Parliament Speech by Hon. Asot Michael - Dec 2011

HON. ASOT MICHAEL M.P.

ADDRESSES THE PARLIAMENT

ON

THE 2012 Antigua and Barbuda Budget Estimates

December 13, 2011

The Parliament

Madame Speaker, I rise to make my contribution to this 2012 budget as presented by the Hon Member of City East The Minister of Finance on behalf of this UPP administration and as a result of the collective wisdom or lack of it by the members on the other side.

Shortly after March 12, 2009, we were told by the Finance Minister that Antigua and Barbuda’s economic condition could be described as being in a perfect Category 5 Hurricane. A set of conditions, seemingly unpredictable he said, had conspired to place our economy in mortal danger. Last week, we heard from the Prime Minister, the Member from Rural West, that an economic collapse was imminent in 2009. We were saved by Venezuela’s willingness to part with US$50 million dollars. That close, we were.

Two years later, on December 5, 2011, the hurricane has seemingly passed for the Budget is now captioned in language that declares it is “resolved to transform and determined to deliver.” Transform how? I ask. And deliver what?

The transformation of the fundamentals of the Antigua and Barbuda economy, during the recent past, began after March 2004 when the country moved from being a low-tax jurisdiction to a high-tax jurisdiction. The re-introduction of personal income tax, or as it was called, the establishment of a stabilization fund, came within months of ascending to high office, on March 1, 2005.

However, prior to March 2004, all of Antigua and Barbuda was told that by cutting out extravagance and theft, a new UPP regime could accomplish every goal set for itself and do even more with government revenues that totaled about $450 million dollars.  

Today, as we face 2012 and the government predicts revenues projected to exceed $700 million, the UPP regime has declared that even a near 100% increase over 2004 revenues will not be enough. $700 million in revenues are insufficient in 2012.

Additionally, those of us on this side of the aisle get the clear impression that the Minister of Finance is attempting to convey, to the listening public, that the challenges which the regime faces today were created for the regime by the past administration, prior to 2004. You raise taxes, you find more reasons to spend nearly twice as much as a former administration spent, and the hurtful outcome is created by an ALP administration. Incredible reasoning!

Madame Speaker let me be clear; the times are too tough, the people are too hungry, our institutions are too close to collapsing for me to engage in any esoteric analysis or point scoring, in my presentation. As a result, I am going straight to the concrete issues facing this country and the people of our beloved Antigua and Barbuda.

Madame Speaker, let us lay on the table certain fundamental facts which are indisputable:

Fact #1. Antigua and Barbuda experienced its third year of consecutive negative  growth, the worst performance in our history, including five hundred years of slavery, and, colonialisation.

Fact #2. Antigua and Barbuda entered into an IMFstructural adjustment programme, a programme designed to assist bankrupt governments who have no other options for surviving.

Fact #3.Antigua and Barbuda failed the IMF programme resulting in IMF with holding the latest draw down of 20M us dollars.

Fact#4.Social Security is bankrupt, spending out more than it’s collecting putting the people’s pension in jeopardy.  

Fact #5.The government of Antigua Barbuda lost its case on Half Moon Bay and now owes the company 175M E.C dollars for the property.

Fact #6. The UPP government owes Andrea Gutiérrez over $60M E.C dollars for unpaid sums for the runway expansion project. Madame speaker, did they tell this Honourable House the Government in an affidavit,  acknowledged this debt  on an airport runway project that was supposed to cost $50M U.S  and now will cost over $65M U.S to complete,  a whopping cost overrun of over $15M U.S.D.

Fact #7. Antigua and Barbuda is experiencing the most severe economic pain ever experienced by our people; unemployment is at its highest; business failure is at its highest; credit access is at its toughest; hunger, stress, desperation, child malnutrition, family fights, are all reaching epidemic proportions. Madame Speaker, this is the Antigua   and Barbuda we live in; this is the real Antigua where roads are muddy swamps, where light bills are so high that many now live in darkness,  APUA having cut them off for nonpayment. At the sole Public Hospital our people die for want of basic care and are charged exorbitant fees, where   recovering from an illness is now a function of an individual’s personal wealth and the roll of a dice.

