The Barbados Private Sector Association (BPSA) is “alarmed” at ongoing debate over whether Barbadians should be prepared to pay additional taxes or fees to fund the cost of education and health care.
BPSA President Alex McDonald described any such move as “knee jerk” and warned that it would be the easy way out. He insisted it was not the solution Barbadians or the private sector could afford to bear, given the fact that they were already footing the bill for the two services.
“The private sector has always had a view that the level of taxation in our community is very high and I think we have accepted that there is a trade-off –– for certain social services we would accept a high level of taxation. We know that our taxation is already paying for those services,” he said, adding:
“We think that these problems are endemic and deep. The easy way is to tack on fees but if we don’t deal with the root and stem issues, then those fees will only go up and up and up and we will get comfortable with the inefficiencies that we have. I don’t think the private sector who will bear the brunt of the call, is in a position just at the point where we could start to see a turnaround, to bear an increased burden.”
McDonald, who has been paying rapt attention to the funding debate which has dominated presentations in the 2015/2016 Estimates of Revenue and Expenditure, currently before the Senate, said the trade-off should be efficiency over a rise in taxes and fees.
The private sector spokesman argued that critical dialogue was missing from the debate and called for the social partnership to be engaged on the way forward.
“I am not persuaded there necessarily needs to be a charge; I am not persuaded that there doesn’t need to be a charge, but what I am persuaded is that there needs to be dialogue,” he said.
He added: “For instance, we are not hearing on the other hand that if we do introduce fees that we will reduce corporation tax and income tax, or if we decide we are going to have a low tax regime, we are going to pay for everything, or we are going to have a high tax regime and we pay for nothing or we have a moderate tax regime and we choose what we pay for. Those are philosophical decisions we need to get into to see how our funds are spent.
The private sector head also expressed concern about calls for more fund raising. He revealed that while the BPSA is about to commission a study on the level of corporate giving, he suggested it was high with businesses already lending strong support to charities, individuals, schools and other special areas.
“When we talk about fundraising, therefore, in an economy where there are high levels of taxation or new taxes being put on recently, the only question we have is where will this money come from? Our concern is, if you are going to be building a model based on volunteerism, we think it is going to need much more communication on how that is going to actually work. For instance, will it be implied that there be lower levels of taxation and higher levels of corporate giving at the discretion of companies? It is for that reason that we are concerned about where the debate is heading.”
Insisting that he was not bashing the Government, McDonald endorsed calls from Ministry of Industry, Donville Inniss, for a root and stem review of the costs at the University of the West Indies but suggested that it should be extended to the wider education system.
“We need to examine where are the inefficiencies, where are there efficiencies to be gained, where are we replicating things, where are we wasting, do we have the right people, processes and tools in place to manage the education system? Do we have the right plan? I know that those actions have been ongoing and I think now is the time to think about fast tracking those decisions, based on forecasted models before we start talking about payment for that. I think it is a knee-jerk reaction to a problem that needs to be clearly thought out.”
Similarly on health care costs, McDonald agreed with Senator Professor Sir Henry Fraser, who during debate in the Upper Chamber yesterday, said the problems at the Queen Elizabeth Hospital would be better addressed if emphasis was placed on money, management and morale among other things.
McDonald added that while some quarters were suggesting that those who were well off economically should pay a larger share of the burden, it could not be decided in a vacuum.
“We also have to remember that those people who have private insurance also pay taxes which also go towards the monies that are allocated to the Ministry of Health, so we have to have a very philosophical dialogue among our stakeholders about what we are being taxed for? Where is that money being spent? If you are asking for higher levels, what are the inefficiencies that will be guaranteed to make sure that our hard earned money is being spent in the right way?
Despite his reservations about additional payments, McDonald was however skeptical about statements coming from the Opposition Barbados Labour Party that it would scrap the introduction of tuition fees and fund the full cost of education if it returns to office.
“What is the issue? What are we giving back towards? What are the brackets? Is it that you are saying that matriculation levels at the UWI are too low so we are letting too many people in, so we are only going to encourage people who have three “A” level first passes or you have to commit to hold a GPA of certain levels and we are only going to be paying for that in three years unless there are extenuating circumstances.
“So to say that you are going to give back an education is not enough. Tell us what the parameters are. Equally, to say that you are going to make everybody pay fees, is not enough, there must be parameters.”
The private sector official underscored the need for dialogue that is focused and results driven, suggesting that society was ready for the conversation on how the public purse should be spent on education, health care and other key areas,
“We are hearing competing voices across the society –– some that are well informed, some are ill-formed. What we are saying is that some people are speaking from a feeling factor –– what they feel should happen. Let the science guide us to where we need to go and all of that has to be underpinned by a philosophy. What is our development philosophy? Do we spend the money on education? Do we spend the money in health? Do we spend the money in building and infrastructure? And when we choose what to spend, how much of it?” McDonald asked.