Public Expenditure Review Commission holds Town Hall Meeting on Thursday

His Excellency Ambassador Wendell Lawrence

BASSETERRE, ST. KITTS, JULY 27th 2011 – The Public Expenditure Review Commission holds a Town Hall Meeting at the Basseterre High School on Thursday.

The general public is invited to attend the meeting which begins at 7 a.m.

The Expenditure Commission, which has been established by the Monetary Council of the Eastern Caribbean Central Bank (ECCB), is to investigate and make recommendations on appropriate ways of rationalising the form and functions of public sector expenditure in the member countries of the currency union.

It is proposed that the Expenditure Commission be composed and operate in a manner similar to that of the Commission on Tax Reform and Tax Administration Reform. This involves the holding of consultations with representatives of the public and private sectors throughout the Currency Union to obtain input on the critical issues relating to public expenditure reform.

The Commission is expected to examine and make recommendations on the role of Government in the ECCU under the umbrella of the Economic Union, examine the expenditure structure and trends in the ECCU, examine the experiences of countries that have undertaken expenditure reforms, identify best practices in expenditure reform programmes, review the political, economic and financial context of expenditure reform in the ECCU, identify areas for cost sharing among the countries of the ECCU, identify programmes that could be privatized, make recommendations for improving the efficiency of government expenditures and on the operational efficiency of the public enterprises and develop a medium term fiscal framework to ensure fiscal sustainability.

Two of the six eminent persons from the ECCU appointed to the Commission will be in attendance. They are His Excellency Ambassador Wendell Lawrence and former Ambassador and University of the Virgin Islands Professor Dr. Simon Jones-Hendrickson will be in attendance.

According to the Eastern Caribbean Central Bank efficient fiscal policy is a prerequisite for macroeconomic stability and economic development. This is being addressed under the Fiscal Reform Programme, which is a component of the Eastern Caribbean Currency Union (ECCU) Eight Point Stabilisation and Growth Programme. The Fiscal Reform Programme aims at improving the efficiency of the fiscal regimes in the ECCU. In particular, member countries are encouraged to generate or increase their level of domestic savings to facilitate economic growth and development.

Most of the member countries of the ECCU have implemented tax reform programmes which have contributed to growth in government revenues. However, the countries are faced with rigid expenditure structures and rising government expenditures. This has contributed to high fiscal deficits and the accompanying increases in public sector debt with some countries recording debt to GDP ratios above 100 per cent. The member countries have agreed to reduce their debt levels to achieve a debt to GDP ratio of 60 per cent by 2020. Thus, there is an urgent need to address the growth in government expenditures, based on consensus on the role of government in the economies of the currency union.