The public can expect revised income tax bands, an increase in the tax-free threshold and a 3% pay rise for all government employees this financial year.
That’s according to Premier Joseph E Farrell who presented the Government of Montserrat’s 2024-2025 Budget during a meeting of Montserrat Legislative Assembly on 22 April.
In his speech, Farrell, who is also minister of finance and economic management, announced that the total government outlay for the year is budgeted at EC$236.3 million.
This will be made up of $155.7 million for recurrent expenditure and $80.6 million for capital investment projects, he explained, including a $2.23 million boost from last year.
“The budget for 2024-2025 is indeed unprecedented in terms of its value, and the scale of impact it will deliver,” he told members.
The finance minister said the cash for recurrent expenditure will come from a forecast $155.7 million in revenue for 2024-2025, made up of $100.2 million in aid and grants, and $55.5 in local revenue.
The $80.6 million for capital initiatives will be accessed thanks to a number of United Kingdom and European Union programmes.
These include the UK’s Capital Investment Programme for Resilient Economic Growth, and the Improving Essential Equipment for Aided Overseas Territories Programme among others.
Fiscal measures
In his presentation, titled ‘From vision to reality: Transforming our economy, protecting our environment, and empowering our communities’, Farrell detailed the new fiscal measures.
He said they will include revised tax bands from April for ‘Pay as you Earn’ (PAYE) taxation which will reduce the amount of tax paid on overall income.
The tax-free threshold will also rise from $15,000 to $18,000, increasing the amount of tax-free income for everyone by $3,000.
In addition, all government workers will receive a 3% salary increase with effect from April, Farrell said.
Finally, the government plans to review revenue structures and concessions for volcanic sand miners. However, the exact details were not disclosed.
Priority areas
Farrell described a number of priority areas that the government will be focusing its budget on in the coming year, during the assembly at Montserrat Cultural Centre.
Firstly, $2 million will be spent on revisiting the Little Bay Masterplan which includes implementing new infrastructure, and advancing engagements with potential investors.
Another $1 million will go to launch the Sports Rehabilitation Project.
This will include creating a motorsport racetrack, refurbishing the multi-purpose sports centre flooring, and installing new sporting facilities at Lookout, Davy Hill and Drummonds.
A injection of $1.5 million will go to launch the Agricultural Products Expansion Project with initiatives to increase the production, yield and efficiency of the agricultural product.
The government also plans to invest in new electric vehicle charging stations to provide important infrastructure to electric vehicle users, Farrell said.
And to protect the vulnerable, $500,000 will be spent on policies and partnerships to ensure children and adults can access safeguarding services with protection and dignity.
Quality of life
The premier said this budget includes an allocation to support the undertaking of an Enhanced Country Poverty Assessment which will include a Household Budget Survey.
“These surveys will provide valuable insights into household spending behaviour, income distribution, and help us determine poverty levels,” he said.
“The information will inform social policies such as setting a minimum wage, which will in turn improve the quality of life of individuals.”
He said the government will continue to inject the “necessary resources” into Montserrat Utilities Limited.
Concurrently, a comprehensive review is being undertaken to determine a suitable business model with a conscious move away from the total dependence on fossil fuel.
Farrell added that $1 million has been budgeted for the Social Security Fund and another $500,000 will go towards skills enhancement in the workplace.
Infrastructure projects
The premier described several infrastructure projects which will received budgetary support in the coming year, however he did not detail the costs. They include:
The new hospital will move into main construction following the tender award.
The Little Bay Port will be commissioned and handed over into operations with up to 100 employees by the end of the year.
The detailed design phase of the new parliament building will be completed.
The social housing construction programme will begin in earnest, together with continued investment in existing social housing maintenance.
All works at Montserrat Secondary School will be completed as part of the rehabilitation project.
The Salem Community Rehabilitation project will be completed, and the Davy Hill basketball court project will be completed and available for community use.
The A01 road rehabilitation will get underway.
And the government will implement energy initiatives including the Geothermal Wellhead Maintenance Project, Energy Efficient Lighting and Environmentally Friendly Disposal Project, and the Post Covid Reduction through Energy Efficiency Project.
Governance
The premier said the government will review key legislation and policies that are critical to the efficiency of public sector operations.
It will build on the work done on the Public Administration Bill with a view to implementing the act to strengthen the framework that governs the functioning of the public service.
The government will also undertake a comprehensive review of the current remuneration structure, processes and levels in public service, Farrell added.
“This aligns with our policy of promoting good governance, attracting and retaining top talent and improving organisational performance,” he said.
The premier said the administration will also continue to implement pension reform that ensures a robust, equitable pensions system for all.
Farrell’s speech also touched on arts and culture, the digital transformation, immigration, access, tourism, education, housing, security and justice.
The premier’s 2024-25 Budget presentation is available to read in full here, or watch a video of the speech below:
