Prime Minister Freundel Stuart yesterday gave a strong hint that the Barbados National Terminal Company Limited (BNTCL), for which an agreement has been reached with
the Sol Group for its sale, will not be the last state enterprise of which Government will rid itself.
Concerned about his administration’s high expenditure bill, Stuart said cuts were coming in transfers to state-owned entities, which could include possible mergers or closing some of them down altogether.
“As you can appreciate, we are constrained at this time in relation to debt service expenditure, and for that matter, wages and salaries. We are therefore continuing to examine transfers to state-owned entities along with strategies that will strengthen management capabilities to provide effective and efficient performance,” Stuart told the Barbados Chamber of Commerce and Industry luncheon at the Hilton Barbados Resort.
“Discussions are continuing on the elimination or merger of some of these entities. It is clear that more can be done if the resources allocated to these enterprises are to be better managed. We will therefore continue to aim at the reduction of the level of transfers required annually from the Government.”
He added that privatization of some state entities was not off the table, but it would have to be done carefully.
Stating that his Government remained concerned about the expenditure column of its balance sheet, Stuart said three important areas of Government expenditure were identified that needed to be addressed – debt service, wages and salaries and transfers to state-owned and other entities.
These, he said, represented approximately 80 per cent of total expenditure on an annual basis.
Just last Tuesday, Minister of Finance Chris Sinckler told parliamentarians Government was facing a challenge to cut statutory transfers.
Explaining that pensions were categorized as transfers, the minister said this was “one of the fastest growing line items in the Government expenditure budget other than interest rates payment, or debt service payment”, increasing by $30 million in the 2015/2016 financial year, and expected to rise even further in 2016/17.
“We can’t cut pensions, we can’t cut statutorily agreed, and by law, enshrined gratuities, because it is what people are entitled to,” he emphasized.
Stuart yesterday made reference to a promised by Sinckler in his 2015 Financial Statement And Budgetary Proposals for a mid-term financial year review to examine current spending patterns of all ministries and statutory boards based on the 2016-2017 allocations.
“That exercise was completed in mid-December last year and I am advised that in keeping with the promised reductions the Ministry of Finance has been able to identify $50 million in cuts across all ministries,” he revealed.
The Democratic Labour Party leader added that preparatory work on the 2017-2018 budget would begin soon and attention would be paid to reducing the deficit.