Questions on DFP Budget Response

In this and the next article we pause to share with you our answers to some questions we received about our response to the July 28th 2020/21 budget address by the Prime Minister of Dominica.

Question 1: The DFP released its response to the budget. It highlighted that there was a lack of reporting on sustainable development outcomes. Could you explain this observation?

Answer: There is a difference between outputs and outcomes. Output is the actual services rendered or the physical goods produced by an entity. But when goods or services are produced, there ought to be a strategic purpose for doing so. In other words, there must be an intended benefit for producing the goods or services that will result in improving the life of the beneficiaries; so that is the outcome. For instance, if a farm road is built, the road itself is the output. But the reason for building the road may have been to allow more farmers to have easier access to their farms in order to reduce cost and consequently increase output and farm income – the direct intended outcomes of the road project which also contribute to even higher-level outcomes or national level impact such as a reduction in poverty and overall improvement in quality of life of the people.

Sustainable development planning requires that government finances the right set of outputs that would best optimise the intended outcomes. If the set of outputs financed by a government over time are not resulting in the achievement of the set of outcomes desired to the degree expected or felt to be possible, and if such progress cannot be maintained over time to allow our children to be better off, then such development is not sustainable.

When a government spends the people's money, it must show how the goods and services produced are contributing to sustainable development outcomes. In this budget address, the government is reported on some of the goods and services it produced during the previous fiscal year, but it did not report on sustainable development outcomes – how are those outputs contributing to improving the life of the people. Is poverty falling? Is employment increasing? Is crime on the decline? Are people enjoying better health? Is the quality of life of the people increasing? There are measures to indicate whether these types of outcomes are being achieved. But this government is not reporting on these. I believe the chief reason for this is that the government has been failing miserably over the years in terms of improving the life of the people and so they rather just say that they built a health centre rather than say whether the health of the people is improving (health outcomes) and how the outputs have been contributing to that.

Question 2: What was the DFP's overall impression of the National Budget? Will it be able to sustain Dominica's needs in the coming year?

Answer: The budget address was a set of nice sounding words meant to deceive the public. But alas what's new with this government? For over 15 years, this government has not been able to lead Dominica down a sustainable development path, but it has had budget addresses with fancy words.

This budget address is no different, but what is worst with this budget is that it has no answer to the plight of the nation - that the country is on the verge of a great economic disaster due to the past mismanagement by the regime, and the situation is being made much worst by the COVID-19 crisis. In his budget address the prime minister makes excuses for his government's failures. He makes fiscal projections that are not realistic; for instance, the decline in tax revenue during 2020/21 is likely to be more significant than what is been shown in the budget, while the non-tax revenue which is dominated by flows from the Citizenship by Investment (CBI) programme, is likely to fall further rather than significantly increase as shown in the budget. Hence, the government is hiding the true extent of the problem that Dominica is going to face on the revenue front. If the government's expenditure is based on these dishonest or faulty revenue projections, then much of the elements that are not intended to be grant-funded, are not likely to materialize.

We hope that the grant-funded elements do come through, but let us wait to see. Overall, the government is masking the true extent of the looming economic disaster and the grants that they have spoken about is far from adequate to avert this disaster.

There are two more questions. What are some of the areas in which the DFP would have hoped to see financial allocation in the budget? The Digital transformation of Dominica was a highlight of the budget address. What does the DFP think of Dominica's plans for the digital economy? Great questions! Look out for our answers in next week's publication.

Kent Vital Political Leader Dominica Freedom Party