 Madame Speaker, this is the state of Antigua and Barbuda. Fear stalks the land, hunger stalks the land, despair stalks the land, and the budget presentation by the Government has made it worse.

Madame Speaker, the Government has no credibility. Every plan they promise they have broken. Transparency, good governance, Madame Speaker they are dead,  reduced to empty campaign rhetoric to fool the people and use power as a passport to personal wealth. Where are the accounts not only for central Government but for the statutory bodies? Madame Speaker, No accounts for APUA for seven years! This government breaks the law with impunity; now law makers become barefaced law breakers.

So Madame Speaker, when this Government seeks to use the sickening juvenile excuse that it is the global economic conditions that is responsible for Antigua and Barbudan to be at the undertakers door, I ask, so then what is the solution? Stop the world, I want to get off! As Jim Reeves sang, “ make the world go away.”

Madame Speaker, it is time this Government takes responsibility for its actions, and the destruction of the Antiguan economy. Let us start there, if we do not accept what the problems are, if we do not accept the mistakes, the corruption, the waste, the incompetence, the errant stupidity, then we cannot ever start to solve our problems and change our ways.

So Madame Speaker, I and all my colleagues are not here to question this Government about the world conditions, you will hear throughout all the presentations both in this House and in the Upper house a simple request of this Government. Please account for the monies you have collected; the decisions you have made in spending; the missed opportunities, and the bad decisions made which have hurt this country and the people of this country. Madame Speaker, if we examine these questions in an objective manner the UPP Government has been a disaster and an embarrassment to common sense and good judgment.

Madame Speaker:

When the personal income tax was introduced, the regime established certain bands in Section 10, of the First Schedule, and certain income was not taxable. The Finance Minister has now declared that he “will be plugging holes” and that income which is currently exempt will become taxable in 2012. The regime will come back to Parliament in the New Year, probably on the seventh anniversary of the re-introduction of personal income tax, to extract more taxes from businesses in Antigua and Barbuda. Is this ever going to cease?

The Minister has indicated that he will be imposing taxes on allowances and tightening the rules on corporate profit so that the tax yield will be greater. The personal income tax is already yielding $35 million in 2011. The estimate for 2012 (appearing on page 5/blue pages of the Recurrent Revenue) will be $54,126,414. The so-called plugging of the tax-loopholes will cause an increase of more than 50% over 2011. How is such an increase reasonable?

 What does the Minister of Finance know that the rest of Antigua and Barbuda does not? All businesses in Antigua and Barbuda, at this time, are undergoing extreme difficulty in making ends meet. (Only the two funeral undertakers are doing well, I understand. The UPP has made death prosperous.) You will be collecting more than $49 million from corporate income-tax in 2012; what is the justification for squeezing nearly $20 million additional dollars out of business owners? The increase in the yield of the stabilization fund can only come from one source –owners. It will not be coming from employees; hardly any enterprise can afford to increase salaries and allowances. You will be making the environment in which businesses operate more hostile, more aggressive, less profitable at a time when profits are already threatened. 

Even doctors and dentists tell of a diminishing clientele; fewer patients are visiting their doctors and dentists offices, because the patients have less to spend. As the cost of every item in the supermarket, in the drug store, and services from APUA cost more, middle and lower income people have given up visiting their medical professionals.

Trying to squeeze more taxes out of business is a mistake; it is an error; it is foolhardy.

We are in the Christmas season; the time of year when businesses, especially in the merchandising and retail sectors, do their best. In my informal chats with a score of business owners, I have learned that never before have they experienced such poor sales at Christmas. At this time of the year, retail businesses usually make sufficient to hold them over until Easter.

This Christmas: nada, nothing!

Yet, the Minister is addressing his mind to extracting more from the business sector in the New Year. “By cutting out extravagance and theft, and with a modicum of compliance, a UPP regime will be able to achieve all of its promises and do even more.” Who believes that now?

$706 million in recurrent revenues; and, $752 million in recurrent expenditure, according to the 2012 Budget Estimates and, still, the economy is sputtering along, threatening to stall, experiencing the same difficulties as in 2009.  By the way, the Treasury is expected to double its revenue from $6,655,340 in 2011 to $14,608,760 in 2012. (See page 3 of the Antigua Estimates). Where is that additional revenue to come from, Mr. Minister?

