The 2013 Financial Statement And Budgetary Proposals delivered in the House of Assembly recently have sparked much debate among players in various sectors and groups.
And while some said the painful measures outlined to cut Government’s spending and lower the deficit was needed, others argued that they would limit residents’ ability to continue to lead a certain level of lifestyle.
Among the measures outlined was an immediate freeze on all new employment in central Government and statutory bodies. Minister of Finance Christopher Sinckler said the policy would also extend to the hiring of substitutes, temporary and/or casual workers as replacements for appointed staff proceeding on leave.
He also announced an immediate freeze of all non-critical established posts which have not be filled in the last six months and are unlikely to be filled in the near term. Overall, the proposed revenue and expenditure policy measures should result in total savings estimated to be $435.9 million over the adjustment period.
Sinckler also announced a restructuring plan to merge and/or phase out certain statutory entities.
Perhaps the most contentious issue coming out of this year’s Budget was the decision to roll back a major component of free education to save the Government approximately $42 million annually. This will see Barbadians paying their tuition fees from the next academic year in September 2014 while Government will continue to pay the full economic costs for all Barbadians.
This decision was met with a high level of resistance from residents including the student body at the University of the West Indies (UWI), Cave Hill Campus. President of the Guild of Students at UWI, Cave Hill Campus, Damani Parris said students did not agree with the decision and would try to get Government to reverse its decision on Barbadians paying tuition fees from September 2014.
“We will do whatever it takes to ensure that our student body is protected,” he said.
Parris added that the executive, which represents the interest of students at that tertiary institution, would be taking forward “several initiatives”.
Recently, Parris started a petition which he said he hoped to take to Parliament to get the Government to reverse its decision. He said Barbadians attending the other two main UWI campuses – Mona in Jamaica and St Augustine in Trinidad – were “upset” by the Government’s decision.
However, in the Monday, August 19, 2013 edition of the DAILY NATION Prime Minister Freundel Stuart defended the Government’s decision, insisting that his Democratic Labour Party was not at war with UWI.
He said the reality was that funding education had become very expensive, with the subvention to the university more than doubling over an eight-year period, and it could not be business as usual.
Stuart said: “It is not a question of whether you like students or don’t like them or whether you want to see them get through or don’t want to see them get through. It’s a question of what the country, passing through the worst crisis in a hundred years, can afford at this time in this nation’s development”.
Also outlined in the Budgetary Proposals were several incentives for the tourism, international business, agriculture, manufacturing and the alternative energy sectors.
Among the incentives were a cut in the value added tax (VAT) from 17.5 to 7.5 per cent for tourism accommodation, five-year special entry permits for foreigners owning $4 million or more in investments in Barbados for the international businesses sector, and US$270 million to restructure the sugar industry.
The Barbados Hotel & Tourism Association expressed satisfaction with the measures, with the president Patricia Affonso-Dass saying the association was “appreciative”.
She said the Budget did “speak to many of the critical issues the association has been lobbying for, for some time”.
The Government also announced an austerity programme which included a 0.7 per cent municipal solid waste tax on non-improved value of land, a temporary consolidation tax on gross income of people earning $50 000 and over, a 25 per cent increase in excise tax on tobacco products, a cut in the reverse tax credit from $1300 to $650 monthly and a 15 per cent tax on lottery winnings of $100 000 and over.
In the August 19, 2013 edition of the DAILY NATION president of the Barbados Chamber of Commerce and Industry Lalu Vaswani congratulated Government for recognizing a need to cut its wages bill and transfers and subsidies.
Meanwhile, in the August 16, 2013 edition of the WEEKEND NATION, Stuart, in an overall assessment of the Budget, congratulated Sinckler for the “courage” it took to present the suite of proposals which included new taxes.
Stuart insisted that Government had done the best it could in the present economic circumstances and its programmes for growth had great potential.
“The policies which we brought to the country in this Budget were designed to ensure any unsoundness in our economic structure could be fended off,” said Stuart.
