The budget continues to grow but what does it mean for the average person on the street.

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Introduction

The Turks and Caicos Islands Government recently passed the budget for the period from April 1, 2024, to March 31, 2025.  The recurrent revenue is expected to be $473.1m and $3.1m from capital receipts resulting in overall expected revenue of $476.2m.  The recurrent expenditure is expected to be $414m, non-recurrent expenditure is expected to be $20.8m and the capital expenditure is expected to be $63.8m resulting in overall expected expenditure of $498.6m.

Each year, the budget grows at a significant rate and the Government brags about the highest budget ever, but the million-dollar question is what it means for the average person on the street.

Accommodation taxes

Our highest revenue item is accommodation tax revenue with an expected revenue of $119.6m. This confirms the importance of our tourism industry, and we should not take our tourism industry for granted. These revenues help to cover the expenditure.

Import Duties

The second highest revenue item is import duties totaling $112.5m. This is the money that businesses and individuals have to pay the Government for importing items into the country.

Personnel costs

As expected, personnel costs represent the highest element of the recurrent expenditure. The Government employs more than 2,000 employees and the total personnel cost is $169.7m representing $157.2m in salaries, wages, and allowances and $12.5 in pensions and gratuities.

The personnel costs are 41% of the recurrent expenditure and 34% of the overall expenditure. In comparison to the prior year’s actuals, personnel costs increased by $34.4m. I suppose this is due primarily to the salary increase that was given recently to civil servants and parliamentarians.

Transfers to NHIP and Hospital charges

The transfers to NHIP and the hospital charges are $61.1m representing 15% of the recurrent expenditure and 12% of the overall expenditure. These costs are the second highest element of the budget. Of the $61.1m, $35.5 is what is transferred to NHIP to cover clinical costs and treatment abroad costs. As I mentioned in a previous article, the NHIP collections are inadequate to cover their costs and so the Government transfers funds to NHIP monthly. There is an argument that NHIP should not absorb the costs of the treatment abroad and that is the responsibility of the Government and hence the reason why the transfers take place. I do believe that a thorough review of the overseas medical treatment is needed, and we must see what additional services can be done locally.

The remaining balance of the budget is $25.6m and it is for hospital provisional charges. Of this amount $24.2m is for Infra Co Unitary payment and $1.4m for reconciliation and windstorm insurance.

Repatriations and Detention Expenses

The repatriations and detention expenses are $7.2m. This is a significant amount and can be even higher. The illegal sloops coming to the Turks and Caicos is obviously a business and we need to find out who is behind this and prosecute them to the fullest. The repatriation cost is too excessive and must be controlled.

Scholarships

$3.8 million is budgeted for scholarships. I believe the Government has a revised scholarship policy. I encourage you to get familiar with it and make sure you submit and meet all the requirements.

Childcare, school nutrition program and after school program

$2.9m is allocated for childcare, school nutrition program and after school program. I believe these are new initiatives and you should become familiar with them so that your children can benefit from them.

Welfare Benefits

There is a generous budgeted welfare benefits totaling $7.3m.  Of this $3.5m is for welfare benefits, $1.57m is for home health services, 880k is for care of juveniles, $248k for welfare grants, $50k for funeral expenses, 15k for disaster assistance and $54k for other social welfare.

The Subventions to Constitutional and Funded Statutory Bodies

A total of $34.9 million is expected to be sub vented to the following Statutory Bodies, namely Complaints Commission, Financial Intelligence Agency, Human Rights Commission, Integrity Commission, Anti-Money Laundering Committee Secretariat, Civil Aviation Authority, Invest Turks and Caicos, Statistics Authority, TCI Community College, Sports Commission, Experience Turks and Caicos, Gaming Commission, National Trust, Health Regulation Authority, Health Professions Authority.

There are other statutory bodies such as National Insurance that do not get subventions.

Capital Projects

One thing I can say that concerns me is the capital projects budget. Almost each year, the capital projects are underutilized.  The capital budget for this year is budgeted for $63m. Last year the budget for capital projects was $56.8m but the actual was only $25.4.

One of the major items in the capital projects is the Digitization of border services is $5m. Another major item is the national identification system budgeted for $3.7m. $1.9m is for boats for the police. $18.9million for South Dock Port Redevelopment. Construction of the Community Center is $2.7m. The enhancement and restoration of conch ground is $1.5m. Renovation of Bambara Beach Vendors is $800k. Upgrading of Bight Park is $650k. Highway and Road improvements are $3.9m. Drainage improvement works is $2.9m

Conclusion

I have tried to summarize details of the budget that is applicable to the average person on the street. I hope this review helps and provides more clarity on the budget that was recently passed. I encourage you to the Government website www.gov.tc and review the budget yourself.

You must remember the real measure of the success of a budget is the achievement and implementation of the goals of the budget. Too many times, we have budget surpluses and that is because many of the projects did not materialize. I also would have liked to see parks and botanical gardens throughout the communities.

There must be a better way of dealing with capital projects. The procurement process in my opinion is too bureaucratic and it is discouraging to many entrepreneurs.

In terms of the recurrent expenditure, I observe some new initiatives and I do hope they materialize and that the average person on the street will feel something from this budget.