Published 8 July 2021
Basseterre
Buckie Got It, St. Kitts and Nevis News Source
Opening Statement by Prime Minister Dr. the Hon. Timothy Harris at the Press Conference on Thursday, July 08, 2021 at NEMA Headquarters
My fellow citizens and residents, thank you for participating in today’s Press Conference organized by the Office of the Prime Minister. This is one element of our good governance agenda, in which we regularly inform, engage, educate and update you on matters of public concern.
In my address to the Nation last Friday, I promised to report to you on the nature of a relief package which my Cabinet would provide to our people especially the poor and vulnerable affected by COVID-19. My Government has earned wide respect as a fiscally prudent administration, but it also is a compassionate one. This explains our comprehensive stimulus package in response to the COVID-19 pandemic in 2020.
Our response at this time is taking place against the backdrop of the very destabilizing impact of COVID-19 on Government tax revenues. Inflows have fallen significantly on account of several tax waivers, deferrals and incentives given over the last year. To date, my Government has paid salaries, wages and pensions to nearly 10,000 persons who are part of the Government establishment, Government auxiliary employees, STEP recruits, and pensioners. Between January to June 2021, my Government has spent $164.3 million on employee related benefits. We have been a model employer and have refrained from either severing employees or reducing their benefits. In response to the pandemic, we have reduced corporation taxes from 33 percent to 25 percent thereby mitigating the harsh impact on cashflows of businesses, and reduced by 50 percent (from 4 percent to 2 percent) taxes due by unincorporated businesses mostly Small and Medium Sized Enterprises (SMEs). These initiatives were intended also to encourage businesses to retain as many of their employees as they can. In sum we were and remain a people-centred Government.
We were able to do so much to date in response to the pandemic because in the words of the IMF “St Kitts and Nevis entered the COVID-19 pandemic from a position of fiscal strength”. The IMF went further to state that “prompt Government action helped to contain the pandemic’s public health impact. The response measures effectively mitigated the pandemic’s human cost with St Kitts and Nevis having had the lowest per capita case count in the Western Hemisphere and no mortalities in 2020”, (IMF Concluding Statement, July 2021).
The COVID-19 pandemic has created an extraordinary challenge to both the Private and Public Sectors in the Federation. It has been an existential threat to life and livelihood around the world. It has caused the death of close to 4 million persons around the world. The equivalent of 255 million job losses globally have been attributed to COVID-19. From the inception of the pandemic in 2020, the Government of St. Kitts and Nevis instituted a number of initiatives to ease the financial burden that this pandemic was expected to have on businesses and individuals and at the same time stimulate economic activity in the Federation. These initiatives complemented our existing public assistance programmes such as the Poverty Alleviation Programme (PAP), payment of examination fees for students, school meals for students, provision of books for students, food vouchers, medical assistance, early childhood subsidies, residential services for the elderly and rent support for the poor and vulnerable. Our PAP has cost the Government $70 million from its inception in December 2018 up to May 2021. For the year so far, we have spent over $16 million to render PAP support to thousands of families in our Federation. Last year we spent over $37 million in social safety net programmes. Indeed St Kitts and Nevis has one of the most comprehensive social safety nets in the region.
These initiatives instituted by your Government also demonstrate a strong commitment to rebuilding the economy. This is also evidenced by the robust support to various sectors. The Construction and Real Estate Sectors for example, 2 key pillars of the economy, have benefitted from the Government’s support through the following initiatives:
∙ Reduction in the rate of Stamp Duty from 10% to 2.5% on the sale/transfer of real property until December 2021 for specific developments;
∙ First Time Homeowners Initiative. Under this Initiative First Time Home Owners can receive duty free concessions on building materials required for the construction of their first home. For the year so far 78 persons have received concessions on building materials totalling $12.3 million. Between 2015 and present 795 applications were approved.
Put another way separate and distinct from the housing programmes led by the NHC and the homes renovated, repaired in response to Hurricanes, my Government has assisted 795 other individuals in constructing their homes by the waiving of duties. This is an excellent track record on home ownership by my Government of which I am proud. I give God thanks for that blessing.
∙ Tax exemptions on building materials and equipment used during the construction phase of large developments;
∙ Government Employees Mortgage Facility administered by the Development Bank of St. Kitts and Nevis; and
∙ Citizens Mortgage Facility also administered by the Development Bank of St. Kitts and Nevis. Between March to June 2021, some 40 mortgages were approved totalling $6.4 million.
The foregoing initiatives related to the construction and real estate sectors are expected to produce benefits to homeowners, developers and a wide range of individuals engaged in the construction sector, providing jobs and incomes to our citizens and residents.
My Government continues to provide ongoing support to the Agriculture Sector and small businesses in the form of:
- Injection of $15 million to boost production and ensure food security;
- Allocation of additional lands for farming;
- Temporary waiver of water payments by farmers.
The investment in agriculture has returned dividends. During the period January to May 2021, the dollar value of crop and livestock production rose by 44 percent ($3.6m in 2020 to $5.2m in 2021). Crop output increased by 27 percent. Livestock output increased by 90 percent over the period. The Department of Agriculture has attributed this success to the stimulus package. Overall fish landings increased by 51 percent for the period January to May 2021 compared to same period in 2020. We are moving in the right direction to food security. I commend Permanent Secretary Ron Collins, our farmers like Politics, Debbie Gilbert, Mrs Pemberton, George Jeffrey, Shaheed Williams, Henderson, etc.
