2003/2004 BUDGET - REFLECTIONS

    29 June 2003 - For some years now I have not been going to parliament to listen to anyone. Fellow Dominicans keep believing that I have some intelligent comment to make each year about the annual budget. This time around, to ensure that their belief be not wasted, I went home and made a determined effort to listen to the Budget Address and a couple days later to the Response from Hon. Edison James.

    Somewhere in mid-speech the Hon. Prime Minister, many others and so much else were rudely interrupted by a sudden cut in electricity. I know not when power was restored. But I obtained a copy of the address and read it. Not the least of its virtues is the brevity of the Budget; 31 little pages. I have long come to lament that most black politicians talk too much and achieve too little.

In my opinion the Prime Minister made his case with little difficulty. Facts are stubborn things. All of us knew the facts of the case for some time.But this is not to say I have no queries. Here are a couple of examples.

  1. First, let us look at page 11: "… mortgage interest rates have been reduced over the past few months. The banking community reports that this reduction has not produced a noticeable increase in mortgage loan applications. While a reduction in interest rates is very much to be desired it is possible that the positive effect on construction activity may be exaggerated."

        I believe that anticipated positive effect could not have been realized because of (i), high unemployment and increasingly more of the same; and (ii), lower wages and threatening more of the same. The banks themselves would be eager to turn down mortgage loan applications in these circumstances.

  2. Second, we read at page 19: "Government has taken action to improve collection of tax arrears. The Inland Revenue Division is in the process of implementing reforms intended to strengthen and enforce tax legislation regarding the powers of the Comptroller. New tax commissioners have been appointed … and are expected to take decisions on long outstanding cases. A magistrate has been appointed and a new magistrate's court opened to give priority to Inland Revenue cases."

        In my opinion, the Inland Revenue Division always had draconian powers. I am unclear why there is a requirement for tax legislation to be strengthened. Admittedly, law should be enforced: those who owe taxes should be made to pay them. But there is another consideration.

        The Ministry of Finance - not necessarily the Inland Revenue Division - takes too long to make decisions in relation to settling tax matters. Often, officials do not respond to, or even acknowledge correspondence from suffering taxpayers. Furthermore, in the recent budget address, the P.M. acknowledged owing millions in unpaid invoices to tax payers. It seems a reasonable and honourable method of settling debts, viz, for government and the tax taxpayer to offset or exchange cheques and settle mutual receivables and payables. I submit, if decisions cannot be made on such pedestrian, straight forward matters, how can government and its public servants respond to critics who say that they cannot run the country?

  3. Finally, if there are measures in the budget designed to create jobs, and to foster economic growth, I would welcome some indication, some approximation of the number of jobs expected to be created, and how many rookies would join the taxpaying community.
    I made some notes from response of the Opposition Leader and appended my own queries. Before sharing them let me comment on CDC, as an equal opportunity "Investor." There was a power outage while Mr. James was speaking just as there was one when Mr. Charles was speaking. This manifested an equal sharing of its inefficiency between the government and the opposition. I went to my vehicle to continue listening to Mr. James' contribution.

    When his address was over I called Domlec and said: Good morning, and God bless Queen Elizabeth, kindly advise me when shall power be restored at Fortune? The Domlec employee asked me when did the power "go." I said it was about half an hour ago. He said that the power would be restored in four (4) hours. About 20 minutes after his assurance, happily, electricity was restored.

    There was an awful ironic edge in the proceedings when Mr. James appeared to be making some appeal favourable to "old friends" investors CDC and Cable and Wireless (C&W). He only meant to score a political point against the government, but we have to be careful; some of these things do back-fire.

  1. Cable & Wireless did not like Hon. Minister Earl Williams because he was among the pioneers of telecoms liberalization. The company resisted the effort and delayed the process for as long as it was practicable. Now with the advent of liberalization, I understand that C & W makes more money here than ever before!! We must wise up and make such corporations pay their share of fair taxation. When last was Cable & Wireless subjected to a tax audit? Or are we petrified by their Whiteness, as usual?
  2. I define profit as the reward that business people should earn for having taken risk. Dominica guaranteed CDC a profit of 15%, however inefficiently CDC performs. This means CDC is taking no risk. Profit without risk is a contradiction in terms. Electricity, as does telephone, touches every life in Dominica. So we all pay the price. Now the minority shareholders of Domlec are complaining that the retained earnings in the balance sheet of the company is so small because many more millions of dollars are transferred abroad to CDC by way of "management fees."
    In light of all this, we all have to be careful who we support, when how and why, or run the risk of being accused of taking positions, however unwittingly, of being "anti" our own people. Since Mr. James is not anti - people, he should pinch himself next time and recognize that such little political points are simply not worth it.

    Mr. James did not offer his own receipts and payments budget but he made certain recommendations and observations including: -

    Here is my personal position. Our ancestors had that unassailable proverb: that "Commonsense make before book." Whether you hold a doctorate or have only your birth certificate let us agree unanimously as follows: -     If we agree on the above, we have little time to continue to disagree on the solutions. Assume for example, that by constitutional means, tomorrow, another administration takes office. Where do we get the monthly $8 million to pay salaries?

    Answer me that! And since all your constituents are not sitting idly by waiting to be fooled, please ensure that the numbers add up.