The buzz and analysis from Monday’s budget is only just beginning. Analysts are crunching the numbers, assessing the policies and searching for what’s in it for them.
Like any other financial package, there are pleasures and pain, incentives, tax cuts and new taxes. The Minister of Finance giveth and the Minister of Finance take away. ‘Twas ever thus.
Barbadians are well aware there is no quick fix or magic wand to wave this economy back to prosperity.
For the most part, we are a practical people. Most of us, while hoping for an ease after two years of pressure, frown on pie-in-sky promises and unrealistic measures that could push an already struggling economy into further peril.
The Barbados economy is yet to emerge from the crippling impact of COVID-19 pandemic. Our debt is high and we are millions of dollars short of financing our needs.
Just when we saw the emerging signs of a turnaround, fresh challenges surface with ominous foreboding. The unfolding war in Eastern Europe threatens an already shaky global economy and particularly small island states like ours.
That leaves Government caught between the proverbial rock and a hard place as it seeks to rebuild while managing its limited resources and meeting the needs of the most vulnerable.
We are not out of the woods, so we expect Government to be prudent and manage the country’s affairs wisely as it delivers on promised economic growth.
This budget is a mixed bag. It addresses such immediate concerns as the high prices at the pumps. Consumers will welcome the reduction in the cost of diesel and gasoline in another 24 hours.
The cap on freight costs intended we believe to keep rising prices at manageable levels for consumers, is however somewhat unclear, and it remains to be seen whether or not it will translate into helping to stretch scarce dollars.
The island’s farmers have been handed a deserving measure: a $180 fixed water rate, after being crippled by exorbitant bills ever since the garbage sewage levy was introduced. Any move that can help to boost local food production is a plus.
Not everyone is smiling though. The introduction of a new Pandemic Levy, which will affect both the disposable income of those members of the middle class earning above $6,250 a month and the bottom line of some businesses, will cause consternation for some
And the Alternate Fuel Levy, which will be applied on vehicles not powered by diesel or gasoline at a rate of $25 per month or $300 per year, plus a rate of $0.02 per kilometer above a 15,000 km quota has not been welcomed.
But in our estimation, at least three groups scored big wins last evening.
Families will save big on the soon to be vat zero-rated sanitary napkins, baby and adult diapers, and other personal care items.
Then there’s the renewable energy sector. For months the Government has touted its intention to become 100 per cent carbon neutral by 2030 and yesterday it rolled out progressive plans.
The installation of a solar photovoltaic system on the roofs of all homeowners can deliver significant long-term benefits.
The proposed Excise and VAT holiday on electric vehicles for 24 months from April 1 and the increase in the loan limit to $100,000 for public servants to enable them to buy electric or alternate-fuel vehicles will certainly reposition Barbados to meet its goals.
More than ever, soaring oil prices remind us that we cannot delay the move to renewable energy. We have long enjoyed the benefits of solar water heaters and the Transport Board has reported substantial savings from its transition to electric buses. We have every reason to move forward.
Our move towards implementing renewable energy and energy efficiency initiatives will not only reduce our carbon footprint, but its greatest impact will be achieving energy security and the attendant implications for spurring economic growth.
Likewise, health practitioners and advocates for healthier lifestyles must be over the moon with the increase in the excise tax from 10 per cent to 20 per cent on sugar-sweetened beverages.
Sugar taxes are recommended the world over as part of measures to curb deadly non-communicable diseases such as diabetes, stroke and cancer. These diseases wreak havoc on our households and our societies.
We welcome the sugar tax but this is only the beginning to help Barbadians make healthier choices. Government sooner rather than later must go even further to make healthier foods more affordable and increase the number of safe spaces for Barbadians to exercise and relax.
This budget did not meet the threshold for a Pandemic Reconstruction Plan. But it came awfully close and we expect that additional fiscal measures and policy moves by this administration will be needed sooner rather than later in order to chart a new course of equality, empowerment and engineering of renewal in our republic.
