Government’s finances ‘now in the black’

For the first time in several years, the Barbados Government has earned more than it spent, said Minister in the Ministry of Finance Ryan Straughn.

Straughn made the revelation in the House of Assembly today on a bill to reform Land Tax, the final element of the Barbados Economic Recovery and Transformation (BERT) programme needing lawmakers’ approval.

In quoting the Central Bank’s Economic Report for the first nine months of the year, Straughn said:

“For 2014/15, the fiscal deficit was 7.6 per cent, and this figure was in parentheses, meaning it was a negative balance. For 2015/16, that figure was nine per cent, in 2016-17, 5.3 per cent and in 2017-18 4.6 per cent.

“This was when the previous Government kept increasing taxes and there was never any indicator as to how they were spending the money, and the debt build-up was choking the life out of the economy.

“However, starting from 2018/19, we had a deficit of 0.3 per cent, almost a balanced budget, something that we have not seen for some time but in the last column, which covers April 1 to September 30 this year, the number is 2.8 per cent without parentheses, so for the first time in over a decade, we are running fiscal surpluses.

“This means the Government is paying its bills, with a little bit left over as you have to keep the cashflow going and keep projects going.”

Declaring that some critics would object to the Government operating at a surplus, Straughn added: “The truth is, we have been doing old work while trying to do new work, and we are running surpluses because we have to pay arrears the last Government left behind with no money to service, so we have sought to reform the way we manage public finances through execution of debt restructuring, as well as modernising our systems across Government looking at all our processes to see how we can better and more efficiently serve the public, and we shall continue on this path.”

The Minister in the Ministry of Finance sought to explain why Barbadians still have not seen any new buses or more new garbage trucks which the administration had promised despite the reforms to the tax system. He said the economic recession in the latter part of the past decade meant that companies did business differently now.

Straughn explained: “Since the global economic crisis of 2008/9, people have not really been keeping items in inventory; the only way people will start work is when they get their deposits.

“We are conscious that we need to improve the services and we shall.

“Our mission was to fix the problems we found, we have done that and are still in that process, so we will continue to stay the course and despite what people may wish to infer about the performance of the Government, the Cabinet took the responsibility to solve these problems based on what people would want from their Government.

“We appreciate that some people are still disappointed as some systemic issues have not moved fast enough, but the surpluses will allow us to repay all those things so we can continue to improve those services.”