Press Statement by Dr the Hon Timothy Harris, Prime Minister, Tuesday, January 19, 2016, Parliamentary Lounge, Government Headquarters
My fellow citizens and residents, let me on this occasion of my first Press Conference for the year, extend best wishes for a successful 2016.
Snapshot of the Economy
In my New Year’s Address I described 2016 as “a year of wonderful possibilities”.
For 2016 there is much for which we ought to be thankful. The economy promises to deliver another year of strong growth rate under Team Unity. According to the IMF and ECLAC reports, we shall grow by 4.6 percent. This level of growth makes us one of the best performers globally i.e. in the world. It comes after an outstanding 6.6 percent economic growth projected and achieved for 2015.
While our projections are positive and strong, we must give God thanks because some of our neighbouring islands like Barbados and Trinidad and Tobago have had to impose austerity measures to mitigate negative developments in their economies. Barbados, for example, introduced a 4.5 percent cell phone tax increase while Trinidad and Tobago adjusted property and other taxes as countervailing measures to address anticipated significant losses in its revenue. While these CARICOM neighbours were doing this, the competent management of the fiscal affairs by the Team Unity administration led to a surplus realized in 2015.
Our growth sectors in 2016 are Construction – which will continue to be buoyant, Tourism, Manufacturing, Agriculture, and Professional and Financial Services.
Importance of Growth
Growth is important. A growing economy should provide more jobs. A growing economy provides greater revenues for the government to build the B.H.S., to establish an Oncology Unit for the treatment of our cancer patients, to renovate Mary Charles Hospital, to pay increments to civil servants and a wage increase of 3 percent for a 5 percent add-on in payroll burden. The growth in the economy will help us complete renovations at the former John Gumbs Building, the Treasury, and purchase more medication for our hospitals and dispensaries. In other words, economic growth in a well-managed economy trickles down to a better quality of life for all.
I am heartened to report that the 6.6 percent growth over which we presided in 2015 accounted for 24,677 jobs over the period January to October 2015 versus 24,530 in 2014. It facilitated an average of $72.32 million in wages and salaries being pumped into the economy each month up by a significant 7% over $67.50 million per month paid in 2014. (Total wages and salaries went up 6 percent in public administration and defense, 14 percent in the hotel and restaurant sector, wholesale and retail increased by 6 percent, and construction was outstanding with 14 percent increase in total wage payments. Financial intermediation declined marginally at 2 percent. The period under review is January to October 2015).
Most heartening for us is that we are off to a good start in realizing the enhanced quality of life for all our people. Prosperity for all is a work in progress.
I read a report produced by Social Security on Monthly Employment Data. I quote the sub head:
“The Comparative analysis with respect to earnings revealed that the earnings landscape has changed for the better. We saw that the distribution of persons earning in the lower wage categories declined while those earning in the higher wage categories increased. Thus we may posit that the wage distribution has improved and persons are enjoying higher wages in this term than in the previous term.
We saw a move from 31% of jobs paying in the minimum wage category in 2014 to 26% of jobs paying at minimum wage in 2015. There were corresponding increases in the medium earning categories for 2015. Now 34% earn over $3,033.34 per month as opposed to 31% in 2014”.
The obvious conclusion is that our people were better off in 2015 than in 2014. Earnings were higher for the majority. Added to this is the fact that food and non alcoholic beverages, declined by 10.6 percent, according to the price index for the period January to October (2015). Our VAT removal programme has improved the purchasing power of all consumers and made life better for the poor. Add to this the fact that more people went into self-employment, thereby becoming masters of their destinies. Furthermore, over 1750 former sugar workers benefitted from an EC $11 million payout to date, and an additional $18 million was pumped into the economy via the refunds from the defunct Bank of Commerce. For many dimensions the objective indicators speak to better days.
We anticipate good progress at KOI Resort, Park Hyatt, Embassy Suites, T-Loft. We are encouraged by the good publicity recently disseminated by the Telegraph newspaper on Belle Mont Farm property, more readily referred to as the Kittitian Hill project. Belle Mont Farm was ranked among the top 50 hotels in the world.
Yu Lounge had an exceptionally good year in 2015 and the future portends of expansion at the facility including warehousing space. The yachting sub-sector seems to be off to a good start as well. Some of the world celebrities have visited our marina.
Christophe Harbour hosted the first ever Crew Fest Event – Caribbean Crew Experience, 2016. About 100 crew members from about 10 mega yachts had a spectacular experience in our Federation and are now better placed to promote St Kitts and Nevis as an alluring yachting destination.
Over the period January 15-16th, Christophe Harbour recorded the highest number of yachts at any one time in its history. Something good is happening in our Country. We are at the cusp of a new high level of growth and development.
In Manufacturing additional space is being provided for Harowe Servo Ltd in Sandy Point and an additional 50 jobs will be generated at that plant.
