PREMIER ANNOUNCES TCI STIMULUS PACKAGE IN RESPONSE TO COVID-19
As a Government in deciding on a timulus package our goal was to ensure that we can help residents to survive even after this health crisis. Whether we want to accept it or not and through no fault of our own we have found ourselves in this situation which I can only describe as hurricane mode. As such we had to take a holistic approach in ensuring that we can survive in the long run. We have seen packages announced in other Caribbean countries and have reviewed them and have taken the position to offer a more comprehensive package which will not just include government-assisted programs but also service providers in critical sectors.
Cabinet today approved a full package of benefits that will serve as a direct economic stimulus following the fall out in economic activities across the Islands as a result of the global pandemic – COVID 19. The stimulus package is being proposed to lessen the impact of the global crisis on residents, whilst allowing the Ministry of Health to strengthen health policy responses.
The TCI is a tourism dependent country and a fall out in tourism revenue will affect the workers and micro-small and medium enterprises who are directly involved in this sector as well as businesses that serve this sector. The rapid spread of the virus has dented the global growth outlook in our major source markets and they have lowered their outlooks. Also, the International Monetary Fund (IMF) has projected negative growth for the Caribbean region. The ports of entry within the TCI have been closed to visitors, halting economic activities within the hospitality industry. Economic prospects are damaged. It is estimated that the closure of businesses will affect approximately:
- 10,000 hospitality workers (This would include, but not limited to, cruise sector businesses and workers, hotel staff, water sports operators, taxi drivers, restaurant employees, concierge services, spa and salon services);
- 1,261 self-employed individuals and;
- Approximately 2000 Micro, Small and Medium Enterprises (MSMEs)
The Economic Package today addresses these individuals and businesses.
We have created a package for the individual, the small business as well as the large businesses. We have likewise, agreed measures that can be stimulants for economy. Our deliberations have not been solely what Government can do but we have reached out, lobbied and in some cases negotiated with critical sectors to offer compassionate responses.
In order to deliver our assistance, your Government will run a deficit Budget of over $100m, draw on savings, borrow and establish a line of credit. Now, turning to the Turks and Caicos Islands stimulus package, I would like to report that the Turks and Caicos Islands Government will be providing approximately $45m in direct financial support and waivers of taxes, fees and charges. This is independent - All TCIG’s injection of $35.2m through its Development Fund Capital Projects. This is being presented after careful consideration of a potential loss greater than $100m in revenue and careful consideration of the fact that we will be funding any budget deficit by a credit facility/loan or grants from the UK Government and the previous year’s reserves. We also took into consideration the fact that our economy is dependent on tourism, which is the major revenue earner. We are cognizant that multiple persons across the TCI will be impacted such as hospitality workers, taxi drivers, land and water tour operators, employees in the transport sector, servers in the hospitality industry, bartenders, cruise sector dependent workers, spa workers just to say the least. For this reason, your Government is presenting this stimulus package of an excess of $45m.
From this $45 million, $15 million is to be made available in direct assistance to employees and self-employed within the hospitality industry that would have been laid off, seized operations or terminated since March 16, 2020. It is being proposed that these individuals will be given a one off payment of $1,200. This is in addition to the payouts that they may be receiving from their employers. The payment will be further assessed once additional funding is identified by MOF. We felt that since households are diverse and are made up of a single working individual or in some cases persons from other islands who may be sharing households just to make ends meet but still have mouths to feed, it would be better to pay employee and not households.
The eligibility criteria will be released via RTC and on the Government website.
- Two forms Government issued ID
- A copied of last employment payslip/NIB contribution
- Employee Banking details
- Employee NIB number
- Proof that Employee is still in TCI
Payment will be processed by Treasury and logistics will be announced further.
We are keenly aware of the challenges being faced by the MSME sector in the wake of the Covid-19 pandemic particularly in relation to businesses that provide services within the Tourism industry. As such, the Government in its efforts to support the small business community, has secured a $10m fund that will provide cash grants to the MSME sector. The grants will be issued to micro, small and medium sized businesses under what will be known as the Coronavirus Business Assistance Grant.
The Coronavirus Business Assistance Grant will provide cash flow assistance by making available sums of up to $2,000 for micro businesses, $3,500 for small businesses and $5,000 for medium sized businesses. We will shortly be providing additional information about the scheme in particular, how to apply and qualify for the grant. The survival of the MSME sector is important to the overall growth and success of the Turks and Caicos Islands economy. We therefore encourage MSMEs to take advantage of the funding being made available under the Coronavirus Business Assistance Grant as the Government continues to work to safeguard your survival in what is now a deeply fragile, world economy.
