BRIDGETOWN, Barbados, Friday June 2, 2017 – The Barbados Parliament stamped its approval on what has been described as an onerous budget in the wee hours of this morning, but not without strong dissent raised by two senior Government Ministers.
Outspoken Minister of Commerce and International Business Donville Inniss and Minister of Water Resource Management Dr David Estwick voiced their strong objections during the debate, but stopped short of voting against the financial package.
On Tuesday, Finance Minister Chris Sinckler announced a series of taxes and levies, including an increase in the National Social Responsibility Levy (NSRL) from two percent to 10 percent, the introduction of a two per cent tax on the purchase of foreign exchange, and an increase in the excise duty on diesel and gasoline.
During yesterday’s debate, Inniss was first out of the blocks to challenge the financial measures. He knocked Sinckler for failing to engage in consultations given the far-reaching implications on households and businesses.
“If the process of consultation is not deep and wide enough, then we are prone to make mistakes. The views of all will not be considered. And I’ve served as a Cabinet minister for nine years and I have raised concerns over and over again at the process. Because at the end of the day, if you’re not careful, what is presented is really from the perspective of one minister or one ministry,” Inniss said.
He warned that the hike in the NSRL would result in a rise in the cost of living, and urged his colleagues to reach out to the country’s vulnerable citizens.
“All I ask is that we ensure that the most vulnerable in our society are not placed in any more of a disadvantageous or uncomfortable position,” Inniss said, while also pointing to concerns highlighted by the manufacturing sector over the increase in the NRSL.
The two per cent levy on foreign exchange is also not sitting well with Inniss who called for the international business sector to be exempt from paying that two per cent commission on foreign exchange transactions due to take effect on July 1.
Inniss insisted that the sector was a major foreign exchange earner and therefore should not be penalized.
Later in the evening, Estwick poured cold water on suggestions that the package would pull Barbados out of the economic doldrums.
He made it clear that Barbados would not emerge from the crippling economic crisis “on taxation and expenditure consolidation alone” when it was riddled with high debt.
Estwick said while Government had recorded some progress in its efforts to consolidate spending with a reduction in transfers and subsidies, this achievement was being undermined by the high debt.
“The problem is that while you had those reductions, your debt service went from 48 per cent to 62.6 per cent, so therefore any improvement you are getting on your consolidation exercise in regard to those measures are being undermined by your growth in your debt service, short term debt and medium to long term debt, that is a fact of life,” he said.
Estwick therefore urged his Cabinet colleagues to undertake a serious review of measures and advised that the focus must be on debt restructuring.
“We have some options to make some adjustments after July. I am saying I think those options should be considered and we should more aggressively move…to refinance and restructure a significant portion of the debt of the country,” he said.