Fiscal responsibility bill inseparable from public accountability for passport revenue (part 2)

The analysis of the Fiscal Responsibility Framework Bill, (Part 2), will start at the conclusion of Part (1), as a reminder that “Skerrit should never be allowed to legislate an FRF model that circumvents his current obligation to account for $2.8 Billion missing from the Consolidated Fund”. The analysis is not intended to evaluate the technical parameters required for achieving an optimal model. More importantly, it seeks to highlight the core realities of Dominica’s current fiscal landscape, and the administrative and management deficiencies of the FRF Bill that would render it unsuitable for purpose.

Throughout the 1980’s and 1990’s, when good and accountable government dominated the Caribbean landscape fiscal policy decisions were constructed mainly from the perspective of tax increases and spending cuts, leading to lower budget deficits. Against that background it was relatively easy for a country to determine the extent of “fiscal responsibility” by examining the trajectory of a country’s national debt. However, from the year 2004, with the increasing dominance of alternative revenue sources, concentrated in the hands of government Ministers, there was a fundamental shift in the process of Budget formulation and enforcement of public accountability regulations.

The proposed FRF Model has its origin in the country’s rapidly deteriorating fiscal health, largely attributed to Skerrit’s mismanagement of the economy, and especially the impoverishment of the middle class. Most credible governments, when faced with economic disaster, will embark on fiscal consolidation measures, whereby budgetary measures are instituted to improve the fiscal situation and reduce the debt-to-GDP ratio. These policy adjustments are executed through revenue enhancing, and expenditure containment measures in the Budget. Unfortunately for Dominica, due to a large section of the population being without gainful employment, the effective tax base is considerably reduced. Technically, there is no headroom and limited scope for revenue enhancement measures. And so Skerrit is embarking on desperate measures to attack the wages and salaries of public servants as his only viable option for expenditure containment.

Dominica’s current governance system/structure is a far cry from the democratic-governed economy of the 1980’s and 1990’s for which the FRF model is best applied. In the Interpretation section of the Act says, “This Act shall be read and constructed together with the Financial (Administration) Act #4 of 1994. But this seems to be in spirit and not the letter of the Act. There is abounding evidence to indicate that with the advent of “sale of passport” as the main source of revenue, the provisions of the said Act has virtually become dysfunctional, or violated. In fact, since the emergence of Anthony Hayden as an item in the control of Dominica’s economy, government has literally established two (2) repositories for public revenues. One is based on the traditional mandated operations of the Treasury for collection of revenue and disbursement of funds. The other repository is clandestinely/creatively designed for the management of revenue originating from the sale of passports.

According to Section captioned Interpretation, of the FRF Bill, “Revenue” is defined as follows: “All taxes, tolls, imposts, levies, rates, duties, fees, penalties, royalties, surcharges, forfeitures, rents and dues, proceeds of sale, repayment of loans, and all other receipts of the government from whatever sources arising for which our Parliament has the power of appropriation”. This definition excludes “revenue from sale of passports”. Is this deliberate or deceitful? In effect, government is saying that Parliament does NOT have power of appropriation over the CBI program. Evidently, this power is usurped as the prerogative of an undisclosed Minister. Without doubt, this Bill is treading into dangerous territory. The danger comes from Skerrit’s back-handed attempt to present and FRF Bill for Parliament’s approval, which effectively overrides/denies Parliament of its oversight responsibility for all forms of revenue.

In light of the new arrangement for funding government operations, the overarching mandate for the Budget is to overcome the pressing economic problems facing low and middle-income families. The proposed FRF is founded on the standard practice, whereby the economics of deficits and debt is structured to show that rising debt ratios will quickly become economically disastrous. Accordingly, government is embarking on program that requires large sacrifices from low and middle-income households, as justification of an effort to lower the trajectory of debt ratios. This formulation overlooks the other revenue sources accessible by government that should be applied to directly productive enterprises, and opportunities for increased employment.

By his deliberate exclusion of “revenue originating from passports” from the Consolidated Fund, Skerrit has imposed an eternal threat on the economic success and financial security of typical families, as follows:

  1. Chronic downward pressure on aggregate demand, that prevents economic growth;
  2. Persistent high levels of income inequality between those associated with the regime, who are privileged to sell passports, and those at the bottom and middle, the real contributors to national output.

In the circumstances facing Dominica, the ultimate purpose of the impending Budget Plan should be to ameliorate the danger posed by both of these threats. The impending Budget Plan 2021/22, should emphasize a shared prosperity derived from sovereign wealth. This is the only practical way to put the economy’s debt-to-GDP ratio on a sustainable downward path, over time.

