Government’s new water tax which takes effect on Wednesday, August 1 has been described as “even worse” than the highly criticized National Social Responsibility Levy (NSRL) imposed by the then Democratic Labour Party (DLP) in 2016 before it was controversially raised from two per cent to ten per cent last year.
Speaking in the Senate today on the Barbados Water Authority (Amendment) Bill, the plain-speaking trade union leader, Caswell Franklyn, held nothing back as he spoke of the damage the Garbage and Sewage Contribution (GSC) levy could do to Barbadians’ pockets.
Prime Minister Mia Mottley had announced in her $1.2 billion austerity Budget on June 11, that effective August 1 this year each household would pay $1.50 per day – about $45 per month – in GSC, while commercial premises would pay GSC equivalent to 50 per cent of their water bills. Pensioners living alone will pay 75 cents a day.
It was also during the Budget presentation that Mottley confirmed that the Barbados Labour Party administration would keep its campaign promise and would scrap the NSRL effective July 1 this year.
However, Franklyn today said it was all “smoke and mirrors, creating the illusion that they were removing taxes”, while placing a greater burden on those “who can least afford to pay these taxes” by introducing a punishing water tax.
“If NSRL was bad, this one is even worse because it is at six per cent,” the Opposition senator told the Upper Chamber.
“You have people who pay $35 [a month] for water, the minimum rate, and you are now asking them to pay $45 in tax. In other words, you are making them pay more in taxes than for the actual service they are getting. How is that fair?”
Franklyn said it would have been better to impose the levy based on usage instead of a blanket $1.50 per day, which multinational professional services firm Ernst & Young said would increase the average water bill by $547 annually, while water bills for non-contributory pensioners would rise by $237.75 a year.
Mottley had said the new tax would fund the Sanitation Service Authority (SSA) after its removal from the Consolidated Fund, with almost all of the fee ($1.25) going towards funding the SSA, while 50 per cent of the monies collected from the tax on commercial entities would be paid to the garbage collection agency, with the remainder going to the Barbados Water Authorithy to offset the operational costs of the sewage systems.
In his contribution to today’s debate Franklyn also accused unnamed members of the last administration of enriching themselves at the expense of the
Barbadian taxpayer, charging that some entered Parliament “as paupers” but left “filthy rich”.
Therefore, he suggested that “politicians who dip their hands into the Government’s coffers too readily need to spend some time” in jail.
The trade unionist was especially concerned about the establishment of an appeals board to oversee the GSC, contending that such bodies led to duplication and the opening for unscrupulous people to put their hands in Government’s cookie jar.
“There is too much duplication of effort by Government departments, and bringing in yet another body to administer this levy could lead to corruption if it is not properly monitored. Governments in Barbados have a history of establishing bodies that carry out work that central Government departments already do, for example the Rural Development Commission and the Urban Development Commission, and to set up an Appeals Board to deal with people who cannot pay the levy on their water bills is completely unnecessary.
“We must avoid creating avenues for people to get their hands on Government money. You can create this thing with the best intentions, but you won’t always be in office; another administration might come in and start fiddling with the money. I know of people in the last administration who came into Parliament as paupers, and by the time they left they were filthy rich. I have no problem with working hard and investing your money, making it on your own steam, but when you have all these little bodies collecting Government money it leads to corruption,” he cautioned.
Franklyn claimed there was “large scale corruption” at the SSA under the last administration, citing as an example the renting of equipment for use at the landfill.
“That Government was spending $23,000 a week renting heavy duty equipment, money which could have been used to buy more equipment than we needed, when all they had to do was in some instances spend about $500 to buy parts for the tractors that needed repairs,” he charged.