Hurst Reports on Cabinet of Wednesday January 20 2021

HURST REPORTS ON CABINET of Wednesday, January 20, 2021

The Cabinet of Antigua and Barbuda met both face-to-face and virtually, three members deciding to use the electronic means. The Cabinet also invited several officials to attend the sitting in order to enhance its decision-making.

1.Three officials from the Ministry of Finance were asked to provide the Cabinet with an overview of the fiscal and economic performance of the nation-state during year 2020, and to share proposed fiscal strategies in 2021 to lower the level of economic pain which the Covid-19 crisis inflicted. The Deputy Financial Secretary, the Budget Director and the Debt Manager provided Cabinet with data and graphs showing that the revenue collected in 2020 fell below 2019 levels by approximately $100 million dollars. Not surprisingly, collections in the first three months of 2020, before the lockdown caused by Covid-19 on March 26, 2020, the revenue collected exceeded the amounts of the same period in 2019 by 18%. The growth which was predicted by the ECCB for 2020 was 7.5%; however, the impact of Covid-19 has been to cause the economy to shrink. As gross domestic product (GDP) decreases, the debt to GDP ratio rises, causing the number to move from 70.3% up to 99.5%, though borrowings were not increased spectacularly.

Tax collection and compliance were pursued by the government arms charged with that responsibility, such that property taxes moved from $18 million to $31 million; more than 5,000 new properties were brought on to the tax rolls.

The Cabinet made a determination to reduce the amount of discretional waivers; the officials reported that waivers amounted to almost $98 million dollars in the year, and that by reducing waivers, tax collection overall would be positively impacted. The waivers of duties and taxes on imported/used automobiles has already ceased, and that approach has strengthened collections.  A discussion on the Revenue Recovery Charge (RRC) followed. Collection of revenues from tourism accommodation has also risen as more small properties are identified, primarily air b-n-b properties, and taxes collected from the owners.

The Procurement Act comes into effect on June 1, 2021, when the Tenders Board Act will no longer be the law. It will require that all contracts, regardless of size, come before the equivalent of the tenders board for approval. The discretion to waive tendering will have come to an end.

2.Six officials–including the Chief Medical Officer, the Chief Health Inspector, the Commissioner of Police and a Deputy Police Commissioner, the Permanent Secretary from the Ministry of Health, other officials from the enforcement arm of the Police and the CBH–were invited to Cabinet to address the application of sanctions, as the number of Covid-19 infected persons continue to increase. At the time of appearance, 27 active cases were being treated for the infectious disease; and, gatherings at bars, on sidewalks and in the vicinity of entertainment centers, at restaurants, funerals and weddings–where fewer people are wearing masks and practicing social distancing as required during this emergency period–is being observed.

It was agreed that all of these establishments will have posted a sign for all patrons to see, indicating the maximum number allowed inside of the establishments; patrons who loiter on the sidewalks outside, drinking and clustering, are to be asked to disperse for fear that the disease will spread among crowds and contact-tracing will then become impossible to pursue. The increased enforcement was tasked to the CBH and the Royal Police Force, and will be evident over the next three weeks. The Cabinet agreed that the maximum number allowed in any establishment will vary according to the size and the application of social distancing rules, very much like churches now operate. The notion that one-size-fits-all has never been and cannot be reasonably applied; carrying capacity is the standard to be applied. Exceptions to this carrying capacity rule apply at the graveside, when burials are taking place; 25 mourners are allowed  in the cemetery. At wedding receptions, following marriages in church, the Cabinet agreed that only 10 people are allowed at these receptions. These two social gatherings are responsible for a significant number of infections; therefore, special rules governing their practice are to be followed and enforced.

A discussion about immunization and vaccines followed. Three vaccines have been approved by the PAHO/WHO, and Antigua and Barbuda will abide these three for the time being. Other vaccines are being examined for use; when they have been approved by PAHO/WHO, then these additional vaccines will be added to the sanctioned list. Private practitioners will require authorization to import and apply these vaccines in their offices. The regulations governing their use will shortly be published. Covid-19 remains as a serious threat to the population of citizens and residents of Antigua and Barbuda. Vaccines will likely not become available for widespread use, nevertheless, until after March 2021, or after the first quarter.

3.The legislation governing medicinal cannabis requires that a Board be assembled to examine the application for licenses and the determination of compliance with the strict rules governing production and manufcturing of the medicines. Four representatives of that Board were invited to Cabinet to report on the progress made thus far. The Cabinet was informed that 5 applications for licenses have been received thus far, and one provisional license has been granted. The fee for a license is $325,000 and there are to be no waivers, the Cabinet agreed. The law anticipates that for religious purposes, Cannabis grown by approved Rastafarian groups, will not have those fees apply, but will still be required to abide by other strictures as articulated in the law.

The Cannabis Board requires an injection of funds and seven employees to allow it to function. The employees will be drawn from government departments, since there are to be no new hirings within the public sector; and, funds will be provided to allow this sector to begin to yield returns as anticipated when the law was adopted.

4.The Cabinet agreed that a moral obligation exists to pay severance to former LIAT employees throughout the countries where LIAT once operated. The Government of Antigua and Barbuda will make a special plea to all regional governments, through the Administrator appointed by the Court under the amended Bankruptcy law, to make payments to their nationals after negotiations with the several unions that represented the LIAT workers. In addition to payments in cash and other systems of value, the Antigua and Barbuda Government will be offering scholarships to UWI Fourth Landed Campus to nationals who once worked for LIAT here, in order to enable them to re-tool.

5.The Cabinet has agreed to make amendments to the Residency Program as it now exists, in order to make it more attractive to foreign-born workers who may not wish to be citizens but who wish to reside in Antigua and Barbuda  lawfully. Currently, the cost of such a residency program is US$20,000. The Cabinet agreed that the Attorney General’s Office will restructure the legislation and fit it under the Citizenship by Investment Program for easy management. The fee is likely to be reduced to make it competitive and the status may lead to citizenship in such a way as to strengthen the CIP not weaken it. Consultations will begin in earnest immediately and the Attorney General will report to Cabinet before the amendment goes to Parliament.

7. The Budget presentation will take place next Thursday, January 28, 2021, at 9:00 am in the parliament. The Budget debate will follow at least 7 days later.