The eligibility criteria for the grants would be as follows:
- Copy of Business licence for the period 2019 to 2020
- Copy of last NIB contributions paid for February 2020. This would provide proof of the number of employees that are employed by the MSME. (for MSMEs that are not registered with NIB, upon confirmation of NIB registration that would be eligible for a grant of $1000)
Under this stimulus-package the government has increased the social welfare budget by 100 percent. From this increased amount an additional $500,000 has been added to the budgetary allocation to further boost the home-help programme that is being managed through the social welfare programme. The Home Help programme will therefore be doubled to meet the needs of additional persons that may become destitute due to the fall out in global economic activities. Additionally, a payment moratorium will be placed on existing TC Invest mortgages for the period April to September 2020. This moratorium will be offered to all mortgages holders who are not in arrears with mortgage payments.
An increase of $5m for Concessions Under Refurbishment Policy (Currently $10m): The Government has also revised the Refurbishment Policy Concessions to support Villas who may wish to refurbish during this time. Currently TCIG has approved a total of $10m a year in concessions relating to the refurbishment policy. Ministry of Finance has proposed that this annual allocation be increased to $15m for the period April 2020 to 31st March 2021.
There will be a delay in payments of the following licences until July 2020:
- Business Licence Fees
- Sport and Fishing Licence Fees
- National Parks Licence fees
- Boat or Vessel registration fees
- Mooring Fees
- Capital Fees
- Radio and Inspection Fees
Entrepreneurs are however still required to complete the application process. The projected revenue deferred is approximately $1.1m. This deferral would be extended to all persons/businesses that currently hold or held a licence for FY 19/20.
TCIG will waive all charges for water for the months of April –June 2020. No disconnections would be carried out during the period April to June 2020. ($9.7m Write Off of Long Outstanding Water Arrear) The projected revenue to be foregone is $9.7m. This stimulus item would encourage clean living and assist providing water to residents on the islands of Grand Turk, Salt Cay and South Caicos.
Waiver of Duties (where applicable) and CPF for basic food items and essential medical supplies: During this period of economic uncertainty thrust upon us by the Covid-19 pandemic, the Government remains committed to protecting the consumer. Therefore, by virtue of the powers afforded to me under Section 16(1)(d) of the Consumer Protection Ordinance, I will explore the option of using it a price ceiling on basic food items and essential medical supplies. These items and supplies will constitute the Covid-19 Basket of Goods.
An Order will be issued giving effect to the Covid-19 Basket of Goods which will make it mandatory that every vendor, that includes supermarkets and grocers, observe the prices set by the Government in relation to each item in the Covid-19 Basket of Goods. The Turks and Caicos Islands is a free market economy however; these are unprecedented times that require a shift from the ordinary.
The Government’s intention is not to frustrate the businesses that supply us with these essential items but to act to ensure that every citizen and resident has adequate access to food and essential medical supplies so that we as a people and country are able to survive and combat this deadly virus. We will therefore permit all items in the Covid-19 Basket of Goods to be exempted from Customs import duties and the Customs Processing Fee for a period of two months. I wish to be clear that the imposition of a price ceiling on the Covid-19 Basket of Goods is a temporary relief measure that will be in effect for a period of 6 months.
$4m Waiver of Hotel Restaurant and Tourism Tax for March and deferral of payments for 3 months: The Government will also waive Accommodations Tax (HRTT) for the month of March 2020 and will delay payments for May and June 2020. The projected revenue foregone and deferred is $4m. The waiver would be contingent on the fact that the taxpayer is current in payments. This initiative would require an amendment to the current HRTT legislation.
Support for Tenants of the TCI Airports Authority: The Government will also be supporting the tenants and will offer a benefit to these businesses.
$35.2m Development Fund: The Government has allocated $35.2m in new Development Fund Projects. Amidst the COVID-19 pandemic, the Development Fund allocation for FY 2020/21 has had to be revised downwards from approximately $47.5m to $35.2m. This reduction of approximately $12.3m will form part of the economic stimulus programme that will be used to help individuals throughout the Turks and Caicos Islands to bridge the gap between the original income levels received, and the reduced income levels that they will now receive as a result of the impact of the COVID-19 virus on the tourism sector which many are employed in. The reorganization comes at a time when it is envisaged that the projects contained in the programme needed to be prioritized so that they can act as a stimulus to the economy in the event that the world economies go into a recession following the impact of the COVID-19 virus. The projects therefore that were prioritized will create employment opportunities for Islanders on every island and this would in itself multiply in the economy thus lessening the impact of any recession. The government will be working with contractors and through policy initiatives will seek to ensure that citizens are hired under these projects.
In addition to the new projects proposed for FY 2020/21, there is approximately $30m in projects that will be carried forward from FY 2019/20. With the amount of projects being implemented throughout the islands, money will continue to multiply and consumer spending will increase and act as a stimulus to the economy.
