THE BUDGET which the Minister of Finance delivered on Tuesday last will long be remembered as the Budget which ended free tertiary level education in Barbados. He claims that this was necessary given the economic constraints facing the country at this time, and he justifies the imposition of new personal income taxation on the same basis.
He declares, in other words, that the exigencies of our economic condition have forced his hand and that the international recession has caused this situation to develop and that the ongoing battle is one of preserving our foreign reserves. His views may be rooted in politics of the economy, as his head wears the crown and he sits in the hot seat just now.
His description of the Budget as robust is perhaps not misplaced, but the problem facing the island cannot be ascribed only to the international recession, if only because of what the Minister told us right at the beginning of his speech.
His declaration about the possible lack of confidence which might have motivated the loss of $300 million in the foreign reserves cannot be blamed on the international recession since that movement never took place during 2008-2013 when the recession was at its most potent, but has occurred since the result of the last election.
This should be a cause of considerableworry because if, as Mr Sinckler suspects, it represents a loss of confidence in the Government’s ability to deal with the problem at hand; then growth and the foreign direct investment may well be at risk with the toxins flowing from confidence factors affecting the rest of the economy, breeding unemployment and adversely affecting Government’s revenue.
In her reply, Opposition Leader Mia Mottley spoke of the confidence factor and touched on this very matter. Some of the panel discussions spoke of the need for what has been called the “buy-in” of the ordinary citizen, and indeed investors, in the government’s plans, so that the confidence factor is a key element in the success of the plans and policies.
In times of national crisis and stress, public acceptance is a critical issue; and to get out of the current problem, greater productivity and a spirit of patriotism will be required – which means that every citizen will have to pull his or her weight.
In the 1990s such public acceptance worked for the Sandiford administration becausethen, once the crisis was made public, thethen Minister of Finance (Mr Sandiford) was brutally candid in describing the situation which existed, the specifics of the proposed way out of the morass and the precise length of time the harsh measures would be in place. And he proceeded with an unyielding certainty which allowed him to keep the philosophical moorings and historically attractive policies of the DLP in place.
Already, in this year’s Budget, and free tertiary-level education (free at the point of delivery) have fallen victim to the Minister’s knife; and with a paper-thin parliamentary majority, the administration now has a serious political as well as a major fiscal battle on its hands.
