Barbados sees gains, but challenges remain – Boyce

Independent Senator Kevin Boyce has warned that despite improvements in key economic indicators, Barbados faces a significant budget deficit in 2025, with government expenditure projected to exceed revenue by $1.15 billion.

Speaking in the Senate on Monday, Boyce acknowledged the government’s fiscal progress, noting a drop in debt-to-GDP from 114.6 per cent in 2024 to 101 per cent, a fall in inflation from five per cent to 1.4 per cent, and an improvement in the country’s international credit rating.

He however cautioned that the widening gap between spending and revenue could pose challenges for long-term economic stability.

Dissecting the recently presented 2025 Budget, Boyce said while the government has defended its fiscal management, the opposition has raised concerns about the high level of taxation and borrowing.

He noted that while policies such as the Resilience Fund—a financial cushion for future crises—make sense in principle, public unease over using dormant bank accounts to fund it must be addressed.

“When people hear that you’ve taken money from bank accounts, it doesn’t sound good,” Boyce said, encouraging the government to further explain the legal basis for the move to avoid speculation and misinformation.

The senator also flagged concerns about the new 20 per cent tax on salty foods, which he compared to the existing sugar tax, questioning whether it would effectively change consumer behavior.

He instead suggested tax incentives for gym memberships to encourage healthier lifestyles, noting that positive reinforcement could be more effective than corrective measures.

Another contentious issue, according to Boyce, was the sharp increase in the visitor licensing fee for rental cars, which he noted has jumped from $10 per rental to $10 per day.

He warned that the higher cost could push consumers toward the unregulated car rental market, hurting legitimate businesses that already struggle with taxes and operating costs.

Boyce also took aim at the government’s slow implementation of tax credits announced in the 2024 budget, including incentives for digital transformation, elderly care facilities, and sports investments.

He said delays in enacting legislation have stalled these initiatives, preventing businesses and individuals from benefiting.

“We have a situation where budget proposals are made, but if the laws aren’t passed, the impact is lost,” he said, calling for faster follow-through on economic measures.

Though the independent senator shared strong support for certain budget measures, he emphasised that how policies are rolled out matters as much as the policies themselves.

He urged the government to address implementation challenges, improve public communication, and refine taxation policies to avoid unnecessary strain on businesses and consumers.

“The ideas are there, but execution is key,” he said, (SM)