Unless and until the citizens are able to retrieve the estimated $2.8 Billion missing from the Consolidated Fund during the two Budget Cycles 2018/19 to 2019/20, then the proposed FRF Bill is a legislative exercise in futility. The said missing amounts could be applied to directly productive activities, aimed at generating employment and enhancing growth of the economy. By increasing the GDP component of the ratio, the amount of debt would automatically reduce.

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22 Comments

  1. Lin clown
    July 21, 2021

    GARRY saying UWP lose election 5 times strait.In the 2019 election Labour get 23,643 votes,UWP get 16,424 votes,Labour win by 7,219 votes.Labour get 18 seats and UWP get 3 seats..UWP get 1,163 votes than they get in 2014.UWP take Labour to court for the 2014 election and the 2019 election.The Judge and the DPP look at UWP and they say in there mind,all you is JACKA so they THROW OUT all the case.Maybe %,Randy,Views and IBO will understand that the MAJORITY of the Dominican voters will NEVER vote UWP into office.UWP just like Freedom is a DEAD party.This realization is diminishing the brain cells in the head of IBO,RANDY,VIEWS andVERE TERE.Garry must understand like their leader they UNCLE they CANNOT LEARN.You think they have time to read GAZZETTE or CONSTITUTION,like you GARY doing?They waste their time writing and posting BS.

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  2. Lin clown
    July 21, 2021

    GARY,the constitution of DOMINICA sec 76 on page 69 makes it CLEAR,that all monies coming into Dominica and for Dominica,DOES NOT HAVE TO GO INTO THE CONSOLIDATED FUND.What is so hard to understand about that?If the funds are for a SPECIFIC PURPOSE it does not have to go into the CONSOLIDATED fund TONAIR.It would seem to me IBO France ,RandyX and % went to school in August.How these overeducated coonu come up with $2.5 billion is amazing.Where is the $2.5 billion suppose to come from to go into the consolidated fund?No wonder UWP is losing election after election too many uneducated supporters.

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  3. Gary
    July 20, 2021

    The last paragraph of your commentary, so ludicrous. How can you retrieve an estimated $2.8 Billion missing from the Consolidated Fund during the two Budget Cycles 2018/19 to 2019/20 when no such money was put into the consolidated fund, is this the nonsense you took your time to write. How can you say the proposed FRF Bill is a legislative exercise in futility, wow. Don’t you think that the Government needs to save for wet days. When you make such statement, It’s either you are ignorant or mischievous in espousing a political agenda which you are part of. When you look around Dominica don’t you see the amount of Health centers that have been built 12 and more are under construction, what about the Margot Hospital and all the homes the government have built, do you know such Government spending helps increase the GDP rather than your phantom idea of alleged monies missing which you believe should be put in the consolidated fund, so long
    for your mischievous propaganda

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    • %
      July 21, 2021

      @Gary
      You are so insultive and badly educated GARY.Your utterances are so prposterous..How can you come here like like an educated fool, and pompously say look at the health centers, look at the houses, look at the clinics, with absolutely no figures assigned to anyone of those items or projects, and say that’s where the money went?. In my business, i would ask to leave and go home on the spot………………
      You sound very much like a semi illiterate here, in trying to make liar Skerrit look good.
      WHAT A SHAME!!!

      Well-loved. Like or Dislike: Thumb up 10 Thumb down 1
  4. Lin clown
    July 20, 2021

    GARRY,once again you are correct about the electorate.The majority of Dominican voters has NEVER voted UWP.IN 1990 they got 26.85% of the votes.In 1995 they got 34.36%.In 2000 they got 43.24%.In 2005 they got got 43.67% .In 2009 they got 34.86%.In 2014 they got 42.85% and in 2019 they got 40.99%.That is what GARY is talking about.Both IBO FRANCE and % continue to post comments from the MENTAL INSTITUTION you are in.It is a waste of time for a GRAMMAR SCHOOL GRADUATE to try to educate coonu like you.DNO don’t like the words HIGH LEVEL OF STUPIDITY.

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  5. Lin clown
    July 20, 2021

    GARY you are 100% correct.These ignorant coonu does not read.There in no sale of passport programme there is a CBI programme,one can pay money into the CBI programme and not get a passport.This JACKA continue about a sale of passports BS.GARY,that is the thing about these guys they LIE to people who do not and cannot read and understand.They swallow bait HOOK,LINE and SINKER,BS goes down their throat like a cold glass of. RIBENA.Typical UWP.

