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GSC ease needed – economist

by Marlon Madden
3 min read
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In light of Government registering a primary surplus of $255.5 million for the first three months of the fiscal year, which started in April, Kemar Stuart is again calling on government to provide an ease to Barbadians in the Garbage and Sewage Contribution (GSC) levy.

At the same time, he believes Government could do more in the area of capital investment to help spur economic growth.

Reacting to the latest economic review by the Central Bank earlier this week, he said “What’s clear is that the Barbados economy has been producing record level earnings for the government. The recording of a primary surplus of $255 million indicates the availability of excess funds [and] this is adequate financial resources to grant at least a six-month reduction to the garbage and sewage tax to reduce pressure on the local front,” said Stuart.

Introduced in June 2018 during Government’s austerity budget, the GSC was implemented two months later at a rate of $1.50 per day (discounted at 0.75 cents for pensioners), while commercial premises pay 50 per cent of their existing water bills.

Pointing to the increased revenue of $128.2 million for the January to June period this year, which the Central Bank said was led by higher levels of economic activity and the dividend from rising prices, Stuart said it was due to “taxes collected from the massive increases in Value Added Tax mainly, along with some businesses re-opening and re-hiring”.

“The 10.5 per cent growth in the Central Bank report should be reclassified as a 10 per cent recovery post the massive economic slump from the COVID pandemic. The public should also note that the Barbados economy has recorded eight consecutive periods of economic decline before the pandemic hit in 2020,” he added.

As it relates to capital expenditure, which was around $12.6 million for the April to June period, compared to $28.4 million the same period last year, Stuart said this was “measly”, adding that the increase in such expenditures witnessed over the period of last year when compared to the previous year barely “scratched the surface”.

He said the restriction in capital expenditure has been as a result of the now concluded Barbados Economic and Recovery Transformation (BERT) programme.

“This decision with the International Monetary Fund BERT plan to restrict capital expenditure placed Barbados at the mercy of investors both locally and overseas, especially since the international debt default,” said Stuart.

However, he noted that the lack of confidence in Government paper was making it difficult to secure investment for projects from the private sector.

“The Central Bank of Barbados governor mentioned that government needs to focus on its capital works programme while reforms to state-owned enterprises gather momentum and ease the pressure on government finances. The continued inability of government to kick-start the promised capital works is hampering the much-needed investment into Barbados. The projects continue to be delayed because of the government’s inability to spend its own money on capital works projects,” said Stuart. (MM)

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