2020/21 Budget Communication 2020-21 Budget Communication - Final (1)-compresse | Page 19

In addition, we have begun discussions with the relevant Unions with a view to seek their support
for the pausing of all increments to permanent and pensionable civil servants, as well as
temporarily suspending salary increases, and deferring salary increases attendant to promotion
exercises. To be clear, the intent will still be to process and grant promotions, as we recognize
that some are long overdue. However, the attendant salary increases would be deferred at least
until January 2021, when we have a better view of the circumstance. Similarly, any new
appointments will happen on an exceptional basis only.
We will also be reviewing all consultancies to determine which can be deferred or canceled.
Retirees will be allowed to naturally complete their engagements and will not be renewed over the
next year. However, these measures will be monitored, and may be adjusted as the economic and
fiscal situation develops, including the payment of back pay related to promotions and increments.
Mr. Speaker,
Over the past year, we have made some strides in preparing the groundwork for the reform of
SOEs. However, the need to accelerate this reform has become abundantly clear, with the added
pressure of COVID-19 relief on public funds. For FY2019/20, SOE subventions represented
nearly 16 percent of recurrent expenditure. Notwithstanding additional outlays due to the impact
of Hurricane Dorian, this level is simply unsustainable.
Thus, we have asked all SOEs to implement a mix of cost savings and revenue enhancement
measures this Budget year. As a result, we are budgeting to receive some 10 percent, or roughly
$21 million in savings from a decrease in subventions to these entities. Over the medium term, it
is the intent of the Government to further rationalize these entities. The main objective is to push
SOEs to become self-sufficient, thereby alleviating the need for the Central Government to
subsidize their operations on an annual basis. To this end, we have targeted a $100 million annual
reduction in subventions over the next four years, as these entities move to optimize efficiency and
cost recovery strategies.
These cost recovery strategies may include the introduction of user fees in some cases, or an
increase in existing fees for other SOEs as a way to enhance revenue. Similarly, some SOEs may
opt to adopt cost reductions such as merging, reducing operating costs, or revamping services with
a view to eliminating non-efficient services.
vi.
Fiscal Outlook for FY2020/21
Mr. Speaker,
Given the host of policy measures I have just laid out, I wish to return to a more detailed look at
the Budget numbers and assumptions associated with the fiscal outlook for 2020/21.
In November of last year, the Government invoked the Exceptional Circumstances clause (13) of
the Fiscal Responsibility Act, 2018, which allowed for a temporary departure from the prescribed
fiscal targets, given the impact of Hurricane Dorian. As such, we presented within the 2019 Fiscal
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