed that the fact that running a deficit budget and spending savings requires the UK’s approval first and then the House of Assembly’s and as such the new perception is incorrect.
- What the Governor has not said is that the UK has not engaged in micromanaging at its highest level but the Governor is involved in every process here and controls ( a meaning of micromanaging) through Cabinet all decisions, with the need for consensus (complete agreement of 7 elected members and the 3 unelected members) for anything to move forward. I must inform our people though that the Cabinet Minutes for the first time Noted the FSPS (submitted to and requiring UK’s approval ahead of the Budget) when historically Cabinet Minutes would show approval. This demonstrated for us a willingness to move the process forward on the part of elected and unelected members of Cabinet. I must however state though that for the first time I am advised, the UK had made or stated certain specific calls on the recurrent Budget for areas of its particular obligation and interests. I am pleased to report however that the FSPS has received conditional approval pending the submission of the Capital Program and the Recovery Plan.
- While the Governor has said that reserves took a long time to build and that they are necessary to borrow, he neglected to say why my Government wishes to retain the level of reserves at at least 90 days cash levels. Last year the Budget for the first time since the new stringent financial regulations did not have to be approved by the UK as in previous years. Any reserves/savings below the agreed cash level would see the UK having to approve the FSPS and the detailed Budget.
- What the Governor has not said is that there has been a call by his Office as to areas he wish to have funded and have already stated that the Budget can be difficult to agree even if our cash levels remain as is and there remains no need to submit the detailed Budget to the UK for scrutiny and approvals. He is still very much in the process and can as with any decision of Cabinet hinder or halt any process until he himself in full agreement.
- What the Governor has not said is that on three separate occasions: twice to London and more recently directly to him, I have had the need to raise the high and continuing annual costs of $9.1m to cover SIPT costs with $5m for legal aid and $4m for SIPT’s Team. TCIG would be able to do much more if we had access to this near $10m annually and I have suggested to the UK that should the UK assume these responsibilities and if done, the TCIG would be able to address areas of its interests, the Governors interests and critical areas also identified by the locally elected government.
Whilst the UK is prepared to have us spend more than we make and to spend our “healthy” savings, we must look at our financial position against this background:
Reserves are important for rating; important for loans; 90 days cash levels allows us to not have to get our detailed Budget approved or scrutinized by UK and from history we will perhaps have to fund the majority if not all of the recovery plan so we must be prudent until we have our Plan and know what the UK and others are prepared to do. The proposed Budget for 2018/19 is addressing the short term recovery efforts – repairs to Schools and Government Buildings while addressing the social issues, primary health care and national security issues. I welcome the UK’s Position but fiscal prudence does not allow such a simple approach to be taken.
Whilst there will always be a mistrust between the UK and TCI, the half report relayed and no attempt to further clarify only seeks to erode trust in such a critical partnership. But what I find more amusing than the flippant perception given by not painting the entire picture of the need for approvals at all levels is the fact that too many of our people of the TCI continue to believe reports only when it suits them. I encourage us again to learn about the workings of our country and not just scrutinize the words and actions of elected governments but all in authority especially those who are empowered by the Constitution.
The UK is involved every stage locally by the Governor’s role and so to say there is no micromanaging or local control is certainly incorrect. The current Governor, as many know nationally is involved at all levels even where neither of his predecessors has been under elected Government. Hence the perception out there that he is running the country. This is a perception he must feel compelled to correct by actions.
Hon Sharlene L Cartwright Robinson
Premier & Minister of Finance
The Turks and Caicos Islands