Hon. Minister of Finance and Premier Donaldson Romeo gave the annual budget speech on Friday, June 9 at the Montserrat Cultural Centre. “Moving Montserrat Forward Toward Self-Sustainability and Resilient Economic Growth” was the theme. Read the Full Budget Speech here.
The following are the highlights of the 2017/18 budget for the Government of Montserrat.
Recurrent Budget
For 2017/18, the recurrent budget estimate is one hundred and twenty-eight million, three hundred and eight thousand, three hundred dollars ($128,380,300). This sum is a 0.97 percent increase over 2016-17. We expect to raise $50.38m locally, and Budget Support from DFID will contribute $78m, 61 percent. The budget support approved by the UK Government is £22.9m, which is an increase of £2.3m on last year’s settlement of £20.6m.
Civil Service Salary Increase
All Government employees from the 1st of April 2017 will receive a 3% increase. It has also been agreed to pay a 10.04% increase at pay point R51 moving to 7.44% at pay point R40. This will be at a total cost of $1.54 million.
Capital Programme
For 2017/18, the capital programme estimate is $31.14m. This is based on approximately 56% funding from DFID, 37% from the EU and 7.15% from other funding partners. When combining recurrent and capital the total budget allocation for the fiscal year 2017-18 is $159.52m.
Main Projects
Major projects in our capital programme include: Media Exchange ($1.03m) for the completion of the ZJB Building, Roads & Bridges ($1.2m) under the Montserrat Priority Infrastructure Needs Project, ICT ($0.95m), Energy ($2.68m) and Geothermal Exploration ($0.63m). Under the Montserrat Priority Infrastructure Needs Project, we are also using nearly $5 million, to fund five overdue and prioritised projects:
- refurbishment of the Golden Years Home;
- improvement to Airport Facilities to ensure compliance
- repairs to the MPA Ferry Terminal Roof and external canopies to the Ferry Terminal Building; and
- refurbishment of the Brades and (b) the Salem Primary Schools.
Port Development
Access is perhaps our single biggest challenge to growth. The Premier and his team are happy to announce, that through The UK Caribbean Infrastructure Partnership Fund (UKCIF), EDF 11 and CDB, Montserrat has a top level allocation of GBP14.4m or USD20.3m towards Phase 1 of the Little Bay Port development initiative. It is hoped that in 2018, the Government of Montserrat will begin construction of safe docking and mooring facility to cater for cruise and cargo vessels.
New Spending Areas
The Government of Montserrat is happy to announce two new posts of PE Sports Officer and a PE Teacher, further to go hand in hand with the refurbishment of the basketball courts in Salem and Lookout we will be seeking the services of a basketball coach to support or youth and enhance their skills, the estimated costs being $200k.
New Tax Changes
Reduce Rating of Import Duty on specific goods
In an effort to further complement the current home construction initiatives, and to assist in getting completed homes to full use and occupancy; the Government of Montserrat is reducing the import taxes on furnishings and household appliances such as white goods and TVs for every person.
Cabinet has approved for a period of two years from the 1st August 2017 that Import Duty rates be suspended on the importation of the following goods:- furniture 10%, fridges, freezers and dryers 10%, washing machines 15%, cookers, dishwashers, microwaves and toasters 20% and a significant reduction in Televisions of 40%.
Tax Concessions (Homes for Sale or Rental)
Cabinet has approved the reduction from USD300k to USD200k for the qualifying property value under the Customs Duties and Consumption Tax (Property Developers) (Homes Built for Sale or Rental) (Exemption) Order.
The Government of Montserrat is extending the Duty Free concession on the importation of building materials and furnishing, for homes that are to be built for the purpose of for sale or rental for a period of two years from 1st July 2017.
This will lead to an increase in the islands housing stock and in this case ensure that there are adequate numbers of properties that are available to rent or for sale.
Supporting Regeneration
The work of the Cork Hill Reunion Committee in organizing the reunion, which took place earlier this year March 19th – 25th was an inspiration.
The Office of the Premier and his team will further support these efforts. Therefore Cabinet has recently approved granting exemption from Import Duty and Consumption Tax for three (3) years on all building materials imported specifically to repair or build any structure located in those villages of Cork Hill, Delvin’s, Foxes Bay, Weekes’s and Richmond Hill from the 1st of July.
This will give direct support to those people want to rebuild their homes and regenerate these important areas. The initiative will encourage significant construction activity in the private sector. As a business opportunity, it allows for the building of new homes and villas for sale as we increase housing and villa stock.
These important two amendments further support our extensive suite of incentives supporting economic growth, which include:
- First time home owner Home Construction programme- SR&O 32 of 2015;
- Home Built for sale or Rental programme- SR&O 80 of 2014;
- Exemption of new homes from property tax for three (3) years – Property Tax Act section 13; and
- Exemption of Commercial building from property tax for five (5) years – Property Tax Act section 14.
