Government has paid out close to $300 million in debt for the financial year so far, stimulating much-needed economic activity, Minister of Economic Affairs and Investment Marsha Caddle has claimed.
During debate Tuesday in the House of Assembly on a bill to amend the Land Tax Act, the Minister outlined how the money was spent.
“At the beginning of this financial year Government’s arrears stood at $577. 7 million dollars. And by September 30 it was at $316. 8 million dollars.
“So that over the last 17 months we saw that people received tax refund arrears in cash in the amount of $40. 5 million dollars; that state-owned enterprises trade creditors received in cash and bonds $176. 2 million dollars; arrears from Government to the private sector were settled to the amount of $29. 6 million dollars,” she said.
The Economic Affairs Minister declared that because of “good governance” and a major stipulation in the IMF’s Barbados Economic Recovery and Transformation plan Government must pay what they owe.
Caddle told the House: “Under the IMF programme there is to be the non-accumulation of arrears quite simply you have to pay people what you owe people.
“We have come to Government to show Barbadians that we are true to good governance by simply paying for what you consume, paying people what they are owed.
“I have been hearing some small noise in certain corridors that suggests that this Barbados Labour Party Government is not focused on growth and I think perhaps some may have missed it because what we have been able to do is use the areas in which we must be compliant as part of an IMF programme as a platform for growth.”
Explaining how people with more money will in turn spend and help the economy, the MP for St Michael South Central said this was Government’s strategy all along.
Caddle said: “What does this mean? It means where some might see this as a restriction where some might see this as something that is difficult to manage, we have actually been able to use the repayment of arrears to be able to stimulate economic activity in the country.
“When you refund individuals and companies their tax refunds they are able to take those resources and invest in their small businesses they are able to take that new disposable income.
“It means you can engage self-employed people, people who work for small companies you can engage those people to provide services.”
The Minister said Barbados was doing something “unheard of” by using the BERT programme as a growth plan.
She said: “This Government has been able to use structural benchmarks and other targets under an IMF programme to get a country growing again.
“That is unheard of in any IMF programme. That is what creative Government looks like.
“That is what happens when you understand that fiscal deficit starts with a ‘f’ and not a ‘ph’.”