The Institute of Chartered Accountants of Barbados released a statement following Prime Minister Mia Amor Mottley’s presentation of the first phase of the three-part Barbados Economic and Transformation Recovery Plan, on June 11.
The following is the entire release:
Within 18 days of being elected to government and assuming responsibility for an economy, which the International Monetary Fund (IMF) had described as being in “a precarious economic situation”, Prime Minister Mia Mottley took the hard decision of administering bitter but much needed medicine to an ailing Barbados economy.
ICAB notes that this budget is only phase one of a three phase Barbados Economic Recovery & Transformation Plan (ERTP) which is to be implemented over the next three years. We are particularly encouraged by the robust consultation which the PM had with the social partners in preparation for the budget.
We are further encouraged by the commitment made by the PM to have twice monthly meetings with the social partners in the further development and roll out of the ERTP. This level of engagement augurs well for the future and will engender trust and cooperation among key players in the economy at this critical time.
The measures announced by the PM are a clear signal that the government is not prepared to continue operating above its means. Her target of meeting government’s current expenditure from its current revenue by the end of this fiscal year is ambitious but considered necessary to halt the slide and start reducing our national debt. In this regard targeted reduction of the debt to GDP ratio from 175 per cent to 115 per cent in five years and a further reduction to 85 per cent in 10 years is commendable. Indeed ICAB supports the setting of firm targets for several key metrics as well as a vibrant monitoring mechanism along with necessary adjustment to policies in order to keep the economy on course to reach the targets.
The increase in taxation on businesses and individuals is arguably an essential sacrifice which all must share at this time. We however urge that once the economic stabilisation goals are achieved, the government should reduce the level of taxation to more comfortable and sustainable levels. ICAB is pleased to note the commitment by the government to reduce the level of arrears to the taxpayers and suppliers of goods and services to government over the medium term. This will go a long way in restoring the trust of taxpayers and bring relief to some cash strapped businesses.
With respect to expenditure, ICAB supports the announced capital expenditure to fix our crumbling infrastructure some aspects of which are having a negative impact on businesses and workers in the economy. The south coast and Bridgetown sewerage systems, public transportation, waste disposal and our road network cannot be allowed to fall into further decay. The initiatives to remove the funding of some state owned enterprises (SOEs) from the consolidated fund marks a small start to the much needed comprehensive reform of the SOE sector which represents one the largest items of government expenditure.
All Barbadians should brace themselves for some sacrifices during this period of stabilisation. ICAB looks forward with keen interest to the unveiling of the phase two and three components of the ERTP which will focus more on the reform of the economy. (PR)
