Barbadians are generally pleased with the mini Budget presented today by Prime Minister and Minister of Finance Mia Mottley in which she announced an increase in old age pensions and a five per cent hike in public sector salaries and wages.
In making the announcements, Mottley said over the past ten years workers had borne the brunt of the economic challenges that beset the country.
“Consequently, we have reached an agreement for a five per cent, across-the-board increase in wages and salaries for the period April 1, 2018 to March 31, 2019. This will cost the Government approximately $60 million. It is the single biggest expenditure measure. It represents our commitment to labour and their unflinching commitment to working through the challenges our country faces together,” Mottley told Parliament.
In the case of the pensioners, the Prime Minister also announced that “as promised in our manifesto, we will raise the minimum non-contributory pension from $155 to $225 per week,” adding that “the relativities will be maintained for minimum contributory pensions and survivor benefits and invalidity benefits within NIS, [which] will treat to this expenditure separately”.
Mottley also announced a repeal of tuition fees for students attending the University of the West Indies.
However, as part of a $1.2 billion austerity package, she announced several new taxes.
In fact, while repealing the dreaded National Social Responsibility Levy (NSRL) and abolishing road tax, Mottley introduced a new fuel tax, which is to be levied at a rate of 40 cents per litre of petrol and diesel and five cents per litre on kerosene effective July 1, 2018.
Effective October 1, 2018 Government will also introduce a Health Service Contribution at a rate of 2.5 per cent, as well as a new Garbage and Sewage Contribution to be levied through Barbados Water Authority bills at $1.50 per household per day.
Effective October 1, all online transactions undertaken by Barbadian residents will also be subjected to Value Added Tax, while corporation tax will increase from 25 per cent to 30 per cent effective July 1.
Immediately following the presentation which started after 11 a.m., Barbados TODAY took to the streets to get the views of Barbadians, who gave the Budget two thumbs up.
In fact, Robert Alkins said he was in full support of the package, which he described as “Christmas in June”.
“The private sector doesn’t have a problem with it. Give it some time and it will work. Don’t worry about the IMF [the International Monetary Fund], they, the BLP, are doing their best to repair the damage [caused to the domestic economy],” Atkins said, while expressing full confidence in Mottley’s leadership.
He stressed that her two-week-old Government inherited an economy that was in a bad position and in need of urgent repair. Therefore, he said, he was not opposed to new taxes and levies announced by the Prime Minister.
“Some measures needed to be put in place. I had to tell some people don’t put the public in a panic because the DLP [the ousted Democratic Labour Party administration] didn’t do any better and the Government is doing its best to get Barbados back on top,” he said, insisting that while it would all seem hard at first, “as it rolls through we would see the benefits”.
A woman who gave her name only as Marlene, said she had only heard part of the Prime Minister’s speech. However, she was happy that many of the promises made on the campaign trail were being fulfiled, including the reinstatement of free tertiary education for Barbadian students attending the University of the West Indies.
“I think that it is a good thing to get free education to help the youth to be educated and not just be educated, but to be sensible as well,” she told Barbados TODAY.
Another woman, who did not want to be identified, was also happy about the repeal of tuition fees at the University of the West Indies (UWI).
She said it had taken a major burden off her shoulder because while she was struggling to find work, her children would be able to attend UWI in the coming academic year.
“I am very happy because my children just left [the Barbados] Community College and . . . they would have had to go and look for work, but now they will be able to go to UWI,” she said.
She was supported by a male, who also did not want to be identified, but said “Barbadians will benefit, especially those who don’t do much driving, from the cut in the road tax, but those who do the most driving will obviously pay more” with the introduction of a fuel tax.
He also argued that the taxes announced by Mottley were necessary to balance Government’s budget.
“If you are going to be removing NSRL, then you have to raise revenue and you would have to recover it somehow and in some form. This Budget has the potential restore confidence in the economy,” he added.