The pain Barbadians will suffer from government’s new $436 million fiscal adjustment strategy will only be worth it if it maintain’s fiscal discipline beyond the duration of the austerity measures.
That’s the message the Institute of Chartered Accountants of Barbados has for the Freundel Stuart Admistration, and it is also urging government to ensure red tape and inertia does not affect implementation of important measures, including the $1.8 billion package of investment projects “ which are targeted at stimulating economic growth”.
ICAB expressed these views in its official response to the last Tuesday’s Financial Statement and Budgetary Proposals, and it also asked government to say how a resolution to the CLICO problem would factor into its fiscal adjustment.
The organisation said while the fiscal measures outlined by Minister of Finance “may not be desirable” and “are in fact painful”, they “are indeed essential if the country is to have any hope of recovery”.
“The Institute of Chartered Accountants of Barbados has consistently expressed its preference for cuts in Government expenditure rather than increases in taxation given the existing high level of taxation in Barbados,” ICAB said.
“However, given the gravity of the economic circumstances and the urgency of the need for measures to restore confidence in the exchange rate and restore fiscal discipline, the fiscal adjustment measures deserve the support of all Barbadians during the adjustment period.
“We caution however that the pain of the adjustment will only be worth it if Government maintains fiscal discipline beyond the crisis period by ensuring that its expenditure level does not again become unsustainable.”
Beyond asking government to ensure its own financial discipline was sustained in the long term, ICAB also emphasised the need to overcome the challenge of implementation”.
While supporting the establishment of a Specialised Major Project Coordination Team, it said: “This team must be given all necessary resources and authority to cut through red tape and overcome inertia to get the job done. In addition to ongoing monitoring and reporting to Cabinet the team must be mandated to report to the public monthly on the progress of the projects”. (SC)