- Turning to small business support I note in particular the injection of $3 million for the continuation of the Fresh Start Programme administered by the Development Bank to provide small and medium sized businesses with low cost financing. As at June, 45 loan applications were approved totalling $3.1 million;
- We have extended bond facilities for small businesses unable to cover Customs duties on the importation of vehicles and commercial goods.
Extension of Critical Elements of 2020 Stimulus Package and New Measures
The extended stimulus initiatives expired on June 30, 2021. Given that the pandemic persists and continues to adversely impact the current economic and social environment, Cabinet yesterday gave approval for the initiatives outlined above to be extended until December 31, 2021. In addition to these continuing measures my Government proposes further initiatives to help the less fortunate to better cope with the financial hardship caused by COVID-19 and to further stimulate the economy.
I now outline the new initiatives:
- We will implement an Income Support Programme in the amount of $15 million to alleviate hardships on our citizens who remain unemployed since March 2020 and are registered with the Social Security Board. A monthly stipend of $1,000 will be paid for the next three months. However, persons who received $15,000 or more in severance payment after March 2020 would not be eligible to access the Programme. (b) Persons receiving assistance under the PAP would only be entitled to receive an additional $500 under the Income Support Programme. (c) Persons already in receipt of a Government stipend of $1,000 would not enjoy a further benefit of $1,000. We are attempting to reach the hardest hit and the largest number of persons who require support. Our priority must be to support those most in need and to support as many persons as possible.
- We will waive commercial rent for 6 months (July to December 2021) for small businesses which lease space from the Government through the Ministry of Tourism and Transport. These would include small businesses that rent booths at the Ferry and Bus Terminals, the Amina Craft Market and the Pelican Mall. We encourage private sector landlords of commercial space to give some measure of relief to their tenants. We are all in this together. COVID-19 has been a great challenge. I ask landlords to take a part with their tenants and reduce their rent/lease payments. I cannot dictate how much support, but I ask at this time of global crisis that you let your conscience be your guide.
- We will further reduce the VAT Rate for 3 months (July to September 2021) from 10% to 5% on commercial rent for small businesses with 25 or fewer employees and a valid business license.
- We will reinstate the annual Import Duty exemption for 16 tyres (4 tyres per quarter), 4 pairs of brake pads and 3 pairs of brake shoes for ‘H’ passenger buses. We thank the bus operators who understand the reality of COVID-19 and appreciate life comes first. I appreciate that you were hit hard by COVID-19. Today we are bringing some measure of relief to you. We do understand you have made a sacrifice. We care for you and your family.
- We will provide fuel subsidy of $400 per month to passenger bus operators for 3 months.
- We will waive stall fees for vendors using the public market until December 31st.
- We will reduce travel tax for the next 6 months in an effort to boost visitor arrival thereby creating more income earning opportunities for our taxi operators and other providers of hospitality services who will benefit from increased arrivals.
- We will increase support to battered women through the Ministry of Social Development. In times of difficulties women tend to suffer more abuse. My Government will endeavor to stamp out such abuses in society, and will provide resources to give the victims a sense of empowerment and independence.
- Our differently abled children always need a strong supportive friend. My Government will assist households with such children with a stipend to help them over the next 6 months.
- SKELEC has agreed to provide a deferral on residential electricity bills for the next 3 months.
I have made a request to the ECCB for consideration of a further extension of the moratoria on mortgage payments to commercial banks. We are hopefully optimistic that the Monetary Council will find favour. Yes, my Government continues to look out for our people. We pledge to put people first.
Conclusion
This Team Unity Government promised a stronger safer future, and with God’s help we are determined to continue our progress in delivering on this promise even in the face of a global crisis that has crippled health systems and economies around the world. With God’s help we will overcome the impacts of this pandemic. I have outlined initiatives that we have designed to stimulate economic activity, and provide economic relief to our citizens and residents. I believe that these initiatives are comprehensive, targeted and far-reaching.
The pandemic is not yet over, and we do not know how soon it will end. Vaccination is a critical tool in this fight against covid-19 and its extensive devastating ripple effects. Across the world, the best scientific evidence indicates that vaccination offers a critical layer of protection to individuals, and this provides the best possible outcomes to communities and countries. I therefore continue to urge citizens and residents to seize the opportunity to become vaccinated against this dreaded virus. May I remind you that the vaccination program restarts today and continues tomorrow Friday and for the foreseeable future. A nation’s health is a nation’s wealth. We all want the Country to get fully back to work soon and in a safe way. The best contribution you can make to a more vibrant economy and the safe opening of the economy is to get vaccinated without further delay.
More than ever before, the decisions of every person have the propensity to affect a large number of people. Therefore, personal responsibility is a significant factor in this fight. Let us not think only of ourselves, but let us think of others. Let us think of how our actions may affect others, especially the most vulnerable. Let us do what is necessary to provide the best protection to ourselves, our families, our communities, and our beloved country.
Further, I encourage us to utilize the tools that we are very fortunate to have available to us. Wear the face masks properly when you are outside of your homes, sanitize or wash your hands as often as possible. Adhere to the physical distancing requirements; and above all get vaccinated. We must adopt the necessary “Covid-19 appropriate behavior”. This is the only way we can preserve life and health, and preserve and restore livelihoods. This is our pathway to restoring some semblance of the pre covid-19 norms we enjoyed. This is our pathway to the safer stronger future we all deserve. Let us unite and defeat this pandemic together.
I Thank You my citizens and residents for your understanding, cooperation and support.
