Anguilla government to borrow $100 million to maintain its projected rate of expenditure. Did I hear right? Did the radio announce that government is going to borrow $100 million from the public by issuing Treasury bonds?
I know it is not a lot of money for some of us. But, for a little island with a fragile economy like the one we have? On top of our present borrowing? I think it is a lot of money for little Anguilla.
It seems to me, ignorant as I am of public financing, that this measure puts Anguillians into more debt. I wonder if Anguillians would support this measure if they were consulted. I doubt so.
I imagine that the government thinking is, well, if it is a 10-year bond, the economy is bound to have rebounded by then, and it will be easy for us to pay it back in 10 years, together with the interest.
But, what if the bond issue is successful and government does nothing to cut back on expenditure? Will it not mean that, unless taxes are increased in a pre-election year which is an unlikely event, more borrowing will be necessary later in the year, and next year as well. So, it starts at 100 million, but what will the total debt end up being?
Who will pay this borrowed money if and when the government cannot pay it back? We who buy the bonds, of course. Repayment of the bonds will then be deferred and the rate of interest altered, as I am informed government has the right to do. Either that, or they will have to increase our rates and taxes to pay it on time.
Would it not be more sensible for government to do what we are all doing at this time? Reduce our expenditure to meet our income.
The last time I looked, Anguilla is not the USA. We cannot influence the economy by borrowing our way out of the hole we are in. My concern is that, more likely, we will be in the bottom of the hole that we are digging for ourselves.
I know the Chief Auditor has not been happy in his last few Audit Reports on the expenditure of the government of Anguilla. Should not the Opposition be doing their job of organising the Public Accounts Committee and checking how various government departments have been spending the public money?
This is a challenging time for us, and I do not think borrowing money to maintain our current life-style is the answer. At least announce some significant reduction of public expenditure at the same time. That would be more reassuring.