The Inland Revenue is to increase its revenue from $391,978,667 in 2011 to $415,367,319 in 2012. Where will the additional $25 million in new revenue come from, I ask! The personal income tax will yield that increase by changing the legislation, not by an increase in economic activity. Business will be squeezed harder.

Madame Speaker, in 2010, Customs and Excise collected $219,983,307 and though there has been a contraction in the economy in 2009, 2010 and 2011, revenues from Customs and Excise in 2012 are estimated to grow to $242,244,246 or by almost $25 million dollars since 2010. Where is that to come from?

Madame Speaker, have you been down to the Port and seen the goods piled high to the ceiling? Have you been told of the delays in processing warrants and the additional cost to business as a result of the wrong computer program? To anticipate more revenues from Customs and Excise in the coming year, than was collected in 2010, is to engage in fictional planning. 2012 revenues will be even less than 2010.

No additional tax measures will yield this government anymore revenues, for the UPP has long reached the point of diminishing returns. As you increase taxes by legislation, you will collect less revenue, not more. That is a law of economics, not one that can be broken by this regime. Unable to grow the economy, as you chase away new investments, the category five hurricane which characterized our circumstances in 2009 continues to blow unrelentingly.

Gifts as well are to be taxed, the Minister has indicated. It isn’t exactly the case that this category is relied upon to avoid tax. A policy-maker, somewhere, is convinced that the tax yield can be increased by going after gifts, no matter how insignificantly. The poisoning of the business atmosphere will not be to the benefit of Antigua and Barbuda.

Madame Speaker, I note that the Antigua and Barbuda Investment Agency (ABIA), created to seek out and attract investments to Antigua and Barbuda, is reporting failure.  Please tell this Honourable House why, as reported in paragraphs 2 and 3 on page 225 of the Budget Summary, that “much of the overall efforts of the ABIA were confined to technical advice and troubleshooting services to ongoing businesses… [since] the ABIA was unable to fully avail itself of opportunities for investment promotion…” because of lack of funding by the government.  

Madame Speaker, ABIA has an increase of $2,500,000 in capital expenditure (page 228 of Budget Summary) in its budget. That sum seems to be going to refurbish or build factory shells. There was no allocation for this item in 2011, and only $29,990 allocated for this item in 2010.  Can the Minister explain to us the objective of this line item? Four items under this head in recurrent expenditure (on page 227) will attract $4.5 million dollars more than in 2011. Please explain to this House what “operating expense” has caused the total to increase by more than $4.5 million dollars over 2011.

Madame Speaker,  the Consul General appointed by the UPP regime in New York has reported that he has brought scores of investors to Antigua and that they have all left empty-handed. Can that be true? Has the utility of this new department been assessed? It seems to me that by its own admission it has achieved very little.

So Madame Speaker, this Government formed an investment authority spending up to $10Mm E.C dollars a year in its early years. Madame Speaker, this body was supposed to improve, facilitate, and attract investments. Madame Speaker, we have no investment, but we have millions spending by this body. The Ministry of Planning sits idle, the Ministry of Trade sits idle, the Ministry of Tourism, Agriculture, The Prime Minister’s Ministry, and all their Ambassadors sit idle under UPP; they no longer look for process investments. This new Investment authority at great expense is now in charge. This body in its business plan presented to this Parliament seeks to judge itself by proposals it claims it has  processed, not how many actual investments are on the ground and implemented; they judge themselves by paper projections of how many money people claim they would like to invest and not what is actually invested . Madame Speaker, it is farcical, we live in the land of dolly house, in the land of make believe; Antigua is now fantasy island. Please turn Madame Speaker with me to their business plan look at the salaries and expenses, lowly civil servants in the ministry of economic development did a far better job in the eighties, in the nineties up to 2004. They were paid a quarter what these non-productive fat cats make.

Madame Speaker read on you will see that over $ 6million dollars spent on medical transcript programme and the company lasted two months.  $ 6million of hard earned tax payer’s money in two months gone ah guassa. The fat cats are still working and you know what, they blame it on…. Guess Madame Speaker ……..world……. economic conditions.

