CONCLUDING REMARKS BY THE PRIME MINISTER
THE HON. LESTER B BIRD AT THE DEBATE IN PARLIAMENT
OF THE 2003 BUDGET
ON 11TH APRIL 2003

I rise Madam Speaker to make the concluding remarks of my Government at the end of the debate on the Budget for 2003.

Opposition has provided no alternative to Budget
In doing so, Madam Speaker, I have to draw attention to the fact that the Opposition has not provided this House or this nation with any alternative to the Budget we presented.

Not once have we heard any Representative on the other side mention what his party would do if it were in office that is any different from the policies and programmes we have set out.

In short, the Opposition has failed to produce an alternative Budget and has again demonstrated to the nation that it is bankrupt of ideas and is floundering in the wilderness.

We did hear a recitation by the leader of the opposition, the member for St John's Rural West, of some matters in last year's Throne Speech that were not implemented in the course of the year. He made no mention of the myriad things we did.

Frankly, one of them is quite serious, and is worthy of immediate response.

Lands programme will be implemented immediately
It is the matter of lands for public servants. My Government did state that "one hundred acres of land will be set aside for purchase by public servants including Police. Nurses. Teachers, Firemen and Prison warders who wish to build a home". We said, we "will establish arrangements by which these public servants can purchase land over a specified period, making monthly deductions from their salary."

This has not happened.

In this House, I am now giving the Ministry of Agriculture 30 days in which to begin to implement this programme, and ninety days in which to have it operational.

If in 30 days time, I do not receive a report that implementation of this programme has started including hiring private surveyors to survey the lands, I will take control of this project into my own Ministry and oversee it myself.

In the Throne Speech, we had also said that a further 100 acres of land would be identified to continue the "Land for Youth" programme which began in 1999 and which has helped to empower the youth of our country by giving them a stake in its future.

I also want to see the lands surveyed and ready for this purpose, and I am applying the same deadlines for the start of this programme, before I take appropriate action to ensure that it is done.

Still on lands, we also undertook in the Throne Speech last year, to set aside lands for residential tourism. We made the point that "similar developments have taken place in Barbados, Jamaica and The Bahamas and they have resulted in large scale employment for locals in the service industry, expanded sales to the business community for the supply of goods, and increased and sustainable revenue to the government from property taxes".

Again this project has been delayed because of the failure to survey and earmark appropriate lands.

This project is now tagged with the same deadlines for start-up, and it is under the same warning that, if it does not begin, authority for its implementation will be taken under the Office of the Prime Minister.

Lands contribution to Budget deficit
Madam Speaker, we had earmarked 400 acres of land for sale, 300 of them were to be sold to our own nationals and 100 for residential tourism. The irony is that had this been done, we would have realised approximately $90 million in revenue to the Treasury.

That sum of money would have been sufficient not only to clear our deficit in this Budget of $65 million, it would have provided us with a surplus of $25 million.

The Honourable member for St John's Rural West can rest assured that we will pursue the distribution of these lands as we intended to do for the benefit of our people and the enhancement of our economy.

Half-Moon Bay Workers will be paid
The member for St John's Rural West was also right that, in the course of the year, we did not introduce to Parliament The Half Moon Bay Hotel Severance Pay Act and therefore we could not meet our promise to pay the workers who were dismissed by the then owners of the hotels.

What he did not tell this Honourable House and the nation is that the Union with which he is intimately associated - the Antigua Workers union - was directly responsible for this delay.

When we announced our intention to pay the Half Moon Bay workers, the AWU insisted that the same facility should be extended to all other workers who had had similar experiences in the hotel industry.

In other words, the AWU wanted us to pay all severed hotel workers even though the Government had no responsibility for them whatsoever.

Despite this, we agreed to look at the figures to see whether, even in the strained financial circumstances, something could be done.

The AWU undertook to submit an estimate of how much it would cost to pay all the workers so affected. To date, the AWU has made no submission of any kind. Not one submission of any sort.

Yet, the former head of the AWU, has the temerity to accuse the Government of reneging on its promise.

Madam Speaker, that game is now over, and the member for St John's Rural West is full exposed.

Government has no obligation to pay the Half Moon Bay workers.

