Straughn: Salary deductions to help build resilience

Minister in the Ministry of Finance Ryan Straughn has defended the recent deductions taken from ordinary citizens’ salaries, and placed in the Resilience and Regeneration Fund, as necessary for disaster response and household protection.

He clarified the purpose of the deductions following growing public queries and lingering uncertainty.

The minister explained that the updated contributions are part of a broader plan to build national resilience, particularly in the face of increasingly frequent and severe weather events.

“As we saw with Hurricane Elsa and Hurricane Beryl, the need to build resilience is a threat rather than waiting for something to happen in order to deliver relief. We are focused on accelerating repairs to vulnerable homes before the hurricanes arrive, rather than spending more after damage is done,” Straughn said.

He disclosed that the Department of Emergency Management and the Social Empowerment Agency have already identified households across Barbados in need of repair, and the fund will be used to support that work, minimising both disruption and future pressure on the public purse.

“This is about being proactive rather than reactive, as was previously the case,” Straughn added.

The Resilience and Regeneration Fund, formerly the Catastrophe Fund, was revised as part of the 2025 Budget to ensure better readiness for global and natural disasters.

Under the new structure, the contribution rate for employees and self-employed persons rose from 0.1 per cent to 0.25 per cent, and the maximum insurable earnings cap has been removed.

This means that a worker earning $2 000 monthly will now contribute $5, while someone earning $10 000 will pay $25, as opposed to the previous cap that limited higher earners to just over $5.

“In all fairness, equity will suggest that someone earning $10 000 per month should really be contributing $10, as opposed to the $5.28 as is currently the case,” Straughn said in Parliament during the March Budget presentation.

“It is the government’s mission to move from the current posture to a more proactive approach to future-proof the catastrophe fund.”

Government has also moved to tap into unclaimed assets sitting dormant in commercial banks, credit unions, and other deposit-taking institutions, with up to 50 per cent of unclaimed or undistributed assets, held for more than a decade and not claimed after passing through the Central Bank and Accountant General, now being used to bolster the Resilience Fund.

This change took effect on April 1, a move that Straughn has stressed would not infringe on people’s personal accounts. He noted that this strategy complements efforts to secure protective disaster clauses in international borrowing, such as those under the Bridgetown Initiative, and ensures the government can respond rapidly to any shocks that threaten lives, homes, and livelihoods.

“So building resilience is going to be important going forward and that’s why we are focused on being proactive rather than reactive as was previously the case,” Straughn said. (SM)