Up to half of the approximately 3,000 workers in the privately-run public service vehicle (PSV) sector could lose their jobs if Government insists on maintaining its announced petrol tax on the sector, PSV executives contend.
Following a meeting this afternoon with Minister of Transport, Works and Maintenance Dr William Duguid at the minister’s Pine, St Michael office, the top brass of the Alliance Owners of Public Transport (AOPT) and the Association of Public Transport Operators (APTO) insisted that the 40 cents per litre fuel tax would yield catastrophic results for their business.
“Between 40 and 50 per cent of the industry could find itself displaced in the event that that decision [fuel tax] had to take its course. But we are making every effort to avoid that at all costs. But . . . the reality is that the fuel tax will increase the road tax,” Morris Lee, the interim chairman of APTO, told Barbados TODAY.
In her so-called mini Budget delivered in the House of Assembly last week, Prime Minister and Minister of Finance Mia Mottley confirmed that her Barbados Labour Party (BLP) administration would abolish the road tax from July 1, 2018 and replace it with a fuel tax to be levied at the rate of 40 cents per litre of petrol and diesel and five cents on kerosene. The annual registration fee for commercial vehicles is also being reduced by 50 per cent.
Lee told Barbados TODAY that while today’s meeting with Dr Duguid was a good one in which the minister showed an appreciation for the potential dire effects of the fuel tax on the public transport sector system, there was still a need for an urgent and more substantial discussion with the Minister of Finance, and even Minister of Energy Wilfred Abrahams, to resolve their concerns without further delay.
“You have a fellow that paying right now $450 a day in diesel for the minibus, he is going to save $1,500 in road tax, but then he is going to pay out $12,000 more in fuel. So technically, his road tax is going from $3,600 to $12,000 . . . meaning that the true impact on a minibus, the road tax will increase by 400 per cent,” the PSV spokesman said.
He said of great concern to the private transport concessionaires was that unlike other businesses, they could not pass on the increase to passengers because bus fares are legislated.
Lee told Barbados TODAY he was in the process of compiling a costing plan to present to Mottley, designed to cushion the blow which the fuel tax poses, and if approved, it should minimize any layoffs.
“I am looking to discuss some other means that could cushion the impact of this with the Minister of Finance, and once she thinks it out quickly and carefully, I believe the matter can be resolved to minimize any job losses. But it would call for serious consideration to examine other cost-saving aspects for the business. What I will say to you is that I am in the process of trying to get an emergency meeting with the Minister of Finance because this is a national issue,” he said.
The private transport executives, who had been pressing the previous Government for duty-free concessions, had also written on June 14 last year to then Minister of Finance Chris Sinckler requesting that fares be increased to $3.
“Technically, if our road tax end up increasing by 400 per cent . . ..400 per cent of $2.00 is $8.00, right? That is why the IMF said that bus fares should be increased to $5.00. So, the traditional business that has the flexibility to pass on the increase to the consumer would be looking at a 300 per cent increase in bus fares. All we had asked for from the last administration was $1.00, and that was before the fuel tax came up,” Lee said.
Meantime, AOPT Public Relations Officer Mark Haynes was happy with Dr Duguid’s response, although he said the meeting was inconclusive because the minister had to rush off to another meeting with the Prime Minister.
“The meeting was relatively short due to the fact that the minister had to attend to another meeting . . . .We were not able to deal with all the things on the table, but thus far he seems promising and he seems intent on taking on the sector seriously with a view to making everybody a little happier,” Haynes told Barbados TODAY, adding that Dr Duguid planned to meet them again shortly to address the sector’s outstanding matters.