Madame Speaker, this Government spends over a hundred million on fat cats who produce very little but cost the tax payers a lot. Ask the Antiguan Consul General in New York who failing to deliver a single project blames the civil servants and civil servant organizations, not his Ministers of Government, not himself, the same civil servants that built this country for thirty years under ALP Government and who helped this Government collect record taxes so they can go on their wild spending spree. Fat cats are in charge, they are rich living high on the hog, enjoying multiple jobs proclaiming they are deserving, it’s their time, they are patriotic and they dancing with who bring dem ah dance.

The car park bill as the Minister said is being finalized with TT central Bank I see no provisions for it anywhere in these estimates or business plan.

If the type of investment which the ABIA is courting is the company that is charging 2.9% per month or more than 35% in annual interest rates on sums borrowed from the company, then we are in trouble. Why is a firm like Fast Cash which is likely to rake in 35% (in annual interest rates) set upon the workers of Antigua and Barbuda. Those kinds of usurious rates cannot be allowed in our country. Guess who got the better deal? The firm did. We don’t need Fast Cash here. That kind of advance on money is harmful, and is likely to send the borrower to the hospital.

Madame Speaker, please turn to the business plan for Transport Board. Madame Speaker, you must have heard about the $45M new head office; its budgeted cost was $15M. They just got a second loan from ACB they have a cost overrun of nearly $30M dollars.  Madame Speaker, if you think crazy house have in the right people read this plan. Madame Speaker somebody has gone mad; some body is crazy, some body is fully drunk stoned out of their cotton picking mind with the tax payers dough. Who will put an end to this madness Madame Speaker?

Have you found the business plan for the Transport Board? Madame Speaker? This body carries out functions that use to be done by the police and Inland Revenue. In their desire to grow they have grabbed school bus and government motor pool from the Ministry of Education and individual ministries. Madame Speaker, this body earns no new revenue stream. It is really collecting existing revenue streams but they have added millions of dollars in cost. They have added a $120M car park, a $45M head office; they have bought many buses and vehicles that we could supply the entire OECS and have added operating costs of over $13M a year. Madame Speaker, they have gobbled up all the vehicle revenue and have the audacity to lose up to $ five million dollars every year.

 Madame Speaker, what if the Government had given scholarships to young people to be certified in mechanic repair and maintenance and ask them to set up small businesses and privatize maintenance to these entrepreneurial youths, creating jobs and saving the inevitable theft, destruction, poor maintenance, parts theft that will occur at this ultra-modern government work shop. But then the fat cats would not have any milk job creation creating opportunities for the youths are not on our agenda.

Madame Speaker, permit me two more examples to prove this lie of world economic condition been responsible for the economic bankruptcy of Antigua and Barbuda.

Madame Speaker, the music is still playing so let us dance to the business plan for the FSRC. This off shore banking and gaming sector was a major plank in the ALP diversification plan. It was lucrative, it earned the Government, plenty taxes, it generated thousands of good paying jobs, millions in legal and professional fess in rental income, and supermarket, restaurant and entertainment income.

Madame Speaker, the sector is now decimated, destroyed like PCS now; I Mobile left to rot in the sun.  We can smell the putrid stench of incompetence, greed and plain old stupidity. . Madame Speaker, let us read this business plan. You would notice that in an effort to collect revenue in the treasury, 40% of the cash revenue of the body must be paid into the Treasury. Madame Speaker, for the last five or so years every single penny almost made by the FSRC is gobbled up in high salaries, consultancy fees and reorganization expenses. Over $9.0 (nine) million dollars a year gobbled up by the fat cats.

Madame Speaker, the fat cats are in charge Under the UPP. The fat cats are backing up their truck, like Kingdome Consultancy, they hired a professional for the airport who got locked up on his first foreign trip but Kingdom continue to be rehired again to do all sorts of useless work. The Minister of finance announced to do a physical plan but since they have no knowledge about the subject they subcontracted to a Trinidad company. They were mere middle men sharing the loot. Madame Speaker only Richards and Associates make more money as consultants out of this government. Work with little value for big bucks, fees bankrupting a nation and calling it world crisis. Ask Chaku Waku about his security company and how he got so angry when the company did not get Government APUA and schools contract it just announced it’s folding up.

