Thursday, April 18, 2024

FOR WHAT IT’S WORTH: Govt was warned

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GOVERNMENT CAN’T CLAIM IT wasn’t warned time and time again by people from various professional areas, including no less a person than Sir Geoffrey Cave. His Guest Column last week brings to mind his earlier warning while he was a senator which made the headline in the NATION’S Editorial Cave’s Caution Is Of Merit on June 5, 2012.

At that time, he wrote: “The truth is that Barbados is in a difficult situation, and the most important thing for this country is to make sure that we do not again have a write-down of finances (meaning that we do not get a further downgrade) . . . . so it is important that the revenue keeps coming in order to assure that the deficit continues to fall”.

He suggested that what was yet to come would be more difficult than we had seen in the last few years. Even before that he advised that Government spending must come down.

I noted in 2013 that Government and the Central Bank had for the first time admitted that Barbados’ debt situation needed controlling. The Central Bank Governor alerted us that the deficit reduction required urgent action. The Prime Minister called for “all hands on deck” to help rectify the situation and added that to save our currency from devaluation we needed to take urgent action.

It was good that Government and the Central Bank actually made the admission, but the important question was whether they had the will and conviction to deal with the matter themselves or would they await the arrival of the IMF to take away the cheque book and do the job for them.

Well, time has revealed that they obviously lacked this will, and unfortunately the Central Bank Governor apparently yielded to them. Now that he’s finally put his foot down and decided to do the right thing, he’s become a sacrificial lamb.

Over the last five years, any suggestions to reduce Government expenditure and to save foreign exchange have been “scoffed at” as being insignificant but when a large number of insignificances are totalled they become significant.

To save foreign exchange, limits could’ve been put on various categories of imports – including those unnecessary food and other items which we could happily live without. Government’s extravagant travelling could’ve been curtailed (what do conferences like the recent Heads of Government Conference and the multitude of others really achieve in concrete terms?) In fact in every ministry there’s wastage which could’ve been cut. Instead of just talking about cutting statutory corporations, action should’ve been taken long ago.

But none of this was done, and so we continue to be taxed. Unfortunately, we can’t see where our taxes are going. While VAT is needed to bring in revenue, we must be able to see how this revenue is spent and we must receive our VAT refunds where applicable. In fact, when I hear of the companies and individuals who owe tax and VAT, I wonder whether these are people who are owed refunds and refuse to pay until they receive their refunds. Why can’t refunds due be deducted from tax owed?

When CLICO collapsed, partially due to Government’s negligence, some were quick to say that the investors were greedy and “must take whatever they get”. Since then Government has deregulated the bank interest rates on savings, forcing Barbadians, including pensioners, to turn to government paper as a means of earning income to maintain a decent standard of living.

But based on the many promises Government has made and subsequently broken without batting an eyelid, and their many assurances which begin by being definite and then are gradually watered down into vague statements, how can all those pensioners be confident they won’t end up in a CLICO-like situation?

The Prime Minister keeps “assuring” us that there will be no devaluation, but doesn’t he realise that soon he’ll have no say in the matter? Sadly, it’s not only Barbadians who’ve lost confidence in this administration. Foreign people who already have property here and were considering purchasing additional high-end property with values like US$8 million have decided against it because they, too, lack confidence.

Furthermore, now that we all desperately need to “pull together” to restore our economy, all hell has broken loose in our leadership, no doubt with devastating consequences for us all.

• Dr Frances Chandler is a former Independent senator. Email: fchandler@caribsurf.com

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