Prime Minister Ralph Gonsalves outlined several of his Cabinet’s proposed measures to curtail the on-going economic fallout as a direct result of the raging COVID-19 pandemic, in a near hour long address to the nation on Wednesday evening.
“The aggregate of this expenditure amounts to $64.05M. Additional to this sum we have tax relief and other measures which are estimated to cost the revenue approximately $10M. A total therefore, the fiscal stimulus amounts to $74.05M or 3.4 % of GDP,” PM Gonsalves said.
Additional to the proposed fiscal measures, the Vincentian Prime Minister tabled several policy initiatives that are also intended to combat the negative socio-economic effects of the life threatening disease.
Dr. Gonsalves told media audiences, “Further the following policy initiatives touching and concerning the socio-economic recovery have been advanced:
“The banks, Credit Unions and other financial institutions have agreed to provide a 6 month moratorium on the payment of principals and interests on home mortgages, business loans, personal and consumer loans and credit cards.
“All these financial institutions have would further arrange specific, customized packages of financing or refinancing for their customers.
“VINLEC and CWSA have agreed NOT to disconnect any customer who is currently not in arrears for more than two months, not to disconnect them for a period of 3 months starting from now.
“Any indebtedness on those bills after this 3 month moratorium period would be paid on an agreed incremental basis over a period of 2 years.
“Any customer who has been in arrears and is currently disconnected will NOT be required to pay the reconnection fee either to VINLEC or CWSA, if the reconnection is effected within the next three months from today.
“The telecommunications companies are to provide appropriate relief for hotels and business consumers on the delivery of a range of telecom services.
“Special subsidies on animal feeds are asked to be provided by the Eastern Caribbean Group of Companies for a targeted number of farmers producing poultry, sheep, goats and cattle.
“The National Insurance Services will provide a prepayment of 2 months pension benefits for all categories of pensioners – contributory and non-contributory. So as to facilitate upfront costs of pensioners at this time. There are 7406 contributory pensioners at the NIS and 783 non-contributory pensioners.
“The NIS would also provide $1.25M in the form of temporary unemployment relief across economic sectors from active employee registrants.
“So government would provide a Displacement Supplemental Income for persons who have been laid off or lost income, one week on week off in the hotel and tourism sector, would be given this supplemental income… but you can’t double dip. You can’t get the Displacement Supplementary Income and dip into the NIS and vice versa.
“The St. Vincent and the Grenadines Port Authority will engage the business community in respect of granting a measure of relief in respect of certain boat charges with effect from April 2020 for a 3 month period in the first instance.
“It is expected that any such relief would be passed on to the ultimate consumer.
“Price controls would be established on all items on which relief on duties and VAT are granted. Price gouging is being discouraged.
“The Department of Inland Revenue has decided to provide certain extensions of deadlines for citizens to file their personal income tax returns, for payment of motor vehicle licenses in respect of vehicles ending with the last digit 3 and for the payment of persons paying the second half year licenses for motor vehicles last digit 9 and for the payment of the second quarter liquor license fees.
“These deadlines range from between 3 to 4 weeks, the department would inform the public of these details accordingly.
“The workers and their Unions have agreed to refrain from making demands for increase in wages, salaries or related benefits for a one year period in the first instance. Save and except in a few cases of current negotiations between Unions and certain private sector entities.
“The Unions have also agreed to an extension of the layoff period in Sector 27.1 of the Protection of Employment Act up to December 31 2020, an amendment with a sunset provision.”
Prime Minister Gonsalves explained that persons who “are laid off for 6 weeks” under the applicable labor law, “can go and ask for your severance pay because you are taken to be constructively dismissed.” However during the course of recent negotiations representatives of the national labor force have agreed to add a further two weeks onto the time that persons must wait before they can lodge severance pay demands with former employers.
This though would only be allowed up to year’s end as, “from January 1 you’d revert back to the six weeks” hence the “sunset provision.”
Dr. Gonsalves also said, “this proposed socio-economic recovery and stimulus package is additional to existing initiatives and is specific to this time of COVID.
“Clearly the existing Estimates of Revenue and Expenditure for 2020 and the corresponding Appropriation Bill that were approved in January of this year would require careful recalibration in the implementation of both the Revenue and Expenditure Estimates – Recurrent and Capital.
“You may remember that the Capital Estimates for 2020 were set at $310 000 000. It is self-evident that the projected revenues in the 2020 Budget which we passed in January will decline substantially. The full extent of that decline and over which time period are not yet calculable given the range of uncertainties.
“So there has to be a reprioritization of expenditure to meet the unfolding realities globally, regionally and nationally. This exercise is ongoing. Over the medium term, our fiscal condition would be consolidated as the anticipated economic recovery takes root.
“I am encouraged that the World Bank and the International Monetary Fund issued jointly today a call for debt relief for International Development Association (IDA) countries – countries who can borrow at low rates of interest from the World Bank – that the call is put forward for debt relief for countries like St. Vincent and the Grenadines.”