Madame Speaker, I can ask you to turn to the section on CHAPA and the housing projects at folleys and at North Sounds, houses built by the Venezuelans, financed by them utilising their material.  These houses were said to be built for teachers and nurses, policemen, civil servants. Madame Speaker, only one  little problem the mortgage is more than the salary of the workers who are supposed to be buying them , Madame Speaker, most banks do not grant a mortgage if payments are over 50% of a person’s income. Well these houses, mortgages are at best a hundred percent of top civil servants and police men salaries and twice the salary of many civil servants. So the houses remain unsold. Madame Speaker, you know who the report is blaming world economic condition. Idiocy is now referred to as world economic conditions.

You can find that excuse in the entire reports; Social Security contributors dropped from 43000 to 36000 because of high unemployment; the contributory revenue falls by 19% because all the high paying jobs are no more, an economy made bankrupt by incompetence and a lack of commonsense and we hear ad nauseam world economic condition.

May I now take a look at the Mount St. John Medical Center? It has decided not to conform with the requirements of a business plan, like every other government body. It has included no vision statement, no mission statement, no assessment of its service performance, no critical reviews. Yet, its importance as the nation’s premier public hospital (Hanna Thomas in Codrington being the other) cannot be understated. The public must develop faith in this institution for it needs to convey to all that it can deliver great service, as required.

How can an operating room be expected to supply the services for which it was built without air conditioning? That was a major problem for more than two months this year. I note on page 245, fourth column of Capital Expenditure, that $1.5 million dollars have been budgeted in 2012, or twice as much as in 2011, for air conditioning. I welcome that and hope that the resources will be forthcoming. It is not possible to run a modern hospital in the tropical Caribbean without air-conditioning.

Supplies, under item 24 in the recurrent expenditure budget on page 243, have been reduced by more than $1.3 million dollars in 2012. That cannot be real. It is not possible, even if reliance is placed on stores, for there to be that much of a reduction in supplies in any one year. Something does not look right, Minister, when so many patients and out-patients complain, and nurses frequently tell patients to go purchase their own supplies.

Uniforms suffer the same fate. I understand that staff-members are sometimes sent back to their homes for not wearing uniforms, and that the Hospital is now requiring staff members to purchase their own. The terms of the contract requires that uniforms be purchased by the hospital for staff. Uniforms have moved from $215,040 dollars in 2010 to $20,577 in 2012- a 90% reduction. That has to be an error. The Mount St. John Hospital cannot be shaving costs like that. The impact on morale for such a tiny item in a budget of $51 million dollars cannot be overstated. Kindly fix that.

Minister, do you know that a twenty-two year-old expecting mother died of an ectopic pregnancy last week? She was admitted at 11 o’clock in the morning and was being wheeled to the theater almost twelve hours later, near midnight, when she died. Can that be acceptable? They did not take care of her. She constantly complained of abdominal pain but they did nothing for her. Basically, they left her to bleed to death. This is a very easy case to diagnose, and it should have been on the top of everybody’s list in a woman of child bearing age presented with her symptoms. It warrants prompt investigation and surgical management. But this young woman was allowed to bleed to death in front of everybody. This is not a one off situation. I myself have come to this Parliament and tabled a slew of mishaps which were all negligences and incompetences.  But it all stems from poor management and an uncaring situation up there at Mount St. John’s. The Minister is well aware of what is happening up there, but he has declared that he can do nothing   because that management arrangement was put in place by a former minister of Government, so this present Minister of Health has basically backed off. I understand that the number of doctors in the emergency and the operating theaters is often no more than one. That was the problem last week, I am made to learn. As a consequence, there are long waits at the emergency for everyone. Will that be continuing in 2012? Are there budget allocations for an increase in the number of emergency room doctors? I have seen none. The liability that will attach as a consequence of the negligent death of a 22 year-old mom, will exceed many times over the cost of hiring additional medical doctors for the emergency and operating rooms.  Can we expect a MSJMC addendum to this 2012 business plan?

