The local business sector has described the Government’s 2022 Budget as fair and balanced.
Reacting to the Financial Statement and Budgetary Proposals presented in the House of Assembly on Monday evening by Prime Minister Mia Mottley, president of the Barbados Chamber of Commerce and Industry (BCCI) Anthony Branker said the measures addressed many of the sectors of the economy.
Branker was particularly impressed by the Prime Minister’s renewable energy proposals that would allow “every Barbadian being able to benefit”. He promised a more in depth BCCI analysis later.
The Prime Minister told the country that her Government would work with the Barbados Light and Power to develop a minimum of 30 mega watts of wind energy investment at Lamberts in St. Lucy.
“We will establish financial instruments to make it possible for Barbadians of all walks of life, to participate in, and to own a minimum of a 30 per cent share in the benefits of that 30MW on-shore wind project at Lamberts,” Mottley announced.
“Under my government Sir, Barbadians must never ever be reduced to being tenants in their own country, and therefore we will ensure as a recurring theme of energy investment in this country, that we will create opportunities for the Barbadian public to participate in all major energy investment projects,” she added.
However, the Chamber of Commerce president did not think that the challenges which investors and other business people experience in transacting business in Barbados were adequately dealt with in the budget.
“The one area I would have liked the Prime Minister to have spoken to more was the ease of doing business with Government.
I know she spoke about digitisation, but the ease of doing business across the public sector is an area I would have wanted to hear a little more about,” Branker declared.
The Democratic Labour Party (DLP), while also supporting the Government’s proposals for the renewable energy sector, has otherwise poured scorn on the budgetary measures in general.
Third vice president Ryan Walters said the DLP sees the use of renewable energy as a major vehicle for economic democracy and diversification in Barbados.
“The DLP is pleased that the Mia Mottley administration has finally and enthusiastically embraced the renewable energy revolution which was a cornerstone of the DLP’s economic policy between 2008 and 2018,” Walters said.
Citing a study by Professor Olav Hohmeyer, he contended that in 2010 there were four solar electricity systems in Barbados accounting for seven kilowatts (KW) of installed capacity and that by 2017 this had grown to 850 solar electricity systems accounting for 22,885 KW of installed capacity.
The DLP spokesman suggested that the government continues to speak futuristically while the country has to contend with a present-day reality of taxation, borrowing and spending.
“The immediate relief or slowdown in price of imported food on the shelves is unlikely to reach the end consumers. The capping of duties on ocean freight by itself without appropriate measures to ensure savings are passed on to the citizens will see the price of goods on the shelves remain the same or even get higher,” Walters argued.
He said he was joining with an executive of a major group of companies who said recently that Government’s plan to help ease the cost of living will depend on businesses passing on savings to consumers.
“In other words, the decision is left with the private sector. It is disappointing that the government has not identified any specific measure to ensure that savings are indeed passed on. To defend this theory, when the NSRL was removed in July 2018 even up to six months after that date the retail price index showed an increase of five percent in the cost of food in Barbados. We are at the same juncture again today.
“The DLP holds to its manifesto position that to shield Bajans from high fuel cost, the practical and more effective way to do that was to lower the excise tax on fuel in order to get the maximum savings to consumers especially as prices rise on the international market.” Walters pointed out.
He said that Government’s budgetary measure to cap the VAT does not offer the level of protection that is needed in an environment where commodities can rise exponentially.
“The Prime Minister admitted that they are not using the excise tax as a basis for relief because the Government needs the money.
So in essence, the Government is hoping to cash in on this crisis when it comes to the price of petroleum products,” the party executive stated.
“After being savagely raped by the debt restructuring in 2018, the financial sector is again being abused to finance the excesses of the Government,” he charged. “Ordinary Barbadians who work for these companies are likely to bear the brunt of this new tax grab on the private sector as it is quite possible their bonuses and incentives will take a hit. Furthermore, what is stopping these businesses from passing on the cost of the pandemic levy to customers?”
Walters said that instead of the Prime Minister addressing the issue of Government expenditure and lack of growth, persons earning more than $6,250 are now seen as well-off.
“Instead of incentivising this group earning above this level to invest in the growth of the country, you are effectively asking them to unfairly take a salary cut. The government is transferring the burden onto businesses, who have a history of passing on the costs to consumers. We are back at square one,” the DLP official argued.
The DLP promised it will present more comprehensive comments during its official response to the budget on Tuesday at 6 p.m.
Meanwhile, the private-owned Public Service Vehicle sector which is said to have some 2,500 taxis and 800 PSVs welcomed the proposed reduction in fuel prices at the pump.
“It is welcoming news for the PSV industry as well as the taxi fraternity. We are happy that the Government has been able to reduce fuel costs by 14 cents and we welcome that,” Chairman of the Alliance Owners of Public Transport (AOPT) Roy Raphael told Barbados TODAY Monday evening.
“We are hoping as an industry to capitalise on the 10 per cent import duty that Government would put onto electric vehicles,”
Raphael added.
He recalled that a previous study had showed that members of the sector were not interested in transitioning their vehicles to electricity due to a lack of clarity on how the system would work.
However, the AOPT head reports that now, owners and operators of PSVs are embracing the move towards renewable energy-powered vehicles based on much clearer information.
“After having much discussions with the relevant authorities which includes the IADB and the Ministry of Energy, we were able to come up with a proposal that will see a number of the PSVs, hired cars and taxis transitioning to electric vehicles,” he stated.
Raphael revealed that his union has already started talks with a company out of Trinidad to start testing converters which will help make the change from fossil fuel to natural gas-powered vehicles.
emmanueljoseph@barbadostoday.bb
