The dreaded ‘d’ word – devaluation – was floated again tonight as Minister of Finance Chris Sinckler’s 2017 Financial Statement and Budgetary Proposals came under immediate scrutiny from economists, Opposition politicians and a consumer rights advocate.
Noted economist Jeremy Stephen said the decision to raise the National Social Responsibility Levy to ten per cent from two per cent when it was introduced last year, and the introduction of a two per cent tax on foreign exchange transactions were akin to devaluing the Barbados dollar.
Still Stephen was pleased with the proposal to cut Government expenditure by ten per cent and plans to divest the Barbados Hilton Resort, in a sale estimated to rake in $100 million.
The economist’s suggestion of devaluation was shared by Chairman of the Tax Committee of the Institute of Chartered Accountants of Barbados (ICAB) Wayne Lovell, who also saw the tax measures as a form of devaluation, even as he commended Government for cutting expenditure in order to close the deficit.
However, some of the most stinging criticisms of the financial plan came from Opposition Barbados Labour Party (BLP) parliamentarian Kerrie Symmonds, who saw it as a means to retard the country.
“The concern that the Barbados Labour Party has is that over the last nine years the Government of Barbados raised $340 million in new taxes. This evening alone, this minister has indicated an intention of raising $480 million in new taxes. That is one and a half times more than the imposition inflicted on the people of Barbados, which we endured over the last nine years. So this Budget is guaranteed to have a contractionary and recessionary effect,” Symmonds said, adding that consumers were once again being beaten up.
The Opposition parliamentarian said Barbados was trapped in high debt and a stagnant economy because the minister preferred to tax the people rather than deal with the fundamental problem.
Like Symmonds, Director General of the Barbados Consumers Research Organization Inc Malcolm Gibbs-Taitt left no doubt how he felt about the Budget, saying it was clear Government had joined with the private sector in attacking “the little income” that Barbadians had.
“Through this Budget, the Government has taken from the poor and given to someone else,” the consumers’ spokesman said.
“If you keep taxing and taxing and taking and taking from people, how are people going to spend?” he asked.
However, the umbrella trade union body struck a more understanding tone, even as its leader and its largest public sector member expressed concern about the impact of rising prices on members.
President of the Congress of Trade Unions and Staff Associations of Barbados Cedric Murrell said he was pleased that the minister had not gone the route of large scale layoffs, a sentiment shared by Akanni McDowall, the President of the National Union of Public Workers.
Murrell said while it was important to keep people at work, increased taxes would make it difficult for them to get by.
“Clearly, the [ten per cent increase in the National Social Responsibility Levy] will mean that persons’ disposable income will be reduced, but one understands that the deficit has to be addressed and the Government has chosen to address the deficit more on the revenue side, than the expenditure side,” Murrell said.
While commending Government for pushing for a balanced budget, the CTUSAB leader had reservations about its success.
Meantime, McDowall expressed disappointment with the financial plan, despite Government’s pledge to protect jobs.
“The good [thing about the Budget] is that he [Sinckler] did not explicitly say that public servants would be laid off. And I think that the private sector has been calling for wages and salaries to be cut . . . and the minister has sort of defended the number of public servants that are currently employed by the Government.
“[However], public servants would be worse off tomorrow than they are today because what the minister would have effectively done, was to increase the taxes which public servants currently pay by increasing the National Social Responsibility Levy . . . and by also increasing the cost of gasoline and diesel,” the union leader pointed out.
McDowall said this gave the NUPW even more reason to push for pay rises for public servants.