OPPOSITION COMMENTS ON FINANCIAL BILLS TABLED IN THE HOUSE OF REPRESENTATIVES

March 11, 2010

At the last sitting of the House of Representatives a number of bills were tabled including the Lotteries Control amendment act 2010, Treasury bills amendment act 2010, the Central Bank of Belize amendment act 2010, the International Banking amendment act 2010 and the Banks and financial institutions amendment act 2010. The People’s United Party has expressed concern over the bills and today Love News spoke with Deputy Party leader Mark Espat.

Mark Espat – PUP Deputy Party Leader

“The position of the opposition People’s United Party is one of grave concern with regard to these amendments. There are two principal amendments that the government is attempting to make. One is as it relates to the way that the Central Bank lends to the Government of Belize monies and in that regard the Government is reducing the Central Bank’s overdraft and increasing the amount of treasury bills and treasury notes which are in effect lendings to Government that the Government can hold. We believe that at the end of the day this is really just an optical illusion because the change in the overall amount that Government can borrow from the Central Bank is immaterial. What the Government is trying to do is to drive down their cost of borrowing but because 90% of the Central Bank’s profits go back to the Government anyway it is at the end of the day an optical illusion. Of far greater concern is the amendment to the Treasury Bills Act. Government is increasing by a whopping 100% the short term debt that it can take out in the form of treasury bills from 100 to 200 million dollars and multiplying by three a 300% increase the amount of debt it can take out in the form of treasury notes from75 to 225 million dollars, that’s a net increase of an incredible 250 million dollars. We are concerned because the amendments will allow the Central Bank in effect to bluntly force the commercial banks to lend money to Government. When it does this of course it is lending the money that businesses and individuals deposit at the banks so at the end of the day it seems it is a back door attempt for Government to finance its deficit and its operations with local savings. We are concerned that that will crowd out the private sector and we certainly do not see that at the end of the day this will bring down interest rates at all which should be the objective.”

Espat said the PUP believes that if there had been a sound financial plan in place by the Government this move would have been unnecessary.

Mark Espat – PUP Deputy Party Leader

“If the government has or had a sound fiscal and monetary program which was tied into a national development vision then it would not be necessary in our view for the Central Bank to force the commercial banks to in effect lend Government money. These instruments, this debt, would be attractive and banks would want to hold a part of their liquid assets, monies that by law they must hold in a liquid fashion in Government debt. This in our view is a confession, an admission, that the Government itself does not have confidence in its own economic and fiscal policies.”

Prime Minister Dean Barrow will present the budget for fiscal year 2010-2011 on Monday. We asked Espat his views.

Mark Espat – PUP Deputy Party Leader

“If we are to believe what the Deputy Prime Minister said in an interview last week it seems that in addition to the prophesy of doom and gloom that the Prime Minister gave us at his press conference some weeks ago that things will get worse even as Belizeans cannot imagine that they can get any worse than they are. If we are to believe the DPM then it seems that in addition to this current budget falling short that we are going to be burdened with even more taxes. To us, we are bewildered at that prospect because as you know it has not been more than a few weeks that it was revealed that an incredible 43% of Belizeans now live and wallow in poverty. How can this Government in good conscience expect that we are going to roll back the tide of poverty if poor people are going to have to pay more of their already meagre earnings in taxes. We see no creativity, we see no vision, we see no answers. What we see is a Government, listless, drunk at the wheel of governance and unable to come up with creative solutions. If what they will bring on Monday is to tax Belizeans on top of the gas tax that they brought last year, the 40 odd million dollar gas tax, then I think there is a level of desperation and resistance that will certainly follow.”

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