Opposition Leader Owen Arthur believes that Barbados faces a calamity with its public finances.
Arthur voiced this concern on Saturday afternoon while speaking at the First People’s Forum on “Privatisation: The Barbados Model” at Springer Memorial School.
Arthur warned that the Government of Barbados was not paying and cannot pay its bills. In addition, he warned that Government was not meeting many of its obligations to its citizens and enterprises.
The former Prime Minister said: “This is so despite the fact that it has already made significant cuts in the allocation of expenditure to the social sectors which have been both the foundations and pillars of our development.
“Indeed, the Drug Service, the Queen Elizabeth Hospital and the University of the West Indies have already had to operate with substantially reduced allocations.”
Arthur charged that the fiscal crisis was also creating havoc in the wider economy.
“In this regard Government has been unable to meet the needs of the BTA at a time when the performance of our tourism industry is plunging, but when we also need tourism to over perform. The breaking point is in sight,” Arthur said.
Arthur argued that transfers and subsidies to state enterprises accounted now for such a significant proportion of the financial resources available to the state that maintaining them in their existing form and structure was proving to be a major challenge.
He said that in addition to the recent cuts that have already been made to public expenditure, more were planned by the DLP administration.
Arthur argued that since the Government could not pay its current bills, and planned to cut its expenditures on vital social and economic activities in the immediate future, a regime should be created whereby the private sector and our citizens should be provided with the incentives to fill the economic and social space, which the retreat of the Government would leave empty.
He suggested that a regime of Fiscal Incentives for Social Transformation should be put in place which would include tax incentives to allow citizens and the private sector to successfully take on more responsibility for the activities that the state has largely been involved in.
Arthur said: “Its implementation will ensure that the vital things that are necessary to support our nation’s development that hitherto have been done by the state, are increasingly done by citizens, the private sector and the institutions of civil society.” (NC)