The Prosperity we deserve will not come by osmosis. We have to want it and discipline ourselves to achieve it. We have, as a people, to eliminate mediocrity and under-performance from our mindset. A new culture of high performance has to become the order of the day.
Safety and Security
One challenge which we face is the high level of retaliatory violence in the society. The Police and law enforcement agents must perform better in 2016 than they did in 2015. I salute those who went beyond the call of duty and pledge our fullest support. We commend the Police on the production and implementation of the 6 Point Action Plan to curb violent crime and we are encouraged by the results obtained to date.
In my New Year’s Address, I articulated Government’s intention to address the leadership issue in the Police service. I am happy to report that we have made substantial progress in that regard. Gazetted officers have been interviewed by a panel with respect to filling positions under a restructured police force, with four directorates as per the 2016-2019 Strategic Plan. The interviews are completed and the necessary evaluations and reports are expected shortly. These will form the basis for recommendations relating to the new command of the St Kitts and Nevis Police Force. These recommendations must be forwarded through the appropriate channels for action. In this regard, it would not be wise for me to speculate on the outcome or to pre-empt the work – some of which is constitutional in nature by entities whose decisions are critical to the appointments. As soon as the formal processes have been exercised I shall again report to the Country on this important matter.
Fresh Start Loans and PEP
Our efforts at earnings and wealth generation will continue and expand in 2016 as part of our Prosperity Agenda. Already we have provided just about $16 million to over 200 applicants to our Fresh Start Programme. The initial US $5 million support for Small and Medium Enterprises (SMEs) was enlarged by a further US $1 million to that programme. A substantial number of applicants of good quality remains to be financed. My government is considering a subvention to the Development Bank to support:
(i) additional resources to meet a portion of the unsatisfied demands for low cost loan financing for small businesses under the Fresh Start Programme;
(ii) a special tranche targeted directly at weaning persons off the PEP and into high earning employment. We promise to give our young people a step up from minimum earnings under PEP to a better standard of living slowly but surely we are getting there.
PEP has cost this Country $167.9 million in resources as at January 18, 2016. The CDB report indicates that for this gigantic sum only 130 persons were trained by the former administration now deemed unfit for purpose.
I am pleased to report that our efforts to reduce this hugely unsustainable drain on the public purse have borne some fruits. I thank all those private sector entities that have responded positively to our urging that they take on their payroll full time those PEP workers that have been contributing to their businesses for over a year. It is neither healthy nor fair that the government should, through PEP, subsidize the payroll of some private entities while some are denied. This creates an unlevel playing field and the development of a parasitic class.
Since my Budget Address on December 15, 2015, 58 employees have been upgraded from PEP to full-time employment in the Private Sector. Thanks to Team Unity, these former PEP employees will get higher wages, improved status, including improved probability of qualifying for loans and visas which were thitherto unavailable.
I say to all PEP workers in the private and Public Sectors, Team Unity is working for you. Be the very best that you can be.
To those PEP workers in the public sector we can assure you that where vacancies arise we will give consideration to permanent employment to the best of you in punctuality, attitude, aptitude and responsiveness to service excellence. I call on those who work on the maintenance of our physical environment to live up and, perform well. Give a fair day’s work for a fair day’s pay. Do not follow bad examples. Do the right thing.
I want to commend the Permanent Secretary, Osbert DeSuza, the management and support staff for the PEP Programme for their very professional oversight of the
Programme. We are moving in the right direction. We will re-organize and, restructure PEP to make it fit for purpose, providing relevant training and preparation of our young people for world of work entrepreneurship and responsible citizenship.
As we transition from PEP to permanent jobs for our people we are reminded that the Government must be firm against illegal workers occupying our work sites. We make it abundantly clear that the work place in St Kitts and Nevis must reflect predominantly citizens of St Kitts and Nevis and legal migrants into our Country. The Ministry of Labour has been tasked to do more monitoring of the construction, tourism and hospitality sectors to ensure full and faithful compliance with the laws and regulations governing work permits and CARICOM skills certificates. Our people must never be disadvantaged in the land of their birth. That being said we accept we are short in certain skill sets and that several entities are global in nature with policies for cross training and attachment. We are not insensitive to these realities and our labour policy accommodates these situations.
We ask all employers in St Kitts and Nevis, not to be insensitive to Government’s policies and, at all cost, to operate within the four corners of the law.
Work Permit Statistics
The Permanent Secretary in the Ministry of National Security has informed me that 509 work permits were issued in 2015. In 2014, 773 work permits were issued.
The Permanent Secretary has made several recommendations which are to be decided upon by Cabinet to clamp down on persons working without work permits. For instance penalty for late payments of work permit fees, limiting the number of work permits for entities, and revoking of work permits not in compliance with local laws.
