The party which secured the third highest number of votes in last month’s general election is throwing its support behind the bittersweet economic medicine prescribed today by Prime Minister Mia Mottley to drag the economy from the brink.
Even though Solutions Barbados (SB) said householders would be worse off because of the so-called mini Budget despite some sweeteners, the party’s leader Grenville Phillip II said the state of the economy left Mottley with little choice but to go the austerity route.
Phillips, who party received 4,188 votes or 2.72 per cent of the ballots cast in the May 24 poll, also spoke kind words about Mottley’s spending priority, saying it showed she “genuinely cared for the people of Barbados”, while he praised the BLP administration for spreading the pain equitably instead of heaping the burden on one subset of society.
“The Budget based on the priorities of spending shows that she does care for the people. She has spread the pain as widely as possible as she could. No doubt there is austerity and if she could convince the IMF [International Monetary Fund] that this is the extent of the austerity, she would have done well,” Phillips told Barbados TODAY.
The Prime Minister today announced a series of fiscal measures amounting to $1.2 billion in adjustment over three years, through which Barbadians will contribute to the upkeep of most social services, including health care, garbage collection and transportation.
These included the introduction of a Health Service Contribution at a rate of 2.5 per cent, 1.5 per cent of which will be paid by employers and one per cent by employees.
The tourism sector has also been hit by a number of taxes, including departure fees of US$70 for passengers flying outside of the Caribbean Community (CARICOM) and US$35 for those flying within CARICOM, and various taxes on the accommodation sector.
But Mottley also kept campaign promises to raise the minimum non-contributory pension from $155 to $225 per week beginning July 1, give public servants a pay rise of five per cent for the period April 1, 2018 to March 31, 2019, as well as reverse the decision in 2013 by the then Democratic Labour Party administration to impose tuition fees on students pursuing undergraduate studies at the University of the West Indies.
His support notwithstanding, Phillips said the entire package was nothing more than giving with one hand and taking even more with the next.
“I don’t think households will be better off after this because even though public workers may have gotten a five per cent increase, when you add up the different fees and taxes that they have to pay, that increase is gone. So it is likely that they would be worse off after this. When you are finished crunching the numbers you might see that it is a five per cent reduction,” he said.
Mottley also announced plans to abolish the road tax and replace it with a levy of 40 cents per litre on gasoline and diesel and five cents of kerosene.