This is an obligation, owed under the law by the then owners, who collected the insurance money after Hurricane Luis and for 8 long years have not paid the workers a cent.

Nonetheless, we said that the workers are our people, our kith and kin, and we would ensure that they did not suffer from the exploitation of the then owners of the Half Moon Bay Hotel. We undertook to pay them and recover the money from the sale of the property.

We were foolish enough to believe that the AWU was acting in good faith when they made their approach to us; we now see that it was nothing short of a set-up.

In the circumstances, the Attorney-General will ignore the AWU proposal, and will prepare the necessary legislation immediately and bring it before this Honourable House for passage, so that Government can meet the payments to the Half Moon Bay workers. This will be accomplished within the next three months.

Selling Half Moon Bay
Madam Speaker, the member for St John's Rural West chose most unfortunate language in terming the reference in the Budget to the sale of the Half Moon Bay hotel as "huckstering". His Deputy, the member for All Saints East and St Luke's, joined him in this.

It would be educative for both gentlemen to know that the International Monetary Fund in its report of March 2003 on the OECS countries have urged all our member-governments, in the context of the global economic slowdown to privatise state-owned assets to meet their obligations.

When the government compulsorily acquired the Half Moon Bay property, we did so because for seven long years at the time, the owners had left fallow and unproductive a prime tourism location.

The beaches and adjoining lands of our country are our prime assets. They are to us what oil is to the Middle-East. Just as no one can afford to leave oil fields unexploited and unproductive, we could not afford to leave Half Moon Bay bare.

Our objective was to make the property productive for the people of Antigua and Barbuda. We wanted it to provide employment, pay taxes, earn revenue and enhance our tourism product as a whole.

To do so, it was always necessary that we should sell the property to a serious investor with the proven resources to develop a high quality property. I am pleased to say that we now have three such potential investors. Saul Kerzner of South Africa's famous Sun City and Atlantis at Paradise Island in The Bahamas, Mr William B Johnson founder of Ritz Carlton Hotels, and Mr R Allen Stanford whose investments here are already well known.

We hope that the legal delays will be completed this year and the property sold to the investor who puts up the best and most sustainable plan for the Half Moon Bay property.

What could possibly be wrong in using the proceeds of our assets to fund the needs of our people?

Royal Antigua Hotel
We argued in the Budget statement that we would also use the proceeds of a sale of the Royal Antigua Hotel to finance part of our deficit.

Again, this is a formula of privatisation that is encouraged by the International Monetary Fund particularly in the difficult international economic circumstances.
The member for All Saints East and St Luke's claimed that if we received $20 million for the hotel, we owe a figure which he placed wildly at $500 million. Therefore, he says, the proceeds cannot be used to pay down the deficit this year; it would be dissipated in debt payment.

Apart from the fact that the debt owed on the hotel is wildly exaggerated, the member displays a lack of knowledge of these matters.

The fact that an asset is sold, does not mean that the proceeds have to be used to pay down debt immediately. The debt with the Italian Export Agency would be paid over a long period, as much as 30 years. Therefore, the proceeds of the sale will be immediately available for use by the Government to meet current obligations.

Sale of Land in Airport area
The member for All Saints East and St Luke's also made much of the land that was sold in the airport environs to the Stanford Group of Companies, headed by R Allen Stanford.

He suggested that at $65,000 per acre the government undersold these lands.

In making his statement, the member misses the point that the Stanford Group will be investing $265 million over the coming year in developing various projects on those lands. The reality is, therefore, that instead of having empty and unproductive lands in government ownership, earning nothing for the country or the people, those lands sold for $65,000 per acre, will create employment, produce revenues for the country, and enhance the entire area for the benefit of the country as a whole for many decades to come.

The price at which the land was sold to the Stanford Group was no give-away, given the huge amount of the investment that is being made on it.

The Government would sell unproductive and marginal lands at the same price if any other person makes the same level of investment.

Once the investment is made, it becomes part of the national assets of the nation. It cannot be picked up and taken away.

The National Debt
The member for All Saints East and St Lukes claimed that our national debt is $2 billion. It is, in fact, less than $1.7 billion. He characterises this as a burden on the population, even on the baby most recently born.