We are establishing a system for better coordination between the Labour Department, PEP, Social Security, National Security, etc. We ask all employers to comply with the Immigration Act.
The Immigration Act clearly states that a person shall not engage or employ another person who is not a citizen or resident unless a work permit is granted. There are penalties – fines and imprisonment for breach of the Act.
Good Governance Agenda – SIDF, Parliament
There was no greater motivator for unity between PLP, PAM and CCM, than the good governance agenda. The megalomaniac hold on power by the Douglas Administration brought democracy to a screeching halt. For nigh 26 months Denzil Douglas defied the Parliamentary Opposition, Chamber of Industry and Commerce, Churches and the people, and used every ruse he could think of to prevent the tabling of the Motion of No Confidence. The protracted Court matter cost our Country several million dollars and the matter is still before the Court. Additional cost will still have to be borne by the people.
We are committed to a broad agenda of reform. The reforms will allow for:
- Constitutional reforms. We have piloted the first reading of the Bill relating to term limits for the Office of the Prime Minister. Other matters are also forthcoming, such as citizenship requirements for one to become a Member of Parliament and related issues of dual citizenship; and stricter provisions relating to the motion of no confidence (MONC)
- Electoral reform – including penalties for electoral officials for serious breach of electoral laws and behaviour that undermines public confidence in the electoral system – voting eligibility of citizens and residents;
- Expanding accountability and transparency to provide for example:
(a) Freedom of Information Bill
(b) Data Security Laws
(c) Empowering of Parliament as a pillar of democracy and of Government.
In this regard, we will pursue a new home for Parliament and provide Parliament with appropriate resources to do its work, produce Hansards on a timely basis and enhance the role of Clerk so as to ensure that the office holder consistently operates at highly professional and international standards. Also to be introduced are functional Parliamentary committees to facilitate broad spectrum legislative consultation prior to bills being introduced into Parliament.
These ideas have been advanced by Speaker, Hon Franklin Brand. We are fortunate to have the services of Mr Brand at this time.
I note recent publicity given to a rumour of Speaker Brand’s resignation. There was not a scintilla of evidence to such a resignation or pending one. Mr Brand has served us well so far, attempting to bring a new ethos of responsible behaviour to the National Assembly. He was present and presided over every sitting of Parliament since his election. He started to preside over the last sitting of the Parliament at which the Budget was presented. On account of an illness he did not preside to the end of the Debate.
We were careful enough to ensure a Deputy Speaker is in place. The absence of the Hon Speaker for any reason does not prevent the Parliament from functioning. Hon Michael Perkins has acquitted himself very well as he deputized for the Speaker.
Our Constitution never contemplated the breach which was introduced by the last administration – which blatantly refused to appoint a Deputy Speaker as per section 32 (3) of the Constitution. We have fulfilled the Constitutional requirement. The wisdom of this is self-evident. The Parliament can now function even when the Speaker is ill or absent.
Another rumour which has mysteriously surfaced had to do with the purported resignation by the Press Secretary. The Press Secretary had a one-year assignment with Team Unity. That one-year assignment will end on February 29, 2016. Mr Clecton Phillip will leave the office of the Press Secretary by mutual agreement on completion of the agreed period of service. We will in time determine where best his services can be utilized.
I wish Mr Phillip well as he finds other avenues to utilize his gifts and talents. I record my thanks to him for his contribution to the work of the Office of the Prime Minister and the Country at large.
Future of the SIDF
We are advancing to the point where we can say that a new entity will be legislated to perform activities previously undertaken by SIDF in a restructured, more accountable framework. We expect when the law is drafted, the new entity will:
- a) have an accountability relationship to the people’s Parliament
- b) be held accountable to present annual audited financial statements
- c) conform with section 69 of the constitution regarding the use of public monies
- d) will have a clear scope of work and areas of engagement. This will be one effort to prevent perfidious and squandermania of public resources.
In the interim Cabinet has determined that SIDF should have an interim Board of Councillors. A Board of Councillors has been appointed by the National Trust. It’s composition is as follows:
Dr Robertine Chaderton – Chairperson
Mr MacClure Taylor – Councillor
Mr Leon Lescott – Councillor
A Secretary is to be appointed. Such a person by the laws governing the SIDF must be a service provider. The Board of Councillors is actively pursuing this matter.
The naming of the Board of Councillors now provides for the effective management of the SIDF, the pursuance of those activities for which only a Board could properly engage. The general public wants the Board to give priority attention to ensuring that the long overdue audited financial statements are available as soon as possible and conduct the necessary evaluation of SIDF’s involvement in Kittitian Hill/Belle Mont Resort, Christophe Harbour and several other programmes and activities of the SIDF, including investigating potential misfeasance or malfeasance by the former Board of Councillors.