Politics
Barbados opposition leader, Mia Mottley, says more hardship ahead as new taxes announced
Barbados Opposition Leader Mia Mottley
The Barbados government says it intends to sell off some assets as it moves to reduce the fiscal deficit by March next year. Finance Minister Chris Sinckler presenting the Appropriations Bill in the House of Assembly on Monday announced a raft of new tax measures, including an increase in gasoline prices and the sale of the Barbados National Terminal Limited to help ease the financial burden facing the Freundel Stuart government.
In an immediate response, Opposition Leader Mia Mottley warned Barbadians they can expect more taxes to be imposed during the coming fiscal year as a result of the revenue-raising measures announced by the Finance Minister. She described the new revenue-generating measures as an ambush, adding that the proposed new energy taxes comprising the removal of the subsidies on diesel and a BDS$0.20 cents (One Barbados dollar = US$0.50 cents) increase in excise taxes on gasoline from April 1, will in reality also affect households.
Sinckler told legislators that in the period 2005-6, subsidies and transfers were estimated at BDS$782.1 million increasing to as much as BDS$1.137 billion by 2007-8. He said the figure increased by another one billion during the 2009-10 period.
He went on to add, “This shows that . . . expenditure has been growing, whilst the revenue has been shrinking. These things began from around 2005 to show up structural problems in the government finances. It is popular for the other sides and others to give the impression that it was due to government’s fiscal indiscipline and all of these things to give the impression that this entire story can be told from the beginning of January 2008.”
Sinckler said that the situation does not “square with the facts” and “if we are to correct these issues, we have to be honest and fair up front, recognize that government is a continuum. History did not begin in 2008, but a build-up of challenges over many years”. He said a study was done by a Governor of the Central Bank spoke about the need for government reform.
Furthermore, he pointed out, “He made the point that government was too big and that 36 cents of every dollar was going to pay wages and salaries and that you had to do something because if you did not address the issue along with other issues Barbados has within the economy, structurally it will come back to haunt us.”
“The main point that I am saying is that he recognized then, as did many other people, that we had some fundamental structural issues to address. But at that time we were basking in the glory of the great expansion, money was flowing, drinks were being bought, all was well and we believed that we could postpone dealing with these fundamental issues,” Sinckler added.