In his preoccupation with debt, the member displayed a lack of understanding of the instruments that a government uses to finance its budget deficits and to invest in the capital projects necessary for the economic and social development of a country.

I have pointed out before that there is nothing wrong with debt in itself. It is the capacity to manage the debt that is the issue.

The most indebted nation in the world is the United States of America? Is it weak and powerless as a result? Are its people crippled under the weight of its debt? The answer in both cases is "no".

In the 2003 budget in the United Kingdom, the Chancellor of the Exchequer announced that this year the British Government will be borrowing £27 Billion, and over the next four years it will be borrowing £24 billion, £23 billion, £22 billion and £22 billion.

I mention these facts to demonstrate the point that borrowing and debt are legitimate instruments in the tool chest of a government's operations.

What is important is that the debt should be managed so that its repayment is on the most favourable and manageable terms. That is what I announced we are doing in this Budget. We will renegotiate the terms of much of this debt which was contracted at a time of high interest rates, and we shall seek to reduce the interest to today's market rates in order to save millions of dollars in interest payments.

Agriculture
The same member attempted to cast aspersions at me personally and at the Budget Statement delivered to this Honourable House because I did not specifically talk about agriculture. He imputed to me and my government little regard for agricultural production.

In his folly, he even drew attention to the fact that the US government heavily subsidises its farmers, and he touted this as some kind of virtue.

But, he misses the point that it is precisely because the US and several countries in Europe, particularly France and Germany, subsidise their agriculture heavily that makes any agriculture we can produce uncompetitive.

At the moment, the US can deliver vegetables and fruit to our market - even given the cost of transportation - cheaper than we can produce them.

The reasons are the very things he has identified but has mistakenly characterised as neglect on our part. The first is heavy subsidies by the US and European countries to their production, and the second is the high cost of irrigation in our arid country.

Contrary to his false assertion, my government is very keen to promote agriculture in niche products where we may enjoy either a captive market of some particular advantage. This is why we have focussed attention on melons, pineapple, tobacco and sea-island cotton. Studies have proven that we can compete in these products and we are doing so.
We intend to continue to develop these niche products in agriculture. But we disagree that we should invest hard-earned dollars in products which cannot compete and have no market.

We would remind him that the Barbados government has told its farmers to abandon sugar production, the market for which is all but lost because of have subsidies to European beet sugar production and the loss of a guaranteed price in Europe.

Should he also need reminding about bananas and citrus in the OECS, they too have lost their preferential market in the European Union , and that is why other OECS countries are now desperately following Antigua and Barbuda in turning increasingly to the development of services industries.

But, let it not be said that Government is not addressing agricultural needs. We continue to provide incentives to our fishermen and farmers, and we will continue to do so to promote the sector in relation to products which can compete. That is in the interest of both the farmer and the economy as a whole.

Call Centre - successful
Madam Speaker, the Leader of the Opposition made much of the guarantee provided by Government for the establishment of a Call centre. He called for a full accounting as if there was some attempt to conceal it.

The reality is that the first of the call centres failed not because the notion of its establishment in Antigua was wrong, but its management was weak. Once that became clear, government replaced the Operator with a seasoned firm Oak Holdings Ltd, which injected $10.8 million into the business and created 250 jobs. It is projected that, by the end of 2004, an additional 650 jobs will be created.

Therefore, the alternative employment programme is working and we full expect to build on the success achieved so far, to create many more well-paying jobs in the informatics industry.

Ownership of Hospital will be vested in MBS
The member for St John's Rural West also claimed that the government's promise to vest the ownership of the Mount St John's Medical Centre in the Medical Benefits Scheme has not yet been fulfilled. He is right, but not because the government has not sought to accomplish this.

The government is committed to vesting ownership of the new Hospital in the Medical Benefits Scheme and will do so once the Hospital is completed.

There is good reason to await its completion before the transfer of ownership takes place.

The MBS Board in compliance with a recommendation of the Commission of Inquiry had instructed the distinguished jurist - now the only Caribbean member of the International Criminal Court - Karl Hudson-Phillips to revise the legislation governing the Medical Benefits Scheme. He has done so, and the MBS Board and the Government are studying the revisions.

