| Government says it will make quarterly financial reports | | Print | |
| Written by Richard Green/richard@fptci.com | |||
| Thursday, 02 June 2011 10:33 | |||
 The Turks and Caicos Islands interim government has announced that it will issue quarterly budget statements on its progress toward reducing deficit spending and increasing revenue, major milestones required for the U.K. to restore elected government to the country. “Setting and achieving a balanced budget is only the first step in restoring financial stability to (government),” the government said in a statement May 31. “We also need to exercise proper financial management in order to control revenue and expenditure, monitor performance against the budget, and report the results clearly, openly and regularly. “We have already made progress with this, and we intend to publish quarterly reports setting out actual income and expenditure against the budget and explaining any significant differences together with the action we are taking to correct them.” The government’s fiscal year began April 1, and the first report will be published in August. The government has been running significant deficits since 2007, despite boom years of growth in construction. “The public debt run up in a short period of time is equivalent to $12,000 for every man, woman and child in the Turks and Caicos Islands,” the government said in a statement that recounts the steps it has taken to bring the country back from the brink of collapse. The country was on the verge of bankruptcy when a Commission of Inquiry in 2009 alleged corruption in the elected government, resulting in the suspension of elected government and parts of the Constitution and the governor taking control of the country. While a Special Investigation and Prosecution Team has been digging into corruption allegations expected to produce criminal charges in the coming months, the interim government has enlisted consultants and U.K. support to dig the TCI out of a financial hole. “Bankruptcy has only been avoided because the U.K. government provided the financial support needed to keep the public sector afloat and now, through $260 million of loan guarantees, with the time and resources we need to tackle the dire fiscal legacy the interim government inherited,” the government statement said. The financing package will only pay off the country’s debts and cover two more years of progressively shrinking deficits, resulting in a surplus by fiscal 2012-13. The loan guarantees will not pay for new government spending or to reverse austerity measures already taken, such as the 10-percent cut in public service salaries in March 2010. The government is also trimming jobs and cutting waste and fraud in the public service payroll and pension systems, drawing the ire of the Civil Service Association that resulted in a one-day “sick out” that shut down the Providenciales International Airport on March 24. In addition to further cuts in government spending and improving efficiency and financial accountability, a new value-added tax will be implemented in two years. Meanwhile, new revenues include:
“We expect that most of these temporary measures will fall away, together with a number of existing taxes, when VAT is introduced in 2013,” the government said. Click here to read the government's full statement Click here to read the 248-page complete budget document Photo: Permanent Secretary of Finance Delton Jones
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