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    • A voice
      July 20, 2021

      So, what say you, how about the $2 billion not going into the country’s consolidated funds? (coming from the opposition it may be less) I don’t get it.

      Well-loved. Like or Dislike: Thumb up 14 Thumb down 0
    • Ibo France
      July 20, 2021

      This proverb is so true -Birds of a feather flock together.

      Clown, you and your cognitive deficient friend ( Gary)comprehension skills are severely limited. Both of you are a monumental embarrassment to your alma mater.

      You have no idea about economics, the constitution nor the CBI program. You scribble on this forum from a position of incognizance. You (both) could never fully appreciate this article. It’s out of reach of your mental capacity.

      The article is well researched, speaks truth to power and states the objective facts. IRREFUTABLE!

      Well-loved. Like or Dislike: Thumb up 17 Thumb down 0
      • Gary
        July 21, 2021

        The truth irritates, you know why, it’s the manner in which you reply, you use the old deflection tactics trying to ridicule me, or others lol, the easy way out. Your ridicule of me is worthless and silly, it does nothing to me. You read a commentary, and it fits the narrative you have been espousing, therefore it is well researched and speaks truth to power wow. Do you know what it is means when something is well researched., making allegations and not giving evidence to support it, is this what you call WELL RESEARCHED. Do you know what OBJECTIVE FACTS are, does this commentary demonstrate such thing., objective facts is not what’s written in this commentary it’s what on the ground Dominicans are seeing and witnessing, that’s IRREFUTABLE . Do you think that by trying to ridicule me or others can change these irrefutable facts as to what is taking place in our Country, all due to The CBI and good prudent fiscal management, power to the truth.

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  6. If we knew better
    July 20, 2021

    Thank you Sir. Doesnt matter which pocket you put it or take from, is still the same pants it going in. As an English and Psychology major, this Minister of Finance really think people are absolute fools.

    Well-loved. Like or Dislike: Thumb up 15 Thumb down 0
  7. Ibo France
    July 20, 2021

    Dominica has three (3) major problems that are directly contributing to economic deprivation, social decadence and the massive impoverishment in the country. Lack of TRANSPARENCY, systemic CORRUPTION and the widespread APATHY/INDIFFERENCE of the local inhabitants.

    The only remedy to restoring Dominica’s downward economic spiral is for all of society to rise up in peaceful protest and rid the country of Skerrit and his seventeen (17) cult-like surrogates. The power lies with the ordinary people to bring a definitive and decisive end to this perennial hardship and dystopia.

    Well-loved. Like or Dislike: Thumb up 20 Thumb down 0
    • Gary
      July 20, 2021

      You are entitled to your opinion, it is one thing to express an opinion ignoring facts and make facts to suit your opinion, in the end your opinions are over showed by the facts you ignore. The remedy you are asking for, quote, “the only remedy to restoring Dominica’s downward economic spiral is for all of society to rise up in peaceful protest and rid the country of Skerrit and his seventeen (17) cult-like surrogates. ” is a fantasy of your imagination. There is evidence to prove your pitiful fantasy. When the opposition use their mantra calling for boots on the ground with the various demonstrations they have called for, how many Dominicans participated, doesn’t that tell you The Dominican electorate is not interested in the agenda of the Opposition, they are satisfied with the way the present Government is handling the affairs of the Country. What you believe about the Government is fine, the electorate does not share your views, accept it, move on.

      Hot debate. What do you think? Thumb up 0 Thumb down 18
      • %
        July 20, 2021

        @Gary
        You sound full of yourself and empty. When you say “”the Dominican electorate is not interested in the agenda of the opposition””, what do you really mean. Who constitute the Dominican electorate? Only labourites? Man you are such a waste, i almost called you a cokehead!!!.. Guess when you make yourself a slave to a corrupt leader, you end up being so dicreditable…Your long piece of garbage, singing Skerrit’s propoganda is baloney to many of us here, since it is 99% lie and you must stop it!
        Stop being the unethical blogger on this medium. Go do the country’s work.

        Well-loved. Like or Dislike: Thumb up 19 Thumb down 1
      • Ibo France
        July 20, 2021

        These are the incontrovertible facts. The last general election the DLP got a total of 23 634 votes and the UWP 16 424.

        If we were to cancel the 10 000 overseas rented votes from the DLP’s tally, the UWP has more support from resident Dominicans than the corrupt DLP. These are facts that cannot be condemned.

        The UWP did exceptionally well despite the corrupt electoral lists, the free concerts, the bribes, the control of the national radio station, the tear gassing, the intervention of foreign soldiers, the intimidation, the threats, and the other machinations, skullduggery and shenanigans before and during the election.

