The first signs of a split within the Freundel Stuart administration over the 2017 Financial Statement and Budgetary Proposals emerged today with two members of Stuart’s Cabinet leading separate but equally caustic attacks on the financial plan.
Minister of Commerce and International Business Donville Inniss refused to give the package of taxes his full backing, while Minister of Water Resource Management Dr David Estwick all but rubbished the package, while returning to his pet subject of debt restructuring.
In a fiery speech, Estwick made it clear that Barbados would not emerge from the crippling economic crisis, “on a taxation and expenditure consolidation alone” when it was riddled with high debt.
He said while Government had recorded some progress in its efforts to consolidate spending with a reduction in transfers and subsidies, this achievement was being undermined by the high debt.
“The problem is that while you had those reductions, your debt service went from 48 per cent to 62.6 per cent, so therefore any improvement you are getting on your consolidation exercise in regard to those measures are being undermined by your growth in your debt service, short term debt and medium to long term debt, that is a fact of life,” he said.
Estwick urged his Cabinet colleagues to undertake a serious review of measures and advised that the focus must be on debt restructuring.
“We have some options to make some adjustments after July; I am saying I think those options should be considered and we should more aggressively move Madame Deputy Speaker to refinance and restructure a significant portion of the debt of the country.”
The frank-talking Estwick said he was prepared to “stand up” to represent the People of St Philip West, warning:“I ain’t born with nobody, I will die with myself.”
For all of Estwick’s fire, it was Inniss who was more direct in his condemnation of the fiscal measures presented by Minister of Finance Chris Sinckler on Tuesday, saying he had a number of concerns over the package and he felt obliged to air those concerns.
“Now I stand here, yes, as a Cabinet minister, someone sitting on the front bench, but of great importance I also stand here as the parliamentary representative for the constituency of St James South, and I draw my strength from that particular constituency. And there are times when I will have to speak in Parliament without fear or favour as the parliamentary representative for the constituency of St James South,” he warned.
In a take-no-prisoners presentation, Inniss knocked the lack of consultation ahead of Tuesday’s presentation, saying it ran the risk of reflecting a narrow view.
“If the process of consultation is not deep and wide enough, then we are prone to make mistakes. The views of all will not be considered. And I’ve served as a Cabinet minister for nine years and I have raised concerns over and over again at the process. Because at the end of the day, if you’re not careful, what is presented is really from the perspective of one minister or one ministry,” Inniss stated.
In a further sign of cracks within the governing Democratic Labour Party (DLP), Inniss complained of a growing divide between decisions made in Parliament and the interpretation of those decisions, particularly in the public sector.
He also groused about the concentration of Government administration matters within the Ministry of Finance, saying it was beginning to “cause ruction in this country”.
“Every ministry, every minister must feel that we all have a role to play in the sustainable growth and development of the Barbados economy, getting it on the right track, staying on the right track, and of course building a more resilient society for us,” Inniss said.
He called for the international business sector to be exempted from paying the two per cent commission on the foreign exchange transactions due to take effect on July 1, insisting that it was “the one that is earning foreign exchange for Barbados, and therefore cannot and will not be penalized”.
The minister also said the hike in the National Social Responsibility Levy (NSRL) from two per cent to ten per cent would result in a rise in the cost of living, and he echoed the call from Opposition Leader Mia Mottley in her reply yesterday, for provisions to be made to assist vulnerable citizens.
“All I ask is that we ensure that the most vulnerable in our society are not placed in any more of a disadvantageous or uncomfortable position,” Inniss said, while also pointing to concerns raised by the manufacturing sector over the increase in the NRSL.
“When they sell to other manufacturers the National Social Responsibility Levy is not applicable as far as I understand. But when the manufactured goods are sold to the retailers, the National Social Responsibility Levy is applicable, and therefore that leads to an increase in the cost of goods manufactured in Barbados. But it also places us in a position to be less competitive on the local market.”
Inniss said the increase in the excise tax on petrol would drive up the cost of doing business and the cost of living, even as he stressed that the country had been under “immense pressure” in recent years.
He called for a “serious conversation and action plan” to improve efficiency and cut the cost of the public sector, stating that a number of state agencies had got out of hand and had “to be reined in”.
“Let us get real. Some of those agencies need to be merged or closed down. And that is perhaps one of the realities that we don’t want to face,” Inniss stated.
Sinckler had stated on Tuesday that his presentation was “a national call to arms” for all Barbadians to join Government in defining the future of the country.
But Inniss said he could not fully support the measures in full, as “there are some things there that trouble my soul and I’m not going to run away from that at all.
“It was never a perfect Budget, and it would be remiss of me to stand here and say that I give it my 100 per cent support when I don’t, when there are things in it that are of concern.
“And I could only hope, Madame Deputy Speaker, that we stay focused, that we recognize that we must be open minded, listen to others who may have a different perspective, and I’m sure that Barbados will be on the right track,” the minister said.