Saturday, March 2, 2024

THE HOYOS FILE: Eddie & The Dreamers


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FROM THE MOMENT I heard that Eddie Abed had been elected president of the Barbados Chamber of Commerce and Industry (BCCI), I thought to myself: “Well, now the Chamber is going to tell it like it is.”

I am not saying previous presidents haven’t done their bit; they were just a bit too muted in their analysis as far as I was concerned.

Another thing has been that for too long the BCCI, in my view, took a back seat as a dutiful member of the Barbados Private Sector Association (BPSA), leaving public statements about how the private sector saw the budget or some new piece of legislation mainly to the BPSA.

But the reason member agencies of the BPSA remain separate entities is that their interests, while generally aligned, have their own areas of focus. The Barbados Employers’ Confederation is a trade union representing employers and what the Small Business Association actually does may be anyone’s guess.

Anyway, Eddie and his fellow council members recently issued a strong response to the Government’s Estimates for the coming financial year. And while I wished the statement had more clearly referenced the facts on which it was based, as it took me a long time to check what it was trying to say in the actual Estimates document, it turned out to be a real stinger of a response.

I expected no less, but for now I will have to dub Abed and his well-meaning fellow BCCI members Eddie & The Dreamers. For what they envisage as the role for the private sector under the Dolittle administration hasn’t happened yet in the eight misbegotten years it has been running the country, and will never happen as long as it is in office.

But what is it that the Chamber is calling for? The BCCI said that while it agreed with the minister of finance that the private sector must lead the economy back to growth, this would only happen if the private sector was treated as “a key stakeholder at the table,” and was allowed to help the Government to create the kind of investment climate required to achieve said growth.

This would mean finding what it termed “more creative avenues to spur the business climate, whether through joint ventures, public-private partnerships or even well-structured BOLT agreements”.

See, the problem right there is that word, creative. It does not exist among the many other talents of the Dolittle administration, which just does the same thing year after year even when their own Estimates show they are not working.

And after years of preaching the gospel of economic belt-tightening, and showing it meant to reduce the middle class to its bare essentials by stripping away almost every tax incentive to improve your home, save for your retirement or invest in the stock market or even a credit union, all of a sudden the Freundel Stuart administration is going to greatly increase the amount it is spending on capital works this coming year. 

According to the Estimates for 2016-17, the Government is going to run a fiscal deficit of five per cent on the accrual basis in the coming financial year, which in real money, means it is going to have negative net operating balance of $465 million.

Total expenditure will be 1.6 per cent higher than the current year, at $4.39 billion, according to the Estimates. The main reasons are a two per cent increase in operating expenses, an estimated 5.6 per cent reduction in statutory expenditure, which is about $60 million, and an increase in Capital Assets by just over 60 per cent, which is about $370 million.

The BCCI said that the proposed increased spending would not allow the country “to get to the safer three per cent (fiscal deficit) originally estimated for the 2016-17 fiscal year”. 

Memo to the Chamber: Finance Minister Chris Sinckler has really given up on that lofty goal, and will be happy if he gets into the neighbourhood of five per cent.

Because of what it saw essentially as a continuing downward spiral – with lower consumer spending resulting in businesses earning less revenue – the Chamber suggested that “some of the measures applied last year should have been dialed back, if only to keep the businesses still in operation in existence.”

Now, to be fair, you wouldn’t expect this to be shown in the Estimates, but in the Budget Speech to follow. But I don’t personally expect it all.

The chamber also pointed out that the malaise in the economy will continue to affect the Government’s efforts to raise taxes, because such a large portion of the tax take is indirect, like value added tax and Excise Taxes. The Estimates for the coming year do show tax revenue on Goods and Services increasing almost $122 million over the revised estimate for the current year, but the BCCI warned that “with consumer spending anticipated to be depressed, (this) will be difficult to attain”.

A tiny little bit of understatement there. Very British. So what the chamber wants the Government to do is roll back taxation and adopt measures which it believes would “spur productivity and incremental growth in a sustainable manner,” because it thinks this would ultimately lead to a sustainable reduction in the fiscal deficit.

Well, I am sorry for Eddie and his Dreamers, but the only efforts to spur productivity in this country are to be found in those workshops paid for by the multi-lateral institutions, which seem to remain convinced that Bajan businesses will do better if they are taught best practice and other such good stuff.

But all they need is a break from this cruel and inhuman regime of taxation, both personal and corporate. Until some measures are adopted to give them a chance to earn their way out of the doldrums, we are all, like Eddie and his colleagues, just dreaming of a better tomorrow.


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