        Well-loved. Like or Dislike: Thumb up 12 Thumb down 1
        • RandyX
          July 21, 2021

          Spot on right! Anyway, why would Skerrit go through all this pain if he was sure of victory. He knows very well without deployment of imported votes and general treating he wouldn’t be PM of this country anymore. You and I and Skerrit himself know that is something he can’t afford to happen because it would mean a definite prolonged stay at Stockfarm.

          Well-loved. Like or Dislike: Thumb up 11 Thumb down 0
    • July 22, 2021

      Four major problems not three. The last problem is Ibo France. Another UWP coonoonoonoo.

      Hot debate. What do you think? Thumb up 1 Thumb down 7
  8. Gary
    July 20, 2021

    Where do you get the idea that the Fiscal responsibility bill should be inseparable from public accountability for passport revenue, your ignorance is so pathetic. First off, what do you mean by passport revenue, is it revenue or monies that the Government collect from Dominican citizens which include those who obtain Citizen by investment who after decides to obtain a passport., well yes that goes to the consolidated fund as monies collected as revenue but the monies that the Government receive form an investor towards a specific project say a hotel development or the Airport project does not go into the consolidated fund these monies belong to the investors for the specific project and so it goes into an escrow account not the consolidated account of the Government. The monies in the escrow are managed by public service workers, like the Financial Secretary and his team, who make sure that the monies disbursed go towards the specific projects.
    To be continued

    Hot debate. What do you think? Thumb up 0 Thumb down 23
    • Gary
      July 20, 2021

      Government Ministers does not sign any checks for disbursement from the escrow account towards the construction of any specific projects designated by the Government. The CBI Act passed in Parliament was done legally, and it stipulates how the investor’s monies is to be managed with accountability and prudent fiscal management done under the management of the Financial Secretary and the Auditor General, all public servants. Your allegations about $2.8 Billion missing from the Consolidated Fund during the two Budget Cycles 2018/19 to 2019/20 is nonsensical, do you have evidence of such thing other than Linton saying so, when he was asked by a reporter how he arrived at such allegation, he said it’s his opinion. Linton is the Chairman of the Public Accounts committee he has the power under the Constitution to summon the Auditor General for a meeting and give a report on the monies spent from the CBI and has not used that authority but goes in the public and make such allegations,

      Hot debate. What do you think? Thumb up 2 Thumb down 18
      • %
        July 20, 2021

        @Gary
        You seem to be one of Skerrit’s dishonest, unethical, unprincipled and greedy misleaders spreading your filth on here as though you are addressing a gathering of labourites at Lagon. You dishonest sycophant and parasite of liar Skerrit, know that year after year, after year, no audit reports were tabled at parliament. You know it. The audit reports are in arrears. You know Linton just cannot get the information he needs, but you come here with your garbage ladened with half truth and lies trying to make liar Skerrit look pretty???…You are paid to work from 8am to 4.00pm. Do your work. Stop spreading your viruses here..
        Your unethical, morally deficient, unprincipled and evil being!!!
        Your unethical soul.

        Well-loved. Like or Dislike: Thumb up 19 Thumb down 0
      • VereTere
        July 20, 2021

        How comes Mary, on certain issues you’ve got absolutely nothing to say or contribute but boy as soon as the C-word is mentioned you are right awake and you get super defensive. I’m sure you are not one of Skerrits Minister but you could be one of his legal eagle friends, perhaps one that even benefited directly from the C-word. Anyway, one way or another a blood sucker.

        Well-loved. Like or Dislike: Thumb up 17 Thumb down 0
        • %
          July 20, 2021

          @Vere Tere
          You are so observant Vere Tere.For example he was so MOO MOO on the Choksi matter, now he sees it fit to come here and spew his fetid lies…He is not a minister, but a greedy sycophant who wants to live high on the hog, while the majority are scrunting. Reasons why i denounce him as unethical.!!!
          Good to unmask them.

          Well-loved. Like or Dislike: Thumb up 11 Thumb down 2
  9. Mallo
    July 20, 2021

    Once again, very well stated. The only thing I would disagree with is that you give Skerrit to much credit. If this country is worth its weight in salt, than everybody must take to the streets tomorrow and demand for Skerrit to properly account for the missing 2.8 billion. The emphasis here is on proper, i.e. independently verified and NOT his usual wishy washy. The country has reached a crossroads now and it is vital that me make the right decisions. Corruption can’t be the majority of DAs economy. Because only the rich gain from corruption.

    Well-loved. Like or Dislike: Thumb up 16 Thumb down 2

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