The 2010 budgetary proposals have received a thumbs up from the business sector, with some leaders commending Minister of Finance Chris Sinckler for having the courage to introduce certain measures that may be unpopular.
“The Minister of Finance did a very good job in his first Budget, he was very confident and competent . . . . He did some very bold things,” president of the Chamber of Commerce, Andy Armstrong, said in his opening remarks to a large assembly of business people and some members of the Diplomatic Corps.
Armstrong was addressing the annual post-Budget breakfast discussion presented by the Barbados Chamber of Commerce at Hilton Barbados hotel yesterday.
Responsible Budget
His comments were supported by panellist John Williams, chief executive officer of Cave Shepherd, who described it as “a responsible Budget”, adding there was “a clear recognition that the Government had to act”.
Williams said the revenue raising measures were “very specific, and would “hurt in some areas”.
While he admitted “they are not things that we in the private sector welcomed”, he conceded it was “a general recognition that the Government had to deal with the problem at hand”.
“We as businesses are having various levels of challenges to us, some are doing okay, some are not doing so okay, but no business can really do well if the country on a whole is on a downward path; so we had to address that problem,” Williams added.
The other panellists were Gloria Eduardo, tax partner with PricewaterhouseCoopers and Dr Justin Robinson, an economist with the University of the West Indies.
Eduardo said in trying to craft strategies to buttress the economy against the worst effects of the recession, the Minister of Finance had acknowledged that the country did not have the financial resources to introduce any large-scale economic stimulus package, but she acknowledged Government’s aim “to contain Barbados’ external debt, protect the foreign exchange reserves and maintain jobs in anticipation of the country returning to a sustainable growth path”.
The tax expert said, however, more needed to be done to address the current level of expenditures, and she also expressed disappointment about the absence of a reference to a wage restraint policy in the Budget.
“This would seem to be a critical and indispensable component in tackling the current account deficit,” Eduardo said.
Referring to the proposed 2.5 per cent increase in the VAT, Eduardo pointed out that fluctuations in the VAT?rate worldwide were not uncommon, and she referred specifically to Britain where the latest budgetary proposals contain a rate of 20 per cent from January 2011.
The tax expert looked at all sections of the Budget in her detailed analysis.
Meanwhile, Williams described the increase in bus fares as a “reality check” for the Government, likening the decision to the previous removal of subsidies on gasoline and petroleum products.
“I think that we have to use examples like this to say to the persons in policymaking positions that you can make decisions that seem politically impossible but really are very necessary.”
Expressed concern
Williams, however, questioned the wisdom of Government’s creation of several funds rather than seeking to improve conditions to facilitate doing business, and expressed some concern about the need for public sector reform.
For economist Robinson, it was “an interesting Budget”.
“It seems to me that the overriding priority of the Budget was to really begin to restore fiscal sustainability in Barbados and also to begin to restore Barbados’ good name internationally in terms of its fiscal prudence,” Robinson said.
There had been a “dramatic worsening of Barbados’ public finances” in the last three years and Robinson argued that was “not a sustainable path for Barbados”. (GC)