It is our intention to present the revised legislation to Parliament and to provide within it for the vesting of the ownership of the Mount St John's Hospital in the Medical Benefits Scheme.

We have been advised that there is no benefit to be derived from approaching this matter in a piece-meal fashion, and therefore we will do it in a holistic way.

$50 million from MBS - an offset of debt to Government
In his presentation, the member for St John's Rural West made much of the $50 million that has been shown in the Budget as a receivable to the consolidated fund. According to him, the Government has transferred the full cost of providing health care to the MBS.

This claim is nonsense. The sum of $81.8 million has been allocated to health in the Budget. Indeed, health gets the largest share of 13.05% of the total Budget. That $81.8 million will come from The Treasury and not from the MBS.

What is more the $50 million allocated from the MBS is a "paper" transaction not a cash transaction. It is arrived at as follows:

· In the preliminary reconciliation of the accounts between the Government and the MBS that has been conducted by the experts, it has been found that the government is owed in excess of $50 million. The final reconciliation is taking so long because of the lengthy period involved in the reconciliation. However, we hope that the final figures will be ready soon.
· Government has to pay MBS approximately $25 million per annum in contributions. We had undertaken that we would keep the payments current. Therefore, we propose to have an exchange of cheques with MBS for this year 2003, and the last year 2002. In other words, we will pay two years of Government's contributions including this year.
· The exchange of cheques, therefore, is merely a set-off of $50 million, until the final reconciliation of all accounts is completed.

MBS will be one of the largest financial entities
Contrary, therefore, to the idea that Government will "bankrupt" the MBS, Government will continue to pay the cost of health care this year from The Treasury and will reduce the liability of the MBS by $50 million making its balance sheet look much more attractive than it does today.

Further, when we vest ownership of the Mount St John Medical Centre in the MBS, it will have gained a very considerable and valuable asset.

So with reduced debt and increased assets, the MBS will be in a very advantageous position to raise funding on the commercial market for expansion and improvement of all the Health care facilities under its control. Indeed, it will become one of the biggest single financial entities in Antigua and Barbuda and it will be owned by the people of the State and controlled by them through the broad cross-section of representatives who now sit on the Board and will continue to do so in the future.

Absolving the Public Servants
Madam Speaker, the member for St John's Rural West attacked the public servants in the Ministry of Finance who worked long and hard on this Budget. He was joined in this by one other representative who sought to characterise them as having no minds of their own, and following slavishly the dictates of their political masters.

Let me absolve the staff of the Ministry of Finance. All of them are young men and women, new to their task but possessing an abundance of talent and training.

They were - none of them -"yes" persons. They worked as true patriots within the confines of the world's economic reality including our own.

Here is the simple, incontestable fact: 74% of government revenue is spent on wages, salaries, gratuities and pensions to public servants. The public servants represent almost 20% of our country's total labour force.

The only solution to that reality is to dismiss many of them.

My Government has made it clear that we do not support such an action. For, by doing so, we would commit a very large number of our population to a life of deprivation and poverty. We would also harm the private sector by reducing the purchasing power of the nation, we would reduce savings in the banks, and we would cause the economy to spiral downwards.

It is in that reality that the staff of the Finance Ministry worked. They are true patriots, concerned about their fellow man. They attempted to be as creative as they could in ensuring that the government does not have to dismiss workers.

The Honourable member for St John's Rural West should be told that last year, the government contracted PriceWaterhouseCoopers to conduct a review of the public service.

The review suggested that personal emoluments should be reduced to 25% to 30% of revenue. This translates to firing 3,500 people.

Even though it would result in savings of $75 million a year, my Government said no. We refused to commit 3,500 persons and their families to hardship and hard times.

The ECCB told us that the benchmark for the wage bill throughout the OECS should be 50% of recurrent revenue, representing a savings of $100 million a year. But it would have resulted in the loss of 4,000 jobs. Again, my government refused to do it. We would not put 4,000 people on the breadline.

Yet, if we did so, our financial constraints would be eased overnight. We would pay salaries and wages on time, we would service all our debts and we would finance all the infrastructural works that are necessary.

But, Madam speaker, we put people first.

