“The challenges we face are pronounced and they are real. Our deficits are too high to be managed, our debt levels are too great to be sustained and our economy generally too sluggish for comfort.
Both businesses and households, which have been bearing the brunt of the impact of the worst decline in nearly a hundred years are like Government holding faith for a quicker turnaround in our economic fortunes. For us in Government our mission has and continues to be about building a national understanding of the critical problems we face and forging an alliance for a complete national response that focusses on the implementation of appropriate solutions to our challenges.
The issue is not about some euphemistic expression of getting growth in the economy. Yes growth is vital to our economy, as it is to any economy, and every action that we take must be about promoting and securing growth for our economy. But equally, we understand that growth in the context of the existing economic climate and environment globally and domestically will only be achieved when our macro fundamentals are stabilised.
We are forging ahead to complete the full implementation of our fiscal consolidation programme. It is for these reasons that we will exercise a hawk-like and vice-grip monitoring to the process going forward, making required changes and further deepening existing interventions until we reach the desired objective in the shortest possible time of ensuring that we consolidate the public accounts.
This is essentially what the 2014/15 Estimates are designed to do. They have been crafted to lock in the fiscal consolidation programme which we announced last August and augmented in December by proposing to legislate an expenditure framework that more realistically reflects our current capacity to provide for our future needs.
And where any gap exists between what we want and what we reasonably can provide the objective is to make further adjustments to both revenue and expenditure to ensure our targets are attainable.
They also represent an attempt by the Government to clear the debt of all of the overhangs of previous exercises so that a fuller truer reflection of the gains from our efforts can be demonstrated, thereby making financial planning and financial forecasting more certain and accurate.
The basic reality of what we face now is that we are earning less than we are expending and so our deficits are growing too high and as our deficits climb, mainly because we are earning less, our debt levels are becoming exaggerated for all the wrong reasons. These conditions in turn are compromising our ability to grow the economy because we don’t have the fiscal space to make the most strategic investments which are required to reform, reinvigorate and ultimately expand our production base.
Now is a time in which great challenges confront us in the economy and society but countless opportunities abound to help us not only weather the storms that gather around us but to push this country and its people to even high levels of achievement.
(The above is an extract from the minister’s presentation during last week’s Estimates debate)
Chris Sinckler is Minister of Finance and Economic Affairs.
