Government Senator Darcy Boyce has defended the country’s current fiscal position, saying Government was forced to face several severe challenges since assuming office eight years ago.
Boyce told the Upper House today during debate on the Estimates of Revenue and Expenditure that Government had performed creditably, despite not operating on a level playing field.
“We have made good progress in our fiscal position. We are not quite where we want to be, but we have made good progress,” Boyce said, noting that some consideration should be given to “the major events over the last eight years that have occasioned us considerable fiscal distress”.
He pointed to changes to the Canadian tax system, to which the Freundel Stuart administration had to adjust in order to keep Canadian companies in Barbados.
“And we made that decision intending to keep the jobs that we had in that sector here in Barbados, intending to keep those somewhere between 3,000 and 4,000 persons employed in that sector, and to continue to earn the most of the income that we earned from that sector.
“The last figures I saw put that income at $900 million, that is close to ten per cent of the GDP [Gross Domestic Product]. So the effect of that Madam President, was that we have lost essentially . . . close to $200 million a year . . . It meant that every year thereafter our tax take was somewhere between 150 and 200 million dollars below where it would ordinarily have been,” Boyce said.
He noted that Government tried to recoup some of the losses through taxation and cutting expenditure in some areas, “but there’s a limit to how far we can go on either of those”.
Boyce also listed economic conditions in Barbados’ main tourism markets; the fall of the British currency against the US dollar and the blacklisting of Barbados and other Caribbean countries as tax havens by some European countries as challenges that impacted on the administration’s programmes.
“We are not playing on an easy wicket, we have not played on a good wicket for the last eight years, and the wicket is not getting much easier. We have to continue to play very carefully,” he warned.
Boyce also hit out at critics of Government’s economic policies, complaining that the administration faced criticisms no matter what it attempted to do.
“Whenever the Government tries to raise a little revenue . . . there is a hue and cry from the very people who say to us we should cut the fiscal deficit . . . . If we say we’re going to lay off some people . . . there’s a hue and cry from the people who tell us there are too many people working in Government and the wages are very high.
“So you have to go with a very delicate balance in terms of how you cut this fiscal deficit,” he said.