We put your families, your friends, your neighbours and you first.

We refused to dismiss people.
That is why this economy has been kept buoyant despite all that is happening internationally. That is why our country has remained stable. That is why our people, including our business community, see less crime than many other places.

We have no apology to make for that.

No alternative by the Opposition
It is particularly telling that at no time did the members of the opposition address the real issues raised in this Budget.

Up to now we have not heard a single member of the Opposition tell this nation what he would do about the public service wage bill. Will they fire people? If so, how many? The 3,500 recommended by PriceWaterhouse Coopers or the 4,000 proposed by the ECCB?

And, if they will claim they will fire no one, then what would they do that is different from what this government is doing? We have not heard one - not one - constructive idea from the other side of the House. All that we have heard are loud voices ranting and raving in a dreamlike void.

They have no answers. They have suggested nothing. They have nothing.

Despite this critical financial situation, this Budget is not only free of any new taxes, it also gives tax breaks to the business community and the ordinary man-in-the-street to try to promote business expansion and more employment in the private sector.

Does the Opposition object to these tax breaks? Do they believe that we should impose new and more taxes to increase Government revenue? Are they advocating a return to personal income tax? And would they reverse our policy of lowering corporation tax?

They have not addressed this issue once. They have not offered a single alternative to our policies on lowering taxation to stimulate the private sector.

They have offered nothing, because they have nothing. No productive ideas, no constructive solutions, nothing.

Yet those are the two critical issues facing any government: the wage bill of the public service and tax incentives to the private sector to stimulate investment and employment.

Madam Speaker, despite all that the Opposition has said, the Budget presented to this Parliament remains the only realistic way to move forward.

The Government's Performance
Let us consider our economic performance despite all the financial constraints we face.
· Antigua and Barbuda is one of only two independent OECS countries that experienced growth in our economy last year.
· Our economy is predicted by the ECCB to grow by another 3.2% this year and 4% next year.
· We are the only country in the world which has experienced over two decades of continuous economic growth except for the calamitous year of 1995 when Hurricane Luis devastated the economy.
· Last year, we recorded an overall balance of payments surplus, according to the ECCB, of $21.4 million and we enjoyed an increase of 9% in our share of the ECCB's reserves.
· Net inflows of capital into our economy increased last year, again according to ECCB figures.
· In 2002, the liquidity in our banks increased, so that there is money easily available to the private sector for borrowing for expansion and development.
· Our rate of inflation in 2002 remained at just over 2%, which means that prices of goods and services, when taken as an average, hardly increased over the previous year.

Madam Speaker, look at what is happening in other parts of the world by comparison. And, I will not compare us with other Caribbean countries who are doing much worse, I will compare us with large developed nations:

Our jobless - our unemployed - are less per capita than the UK, the US, Japan and Germany. Over the last two years, 3 million jobs were lost in America, unemployment in Germany, France and Italy is about 9%.

Our rate of inflation at just above 2% is lower than their average of 3.5%

We combine low inflation with the lowest unemployment in comparison with many regions of the world.

Our economy grew last year by 2.7%, in Japan growth was 0.4%, in America just 1.4% and in the entire European Union area the average was 1.1%.

We have more people with greater savings in the Banks and the credit unions and cooperative societies than anytime in our history; more of our people own land and their own homes than anytime in our history; more of our people are employed than anytime in our history, our young people are better educated and have greater access to higher education than anytime in our history; our people earn higher wages than anytime in our history.

We also have better infrastructure - better roads, more sidewalks, more reliable utilities such as telephones, water and electricity than anytime in our history.

If there is one amongst us who can deny that - let him speak now and bring the proof of his claim. Otherwise, let all hold their peace and acknowledge that Antigua and Barbuda - this country we all love and hold dear - is better off today than it ever was.

This Budget's aim is to help make us better. It is not perfect; no Budget ever is. Many can find fault if they dig hard enough and many have. But, at the end of the day, this Budget maintains employment, boosts our private sector and preserves and protects the high quality of life we enjoy. What more could we want?

I am convinced Madam Speaker that our nation will continue to grow and prosper. The evidence is there for all but the blind to see.

We have but to set to the task together.