National Assembly wraps up debate on budget address |24 February 2021

Members of the National Assembly yesterday resumed and concluded debates on the proposed R11 billion budget, presented before the assembly by Minister for Finance, Economic Planning & Trade, Naadir Hassan, on Tuesday February 16.

Hon. François Adelaide, LDS representative for Baie Lazare, was first to kick off the sitting, in saying that the budget is a starting point towards more sustainable budgets in the future, and one which will finally help to diversify the economy, while also placing on citizens the responsibility to work and provide for themselves as opposed to relying on the welfare state and programmes.

“Such a budget, which is underlining the necessity of hard work, prioritising Seychellois first, facilitating the ease of doing business, ensuring that all who can contribute do so, that revenues enter the system where it should, assuring a good public service, and eliminating corruption, encourage production and participation, reducing the cost of living in Seychelles, and improving our way of living in our beautiful and blessed country, are beautiful dreams that we need to realise,” Hon. Adelaide stated, affording his support for the budget.

On the other hand, Hon. Wallace Cosgrow, proportional member for United Seychelles (US), said he is disappointed in the 2021 Appropriation Bill, as the measures proposed by Minister Hassan will severely affect the financial ability of many citizens and families, while small and medium enterprises who were already struggling as a result of the Covid-19 pandemic will probably be forced to shut.

He said that the proposed policies serve to “abandon” certain categories of citizens.

“It is a budget whereby the new government is sacrificing the majority of a subgroup of our population, and rewarding and enriching a minority. With the budget, those who already have will gain more, while the needy will be told to work harder. When I analyse the budget presentation, I am filled with disappointment and worry. I am disappointed because I realise that the minister and his team have missed an opportunity to propose initiatives to keep our economy afloat, and prepare it for recovery,” Hon. Cosgrow said.

As with other members of the opposition who had already voiced their responses, Hon. Cosgrow alluded to the 5 percent tax reduction for large business enterprises, questioning the implications of the tax cut on the economy as well as the decision to reduce dependency on social benefits, all programmes which are imperative to assist the most vulnerable groups within society.

“The 2021 budget did not bring about much hope for our Seychellois youths in the economic development of our country. There has been no mention or special initiatives for youths. However, we find many instances whereby youths are prepared to make their contributions, be it in sport, environment, the professional sectors, and even on prominent matters such as governance,” he added.

With regard to the development of alternative sectors which could potentially generate additional revenues for the country, so as to become more resilient in future, Hon. Cosgrow stated that there has been no real proposed initiatives on how this will be attained, and that the plan for the development of the fisheries sector is somewhat haphazard, and that the new administration “is simply piggybacking off the development plan for the sector which the previous government had already approved”.

Hon. Norbert Loizeau, LDS MNA for Bel Air and Hon. Richard Labrosse who represents Plaisance district, both expressed the view that the Appropriation Bill and budget presentation is indicative of the fact that the government is capable of making hard decisions, especially at an exceptional time.

Both MNAs acknowledged the necessity for drastic changes and sacrifices by both citizens and government, in order to once and for all address the economic and financial hardships and troubles and shortcomings experienced in the past.

“For this year, it is predicted that the tourism industry will further depreciate, predicted up to 65 percent, and this in itself, we can imagine what implications it will have. Through this, Seychelles is expected to lose US ($) 332 million,” Hon. Labrosse highlighted while illustrating the gravity of the economic downturn and the challenges the ministry of finance and government are confronted with, in seeking financing to sustain the budget and economy.

“The government has presented an allocation of R11 million for students at school, so I urge you to take your education seriously. Seize all opportunities put in place for farmers and fishermen, to expand your business to create more productivity. Through financing schemes put forward by government, come forward and seek such. For those who are struggling to make ends meet, the government will assist you through its social safety net programmes, whereby R77.8 million has been budgeted. For you, the senior citizen, your pension is assured. This budget left nobody behind,” Hon. Labrosse concluded.

Following suit, Hon. Philip Monthy, member for Cascade, noted that the Appropriation Bill presents a deficit which means that the government will need to borrow to cover the country’s services and expenditure for the year, adding that the budget is one which will force the country and citizens out of their comfort zone, and to undergo a transformation, also calling out to the population to come onboard with government’s vision to rebuild the economy, and to rebuild better.

Similarly, Hon. Regina Esparon, LDS elect representing the Glacis constituency, as with others on her side of the table, outlined the various instances of mismanagement of funds under the previous administration, a point which they argue has landed the country in the economic mess that it is presently facing.

As expected, Hon. Johan Loze spoke strongly about the appropriation Bill, setting forth numerous propositions to generate revenue for the domestic economy. He touched on the issue of Air Seychelles, what he termed as an overdue comprehensive tax reform so as to better collect revenues for government, and the possibilities of collecting additional revenue from the introduction of the Goods and Services Tax (GST).

“The budget does not make any provisions for the creation of wealth. It’s as if wealth will create itself. But where will you get the famous employment? The creation of employment is normally driven by the creation of wealth, but if anything, the wealth creation is to shrink with the measures that they are taking,” he said.

“The budget is one which is completely incomprehensive to me. It would seem that in the months that recently passed, there have been things that have been inserted or removed in the budget, by someone or a high official, and even the minister and his colleague have been advised not to touch anything,” he stated, saying that in cutting costs, government is also cutting and abandoning the people whom they are supposed to represent, while at the same time, increasing government expenditure.

Hon. Loze also recommended policies and decisions that aim to create more wealth and more employment opportunities for Seychellois, additional opportunities for entrepreneurship and business development, in the interest of youths, Seychellois families and the general economy.

In comparison to Hon. Loze, Hon. Gervais Henrie expressed his opinion on the R11 billion budget, asserting that the measures introduced by the new administration is geared towards pulling the country out of the first economic recession in about 12 years.

“Our nation is facing a primary fiscal deficit to a sum of R2.642 billion, equivalent to 11.8 percent in GDP, and a total deficit of 53.3 percent of our GDP for 2021. This is the highest deficit since the macroeconomic reforms in 2008, and is because of a pandemic.[…]. In general, the measures announced are positive, irrespective of the situation you are in; the budget will impact on your life every day, in one way or another. The budget lays the foundations to transform our country in the next five years, through a very organised process to ensure that we return to a sustainable economic growth rate,” he said.

Hon. Sandy Arrissol, LDS elect for Bel Ombre, concluded yesterday’s sitting, also echoing similar views to those expressed by LDS members, in calling citizens to rally and to work hard.

While he recognised that certain proposed measures will be strict, it still makes provisions to provide vulnerable groups in society with financial assistance, and any other form of assistance that they should need, with the exception that under the new administration, this will be based on meritocratic principles, and the systems reformed so as to eliminate abuses and corruption, necessitated by the Covid-19 pandemic and economic recession.

“Together we can do it, and together we will do it,” Hon. Arrissol said to conclude, after having outlined the numerous ways in which he and other LDS members feel that the previous administration mismanaged funds and government revenues, landing the country in the mess the LDS administration has only just inherited a few months ago when it assumed power.

Minister Hassan will once again attend the sitting this morning to address the MNA’s budget responses.

Laura Pillay