If the nine-month-old United Progressive Party (UPP) wins the next election, there will be no massive layoffs of public servants, no sale of loss making state owned entities such as the Transport Board or the Caribbean Broadcasting Corporation (CBC), but Barbadians can look forward to a significant reduction of their tax load.
The party, which was launched back in February, was the first out the blocks today with the first in a series of “mini manifestos”, ahead of the election, constitutionally due by the middle of next year.
While promising to reduce the tax burden on Barbadians over a five-year period, UPP Leader Lynette Eastmond acknowledged that the productive sectors must be given time to grow.
However, as part of its 17-page New Economy Manifesto, she announced that her party would revert to a 15 per cent Value Added Tax (VAT), down from the current level of 17.5 per cent, which applies to most sectors with the exception of tourism which enjoys a special 7.5 per cent output rate.
As part of a comprehensive review of the island’s taxation framework, the UPP is also promising to remove “creeping” tax exemptions, offered by previous governments.
“We believe that the taxation burden of Barbadians should be reduced and we will engage in renewed efforts to broaden the tax base by removing the creeping exemptions which various governments have put in place over time,” Eastmond said, while suggesting that in its quest to relieve industries such as tourism, Government had actually placed the tax burden on households, which she said were finding it harder to buy basic foods.
However, the current Basket of Goods introduced by the Freundel Stuart administration on September 1, 2015 and in which several food items were exempted from VAT, is to remain in place even though the UPP remains worried that the island’s national debt currently standing at 144 per cent of gross domestic product (GDP) and the its level of international reserves have fallen to $549.7 million or 8.6 weeks of import cover as at September, while its deficit stands at over $300 million.
Eastmond, flanked during this morning’s press launch at the Courtyard Marriott by St Philip South candidate Bruce Hennis, St Michael North candidate Maria Phillips and UPP Campaign Manager Ambrose Grosvenor, therefore is not ruling out the idea of taking the island down the road of the International Monetary Fund (IMF).
In fact, she said her party “will review all options for borrowing, including [going] to the IMF”, even as she strongly refuted the idea of a devaluation of the Barbadian dollar, presently pegged at two to one against the United States currency.
“The IMF is saying that they are not ruling out a devaluation because they must say that, but we are not ruling it in,” Eastmond said.
Overall, the UPP said its goal is to raise the living standards of Barbadians, who the party says are currently on average “poorer than the poorest people in the poorest state in the US”, with an annual income level of between $0 to $50, 000, when compared to Mississippi, which has a per capita GDP of $62,000.
The party is therefore seeking to achieve five per cent economic growth annually over the next five years and a per capita income of $110,000 over the next 25 years.
To do this, the UPP says much emphasis would be placed on the development of a “new creative economy” in which there would be commercialization of music, film, fine arts, craft, design and fashion by way of a technological driven platform over the next ten to 20 years, with potential earnings of US$1.5 billion annually.
“The creative industries is actually much larger than tourism, yet Barbados continues to simply focus on tourism. This needs to change,” Eastmond stressed, while describing the bread-and-butter tourism industry as “stale”.
With the international business sector also having taken a beating in recent years, Eastmond further suggested the time was ripe for the takeoff of the creative economy in which there is to be reduced dependence on fossil fuels and an estimated energy saving of $300 million.
“You have to see it as a sector that the Barbados government is willing to invest in the same way that it is willing to invest in tourism,” the UPP Leader said, while suggesting that a reformed CBC would have a vital role to play in the sector’s promotion and development.
At the same time, the UPP said it was willing to break the current monopoly held by the terrestrial state broadcaster by offering television licences to the private sector.
With respect to transportation, the UPP made it clear that it had “no intention of selling off all of the lucrative aspects of the transportation system in Barbados while leaving the Government and taxpayers with only the aspects requiring subsidization”.
With incessant calls for transparency and accountability in Government, Eastmond also said her government would approve a Freedom of Information Act and would deal frontally with the issue of corruption.
“Corruption is an expense to Government. Many people do not look at it that way but when the price of goods and services are higher because of nepotism, because of political connections or family connections, Government tends to have to pay more money and we can certainly cut expenditure if we seriously put an effort into eradicating corruption,” the UPP leader said, while promising to address the matter in detail in the party’s soon-to-be released Governance Manifesto.
The party is also promising to crackdown on Government bureaucracy and to introduce a new ticketing system for minor traffic offences where citizens can opt to pay a fine without attending court.