We normally associate the words “July, standby” with the hurricane season and we pray this year will be a quiet one. However, I’m referring to the measures passed in the mini Budget last month since many of them will come into effect from July 1.
I remember the late Prime Minister Tom Adams telling the country just before one of his cost-cutting budgets to tighten our belts. That may have been the one that someone ran off with before he had the chance to present it. I can still picture him shouting: “Bring back the Budget!” to the culprit.
While we may wish that someone had run off with this Budget too, we recognize that because we allowed the last Government to destroy the economy, we now have to take some bitter medicine. It was very adequately depicted in a creative meme on Facebook. There was a cough medicine bottle resembling the Buckley’s one which said: “IMF Original Mixture, for fast relief of Wastage, Mismanagement, and Malfeasance. Auntie Mia’s Economic Medicine – It tastes awful. And it works.” So although no one likes to take bitter medicine willingly, we have no choice if we want to see our country turned around.
However, one thing that upset me about the Budget was the elimination of road tax. Not the idea itself, but the timing. I paid road tax of $1,600 in May for my son’s truck, so you understand my pain. But I don’t have a problem with it in theory because while the fuel tax will be added to the gas and diesel costs, we can control how much we pay by deciding how much to drive if gas becomes too expensive.
We now have to “standby” to see what the real impact of these new measures will be on our pockets. We know they will be painful, but we won’t know the amount of pain until we swallow the medicine. Then we must wait patiently to see if it works and if it was all worthwhile. While I totally agree with spreading the burden, I don’t fully agree with all the measures used to do so.
For example, my ironing lady complained about the addition to the water bill and I can truly feel her pain. Her bill is about $30 to $40 a month and she will have to pay up to an additional $45 a month ($1.50 per day). I don’t see how that measure reflects care for the vulnerable among us. I believe that the water bill levy (or whatever it is called) should be tiered according to water usage, so that someone at her level of usage would pay about $10, while those with bills in the hundreds would pay a greater amount. That measure starts on August 1 so there’s still another month before we get the full dose.
The NSRL removal from July 1 is a good measure, but again we have to standby to see if the supermarkets and other merchants will actually reduce their prices. We will probably have to wait until new stock (without the NSRL) comes in to see if prices are adjusted to reflect that.
I am amazed at how much prices have exploded, not just increased. For example, this week I saw a box of Swiss Chocolate that I am sure I used to buy for $15.99 about two years ago. It now costs $21.99! That is more than NSRL, that is highway robbery! Will the supermarkets return the price to $15.99 when people have gotten into the habit of buying it for $21.99? We will “standby” to see.
Thank goodness we have until October 1 before the new departure tax kicks in. This will probably keep more people at home taking staycations instead of travelling. That is if staycations will even be in the budget since the new income tax bands will ensure that workers have less take-home pay. Whereas you can find a reasonable flight to Fort Lauderdale right now for US$483 (I just did a quick check in case you want to make a trip in July), you would have to add another US$70 to that. But while we are reeling at that, we probably don’t realize that the base fare is only $330, the US charges $68 and VAT is another $58. Of course, that will not stop everyone from travelling, so the measure should provide good revenue to the Government. They are estimating $95 million.
There is more medicine coming later in the year to brace for, but I would have liked to see some investment stimulating measures. After all, while increased taxation may produce revenue for the Government, it can also hinder economic activity because of reduced consumer spending (as evidenced by the NSRL). Therefore, we need foreign investment and incentives to stimulate and grow the economy. I’m not talking about concessions such as those generously given out by the last regime, but incentives that all businesses can benefit from if they meet the requirements.
We all desperately want to see our country turned around, so let us take the medicine without too much complaining and let’s pray that it works.
Donna Every is an author, international speaker and trainer. She was the Barbados Ambassador for Women’s Entrepreneurship Day (2014-2016) and is the Barbados Facilitator for the WINC Acceleration Program.
Contact her at email@example.com