The Tribune

By LYNAIRE MUNNINGS

Tribune Staff Reporter

lmunnings@tribunemedia.net

WHILE acknowledging the increase in government revenue, Economic Affairs Minister Michael Halkitis said optimism in the country’s economic growth should be tempered with discipline.

During his contribution to the mid-term budget yesterday in the Senate, Mr Halkitis promoted the upward trends of the country’s revenues, highlighting the improvement in loan delinquencies and continued “healthy” number of foreign reserves.

However, while noting the growth in the economy, he urged caution to be demonstrated with optimism due to the nature of the country’s economy.

Yesterday, Mr Halkitis said during the first half of the fiscal year 2022-2023, the government’s revenue performance benefitted from rebounding economic conditions, therefore the total revenue surpassed the prior year by $124.6m.

“Mr President, during the first half of this fiscal year 2022 to 2023, the government’s revenue performance benefited from rebounding economic conditions, and strengthened collection measures,” he said yesterday.

“The total revenue has surpassed the prior year by $124.6m and a total $1.3bn for the first six months of the fiscal year. And this accounts for 44.9 percent of the budget forecasts.”

He highlighted the government’s revenue enhancement, as the Davis administration has exceeded pre-pandemic and Dorian revenues by 38 percent, in addition to the first six months of the fiscal year of 2017-2018, which accounted for 40 percent.

“And so what’s important about this, Mr President, is the fact that we collected 44.9 percent of the forecasted revenue in the first half of the year,” Mr Halkitis said yesterday during his contribution.

“That’s in comparison, if we look back at the fiscal year 2018-2019, which can be considered the last so-called normal fiscal year, for pre-Dorian, the total revenue collected during the same period accounted for 38.2 percent of the budget forecast.”

He continued: “So back in 2018, we collected about 38 percent. This year we collected 44 percent of what we forecasted, so it shows that our collection efforts, in terms of the collection, are improving and reaping bearing fruit.

“If we look back a year further, 2017- 2018, total revenue accounted for 40.9 percent of the budget forecast during the first six months of that fiscal year. So, this noticeable improvement in the collection rate is evidence we believe of the prudent revenue enhancement and administration strategies implemented by this administration to restore the country’s fiscal health, so we were collecting more in the first half.”

Mr Halkitis repeatedly emphasised that the government felt optimistic about its projections based on historical trends.

He said the bulk of the country’s revenue usually comes during the second half of the fiscal year.

The tax revenue collected thus far totaled $1.1bn, which is a $130m increase in comparison to the previous year according to Mr Halkitis. Additionally, he said that value added tax (VAT) grew by $54.2m compared to the previous year.

Meanwhile, opposition Senator Darren Henfield urged the government to “make haste” and decide on the fate of the National Insurance Board following much public discourse regarding the state of the fund.

He suggested the government make a final decision on whether NIB contribution rates will increase or not.

This ain’t take no rocket science, you have to increase the rate,” he said yesterday during his contribution in the Senate.

“It’s unpopular to do because when you govern from a position of populism, it’s difficult for you to make a hard decision, but there are some things you just got to do.”

He continued: “But there are some things you just got to do and if you see what happened to this country in the last 20 years you might as well make the decision because these people, they ain’t playing. Fire us, fire them, fire the next crew, so make the necessary decisions.

“Do the job that you were elected to do, you can’t just sit down and let NIB run out of money, you can’t do that, you have to make the tough decision. Have to make the tough decision!”

He pointed out the irony of the fund being “run aground” during the country’s jubilee year, asking that this be used as motivation.