It is fair to say that the response of key economic stakeholders and Barbadians in general to the latest Budgetary Statement and Financial Proposals presented a week ago by Minister of Finance and Economic Affairs Chris Sinckler has been overwhelmingly negative.
For certain, the new revenue measures, described by Opposition Leader Mia Mottley as representing the biggest tax grab in Barbadian history, will make everyday living and doing business much harder for the average resident and enterprise.
Take the case of the sharp increase in the National Social Responsibility Levy (NSRL) from two to ten per cent which takes effect from the beginning of next month. Eating is indispensable to living but, with food prices already high, this new measure is sure to cause them to shoot further through the supermarket roof.
Given the national concern about the high incidence of chronic non-communicable diseases and the rising cost burden on the health care system, it would have been a prudent move by Government to identify a basket of healthy foods that would be exempted from the NSRL increase. The idea would be to keep those prices within reach of the average consumer.
But that no consideration was given to such, means that with the reduced disposable income that will be available, the temptation of low-income earners in particular, when doing grocery shopping, would be to seek out those items which do not cost much and which are invariably low in nutritional value but provide the emotional satisfaction of a full oesophagus.
It is also expected that more persons will join a growing number of Barbadians, especially senior citizens on limited incomes, who are forced almost daily to leave various essential food items at the cash register because their dollar today is not stretching as far as before.
Sometimes, chicken, and other forms of protein and vegetables are among items that simply have to be put back, unless a Good Samaritan is next in the queue and offers to pay the difference for the consumer who simply cannot bear the rising costs.
As we reflect on last week’s presentation, we therefore cannot help but feel that another opportunity has been missed for our Government to engage in effective stakeholder engagement as a means of minimizing the negative impact on all sectors.
It also would have negated the need for Prime Minister Freundel Stuart to make the promise he made in response to queries from manufacturers at BMEX over the weekend to revisit the tax measure that which will no doubt have a deleterious effect on many a small business.
But as we have said many times over, communication continues to be the Achilles heel of this Government, which is somehow not learning from past mistakes in terms of its public discourse.
Another issue thrown up by the Budget is the two per cent commission on foreign currency transactions aimed at dampening demand for hard currency for spending abroad. The question is, how will this impact overall consumption and will an exception be made for Barbadians students attending colleges and universities overseas whose parents have to be send them money on a regular basis for maintenance, which includes expenses like rental of accommodation?
The use of foreign exchange in this case is not for consumption but for personal and professional development. The experience can equip students with high value skills to come back and contribute to Barbados’ development which will be beneficial to our country. If this issue is not addressed, a new form of hardship will be visited upon these students and parents may be forced to find an alternative source of foreign exchange.
With many questions still answered in relation to the Budget, it is debatable whether Government’s fiscal objectives can be realistically achieved. Success in this instance cannot be achieved singlehandedly by Government but requires, more critically, the support and cooperation of stakeholders and the citizenry.
Without such, the package of measures represent a hard sell that is more likely to encounter resistance than cooperation from the business sector in particular, which plays a critical role in the generation of higher economic growth which Barbados desperately needs.