Prime Minister and Minister of Finance, Dr. the Honourable Timothy Harris, credited his administration’s ability to introduce a $120-million stimulus package, designed to help cushion the economic fallout as a result of the COVID-19 pandemic, to the astute management of the country’s resources by the government.
“We succeeded in growing our economy five years in a row and recorded surplus after surplus on recurrent, overall and primary balances. We achieved these surpluses while paying off the $117 million in IMF debt and redeeming over 400 acres of land for our people at a cost to our Treasury of $200 million,” Prime Minister Harris said at Tuesday’s press conference to announce the economic stimulus package at the Ocean Terrace Inn (OTI). “As a consequence of our wise financial planning, we are in a better position to face this huge crisis and to respond using our own resources in the first instance. We do so to protect our people and cushion the distress of job losses.”
The Government’s response includes the injection of $5 million into the FRESH Start Programme; the injection of $10 million to boost production in the agriculture sector; the waiving of water payments for farmers; the provision of an additional $5 million to support the Poverty Alleviation Programme; reduction of the Corporate Income Tax rate from 33 percent to 25 percent for the period April to June 2020 for businesses that retain at least 75 percent of their employees and the reduction of the Unincorporated Business Tax rate by 50 percent from 4.0 percent to 2.0 percent for the period April to June 2020.
“We have been managing the country well and our savings so far has put us in an excellent position — the best position in the region at this particular moment in time — so that we can respond this way,” Prime Minister Harris said.
The prime minister thanked his Cabinet colleagues and Financial Secretary Mrs. Hilary Hazel, “for providing us with good, sound advice when that was required and which has enabled us now not to, as it were, operate in a panic state because we have kept the fiscal house in order thanks to their guidance and support. So now we are in a moment of need we are able to respond from our own resources.”
Other aspects of the stimulus response are the implementation of a moratorium on payments for electricity services for affected businesses and individuals for a three (3) month period, April to June 2020; the provision of funding through the Development Bank of St. Kitts and Nevis for mortgage loans to citizens of St. Kitts and Nevis in the amount of $30 million; and the reprioritization and acceleration in the pace of implementation of approved capital projects that could have a direct positive impact on the economy.