President of the Barbados Chamber of Commerce and Industry (BCCI) Eddy Abed has been explaining why the Chamber did not throw its support behind the July 24 march by trade unions and other private sector representatives against the National Social Responsibility Levy (NSRL).
Writing in this month’s Chamber Biz newsletter, Abed said while the Chamber believed the tax was “regressive”, its council was “unanimously” of the view that “a march should be an action considered when all other options had been exhausted.
“Moreover, there were others that believed that the cost of doing business is already high and we should not consider ‘shutting down’ our operations for any length of time,” the Chamber president further explained, and while not going as far as to suggest that the march did not achieve the desired objective, the businessman said “the greatest of our concerns, which sadly seems to be resonating now, is what happens after the march and dialogue with Government?”
However, he acknowledged that the march, which was led by the islands four major trade unions and the Barbados Private Sector Association and attracted an estimated 20,000 people, did lead to Government bringing forward the meeting of the full Social Partnership by one week.
Abed also noted that coming out of the August 11 meeting with Government, three workings groups were established on Fiscal Deficit, Growth, and Sustainability and Social Responsibility, that were mandated to investigate and advise on improvements to state owned enterprises, reforms, better tax administration, business facilitation, fast tracking new projects among other areas.
The Chamber president also said he was confident that recommendations from those groups would “primarily deal with stabilizing the fiscal deficit over two to three years.
“Beyond that, we will need to ensure that there are positive movements in our sovereign credit rating so as to access funds internationally at lower rates; our ease of doing business needs to be markedly improved; our public sector being reformed to meet the needs of our nation in the 21st century and that robust growth returns to our economy fuelled by an increase in national confidence and an incentivized work force,” he said, while warning that the local economy “may be the greatest loser” from the recent tax impositions announced by Minister of Finance Chris Sinckler in his May 30 Budget presentation.
Highlighting the increase in the “extremely controversial” NSRL from two to ten per cent effective July 1 this year, as well as the two per cent fee on foreign exchange transactions, Abed maintained that as a result more poor people in Barbados would suffer.
“We believe this tax to be regressive as it will impact the poor in our society, who have a much smaller percentage of their pay pack allocated to disposable income and who will most certainly suffer more, as the basic cost of their weekly shopping rises,” the businessman said.
“Coupled with the foreign exchange fee, which had staggered starting dates of July 17 and September 1, businesses will have to become more creative and even less profitable as they struggle to keep market share and relevance to their customer base,” he added, while lamenting that “our fragile national economy may be the greatest loser, as economists predict that growth is very unlikely in the short-term and we may well slip into another recession”.
Last month the passage of Tropical Storm Harvey also resulted in a national shutdown, which contributed to “nothing short of [an] eventful” summer.
However, the businessman said the national shutdown policy should be revisited to allow ample time for everyone to get groceries and items from hardware stores if necessary and then to make their way home and prepare.
“I believe that we cannot approach bad weather preparations with ‘a one size fits all’ policy,” he said, pointing out that any plan should also take into consideration schools and day care nurseries.