PRESS RELEASE :In response to the comments made on SBC 8 pm news
September 10, 2020
The Ministry of Finance, Trade, Investment and Economic Planning would like to refute the comments made on the 8 pm news on 9th September on the Seychelles Broadcasting Corporation (SBC) that several policy decisions of Government are ‘not founded’ and ‘have not been properly analysed’. These comments have also been the basis of many other debates on the Government budgets in the past, which is not correct.
The Ministry’s main policy objective remains to ensure that there is fiscal discipline, debt sustainability and value for money.
The recent measures announced in regards to the reduction in rent for PMC tenants and the HFC loans and the introduction of the Small Business Support Fund (SBSF) follows extensive dialogue with various stakeholders and analysis on our current social and economic environment. To clarify, the reduction in rent would cost Government approximately R60 million from September 2020 to December 2021. This follows the salary assistance to private sector employees, tax deferment and loan schemes to SMEs and large businesses.
Government could have chosen not to intervene in this unprecedented era. This would have meant that in order to survive, businesses would have had to carry mass redundancy. This would have then prevented additional cost on the budget, allowed government to continue maintaining its annual fiscal surplus for 2020, continue to ensure the debt reduction target to 50% by 2021. In doing so, this would have had other adverse impact on the country, especially the ordinary citizens, in terms of poverty, increased in social ills and crimes, since no assistance would have been available for the 5,000 odd businesses and self-employed in particular, that have applied for the FA4JR assistance.
The FA4JR is by far the most costly policy that Government have introduced to guarantee the salaries of the employees in the private sector. The eligibility criteria that have been put in place, although heavily criticized, were set to ensure that only those in need of assistance would benefit.
The Government is conscious of the current socio-economic environment and is continuing its work to formulate other medium term policy measures to adjust to the persisting covid-19 pandemic. Whilst tourism would remain a key pillar of our economy, there is a national effort to further identify new opportunities in the other sectors to compensate for the loss in the tourism sector. However, we need to be mindful that certain past economic activities would not necessarily regain the strengths it had decades ago, in view of evolution and competitive advantages of other economies.
The citizens are also reminded that they have a key role to play to ensure that consumption spending is made more prudently.
The Ministry appreciates the views and comments from various stakeholders that contributes to the policy decisions process but calls on contributions that are more constructive, so as not to mis-lead the public.