We would also like to remind the general public of NHIP provision, that allows the unemployed to continue to procure access to TCI’s health facilities for a period of 18 months. All the employee has to do is register with Labour and NHIP.
We are aware that the current COVID-19 crisis is evolving. As such Your Government will be providing exemptions for a three-month period to assist with boosting inward investment. The initiatives would include:
- A Reduction of 50% in Stamp Duty for a period of three months
- A 50% of reduction of planning fees for a period of three months
- A waiver of Customs Duties on Construction Materials for a period of three months
And there will be a review of same after this initial period.
In addition to what the Government is doing, the survival measures also include myself, the Ministry of Finance team and other Ministers and government officials: Liaising with the banks and utility and telecommunication companies.
I am pleased to say that the Banks have agreed to
- Allow a moratorium of up to six months’ payment on existing loans and mortgages
- Allow a temporary overdraft financing for Commercial Banking and Business Banking customers. This relief was requested by larger businesses and we are happy to have been able to petition the bank to allow an increase to financing with less red tape.
The Provo Water Company’s Response: the PWC has agreed that there will be no disconnections ….
The Telecommunications Sector Response
FLOW has agreed a NO Disconnection Policy and are prepared to offer additional measures. We are still negotiating with Digicel who have said that they are exploring initiatives to support its customers at this time.
The Electricity Service Provider
Fortis TCI has agreed to:
- Wave all Penalties for 60 days.
- Work with all persons most impacted and extend credit packages. They will likewise work with customers referred by Social Services Department and will also be extended on a case by case basis
I am also pleased to advise that through negotiations with His Excellency the Governor, TCIG and Fortis TCI it was agreed to a delay of the rate increase for a period of 3 months. I must encourage persons that even though this was agreed and they should still try to pay if they have the means and are able to pay.
Appeal to Benefactors of TCIG led Negotiations with Private Companies
We have given a direct cash injection to individuals and businesses, we have addressed your water, light and internet service providers on your behalf, we have addressed Banks for those who hold mortgages or who wish to excess increase financing with less red tape.
Appeal to Landlords
We are asking landlords to be considerate and do not evict tenants during this period and like my Barbadian counterpart has said, this is a request that I am prepared to follow up in Law.
We have negotiated for all impacted sectors and we ask that you do the right thing: whether you are employers or employees.
$2m Additional Health Care Spending: $2m is being made available to the Ministry of Health to ensure that health-related spending is available to protect people’s wellbeing, take care of the sick, and slow the spread of the virus. The Turks and Caicos Islands Government Contingency Fund has been increased to $7m.
It is important to note that this stimulus-package is not intended to replace all of the earnings and can never replace the earning of individuals or establishments. The intention is to ensure that as a Government we try our best to provide some assistance which can help in easing the financial pressure. As a Government we would want to do more. However, we are not sure how long this crisis will last and we must therefore be prepared for the long-haul. We will do our part in ensuring that persons are able to survive. If things get worst, we will take a further look at the capital program and other aspects of the recurrent budget to provide further injection. I must remind us that we are and will always be a resilient people and there is that ever familiar saying that “tough times don’t last; tough people do”. These are indeed tough times but I have confidence that we will use that level of resilience that we have used in the past whether for hurricanes or economic turmoil to take us through this test and I have no doubt that we will emerge victorious.
We have been bold on health and we have taken bold steps to help our people and our economy. Your Government will run a deficit budget of $103.1m, draw on $73m savings initially, draw on an already in place loan facility of $15m; secure a credit line facility while offering this $80.2m Stimulus Package with direct cash injection of $45m in grants and waivers. And all in the face of having to maintain Government’s obligations to its staff levels and the people of this country through the continued provision of critical services and as we continue preparation for a new hurricane season in 2 months. I must say thank you to HE the Governor and the UK Government for the approvals to relax the UK Framework Document, to allow a deficit budget and to seek a credit line.
I encourage us all to partner in this crisis by heeding health’s advice, obeying the laws in place particularly the curfew set and which begins at 8pm TONIGHT, support the Police in their efforts and protect yourselves and others. We are in a crisis and it is known and proven that crises are not wasted when it brings out the best in us. You have in your Government a strong partner in crisis and we look forward to your partnership.
God is still good. He has kept us all along and through many hardships and I am confident that He will continue to do so.
As leader of this country, I am calling this country to a time of fasting and prayer on Monday, March 30, 2020 from 6am to 6pm. Pastors from across the TCI will be invited to pray over Radio Turks and Caicos. Please prepare to join in.
May this Great God of Deliverance and Mercy continue to bless us all and may God He continue to bless these Beautiful by Nature Turks and Caicos Islands.