2025 Budget: PM Drew Boosts Sustainability Plan, Emphasises Fiscal Prudence

Federal Minister of Finance, Prime Minister Dr. Terrance Drew, has announced a suite of initiatives aimed at fostering long-term economic benefits for Kittitians and Nevisians. The announcements came during his delivery of the 2025 Budget address on 16th December, when he underscored the importance of fiscal responsibility to stabilise and grow the nation’s economy.

Among the initiatives announced to bring economic relief for citizens and residents are a six month reduction of the Value Added Tax (VAT) to 13% from 17%, effective January 2025; the Budget Boost Wallet (BBW), which will provide eligible citizens earning $5,000 or less per month with $250 per month for six months; and another increase in the minimum wage, commencing1st July 2025.

These join ongoing government initiatives, including utility subsidies, pension payment increases, workers’ bonuses, relief for utility arrears, and the introduction of a Government Auxiliary Employees’ pension.

These initiatives are part of the Labour Party administration’s broader strategy to correct years of financial mismanagement while paving the way for sustainable economic progress.

Dr. Drew reaffirmed the government’s commitment to placing citizens in a stronger position to prosper through targeted policies and investments. He stated that it is his government’s responsibility to ensure long-term benefits for all and emphasised that achieving fiscal sustainability will require a careful, disciplined approach to managing the country’s finances.

While the initiatives represent a significant shift towards economic sustainability, the absence of a “double salary” or Citizenship by Investment (CBI) dividend payment sparked disappointment in some quarters. The December Christmas bonus, traditionally anticipated by government workers, has never been issued in a year when salaries were increased—a practice consistent since the introduction of the bonus in the 1980s. Notably, the government implemented an 8 percent salary increase in January this year. Since taking office, the Drew administration has delivered both a December bonus and $500 CBI dividends to nationals on two separate occasions.

Prime Minister Drew defended the government’s decision against a 2024 bonuses, emphasising the need to prioritise long-term economic stability over short-term measures.

The government’s decision reflects its broader effort to address critical financial issues inherited from previous administrations. Dr. Drew highlighted that while dividends and bonuses provided immediate relief, they often undermined the fiscal stability of the nation.

In his address, the prime minister outlined key initiatives designed to:

• Invest in infrastructure, education, and key sectors to drive growth and create jobs.
• Manage public funds responsibly to avoid deficits and unsustainable expenditures.
• Encourage investments, diversify the economy, and implement programmes to empower citizens in the long term.

Prime Minister Drew concluded his budget address by imploring all citizens to embrace his administration’s vision of a stable economy that secures prosperity for future generations.