Madame Speaker, can I address the state of the Clinic in Parham? The amount of grass and other vegetation makes getting to the clinic, whenever rain falls, a threat to the well-being of expectant mothers, the elderly, and even the professionals who work there. The place is surrounded by bush. The private contractor who used to keep the grass cut has been fired. Now, the growth is beyond reasonable. The building is itself in poor shape. The supplies are non-existent. The monthly supply of cleaning fluids, Clorox and other necessities are so inadequate that donations must be sought. The medical supplies, to enable assessment of the patients’ health, are woefully lacking. When will the Parham Clinic be treated as though it is responsible for ensuring good health?

The young men and women who utilized the basketball court and the sporting facilities in Parham must now confront cassy trees, growing in the middle of the court. The whole place is overgrown with unwanted vegetation. When will the fenced sporting fields in Parham and Pares and the bathroom facilities receive attention? The basketball court no longer exists in Pares now for nearly 7 years and there is very poor lighting on the football field in Pares. Now that the contractors and others have made their money building fences, can we have some follow-up in maintaining the fields? The places are a threat to the well-being of their users.

Madame Speaker, There will therefore not be any major infrastructural project in 2012. We heard on Monday from Minister of Public Works, the Member from Barbuda, that money for patching-up streets will be spent sparingly. In 2012, a sum of $2.5 million dollars has been budgeted to maintain and repair roads, streets, drains all around Antigua. That sum cannot even repair the roads in Parham, Paynters, Gunthropes, Lightfoot West and Pares.

Imagine, Public Works has a budget of $2.5 million for road repairs all across Antigua in 2012, and that amount is less than the sum set aside in 2010. (Go to page 308 of the Budget Estimates, item 36010). The amount in 2010 was insufficient, everyone knows that; and, the amount for 2012 is sorely inadequate. It is not enough, not sufficient, not nearly adequate.

As soon as there is a little rainfall, huge craters appear all over Antigua’s roads, destroying our cars, pickups, trucks, buses and vans.  The residents in Paynters, Gunthorpes, Lightfoot, Pares and Parham have no roads.  No work has been done in 7 years except for a few main roads in St. Peter’s Constituency and the residents of St. Peter’s pay their fair share of taxes.  Why are they being victimized?

Madame Speaker, I could continue all day with example after example like the 30 tourism projects announced by the Minister of Tourism and we have not seen one, like the projects coming but can never reach. Like the wealthy individuals who have more money than Allan Stanford that the Prime Minister told us he has to invest; sure in lala land fantasy, at best they ruining a nation. Like the mistaken view that Venezuela will be our new Godfather replacing Trinidad. A nation reels under incompetence; we need new elections; it is time for the music to stop; time for the fat cats to get off the gravy train; the people cannot take any more and so when the Minister of Finance signs the new IMF agreement and introduces new taxes, and new misery it will be time for the people to move it will be time for the people to chase this Government out of town.

This administration needs a new mandate. The people of Antigua and Barbuda need to be given a new opportunity to determine if this administration is likely to deliver prosperity and to lead the nation out of the doldrums. In all likelihood, the Antigua and Barbuda electorate, given the opportunity, will vote no. For this very reason, the regime will not go to the polls.

Further, it has done its best to fix the Electoral Commission in a way that would compel a skewed result at the polls. We must resist this, and will take the issue before the Courts.

Our nation is at a crossroad. We will either sink from incompetence while we ponder which route to take; or, we will stew in the anti-democratic ways of our own Government. The people must decide. I pray that we decide soon to take the best course which history has appointed.

Thank you, Madame Speaker.

Madame Speaker, Members of this Honorable House, Citizens and Residents of Antigua and Barbuda in general and my beloved constituents of St. Peter in particular… “His name shall be called wonderful, Counsellor, The Mighty God, the Everlasting Father, the Prince of Peace”.  Isaiah chapter 9 verse 6.

As we prepare to celebrate the birth of the Prince of peace, we give thanks to God Almighty for His continued protection to us as a people. At this festive time, my heart and that of the entire ALP Leadership goes out to the many families who would not be able to have a merry Christmas for lack of financial resources. I pray that the humble family of Nazareth will rekindle love, peace, respect and tolerance in our hearts and homes.

Best wishes to you and yours for a peaceful and Blessed Christmas.

Thank you, Madame Speaker.