Members of the private sector have suggested that Government has not done enough to cut expenditure or improve productivity and efficiency in the public sector.
Speaking last Wednesday during a post-Budget breakfast discussion hosted by the Barbados Chamber of Commerce & Industry and PricewaterhouseCoopers, Eddie Abed, managing director of S. Abed & Co. Ltd, queried whether Minister of Finance Chris Sinckler delivered a balanced budget.
“If my memory serves me correctly, the only reduction in spending I’m aware of is that the minister alluded to . . . telling all the ministries to cut two per cent across the board.
“Surely we haven’t done enough on that spending end. That’s really part of why we’re in this position now. We’ve overspent through the years,” he said.
Abed said Government was essentially a large business and there were two aspects of running a business which need to be balanced: revenue and spending.
In response, economist Troy Lorde said, “Government spending is always a very ticklish issue”.
“That’s largely because, of course, the core spending goes into certain sectors.
“Education and health are the two largest and any reduction in those are going to cause Barbadians to probably riot,” he said.
Lorde suggested however that most people’s ire in terms of Government spending was directed at “the public sector itself”.
“There’s not going to be any reduction in the public sector and the reasons for that may be political,” he said.
The lecturer at the University of the West Indies Cave Hill Campus suggested that Government should therefore focus its energies on increasing productivity so that it gets more output for what it is spending.
“The issue then of spending in the public sector cannot be addressed in one Budget. Let’s look at what we want the public sector to look like several years from now,” he said.
Former Barbados Bankers’ Association president Horace Cobham said there was “precious little” Government could do to increase its revenue but “something that is fundamentally within our grasp that we’re not tapping is efficiency of the economy”.
He said little could be done within the economy that doesn’t involve Government in some way.
“Our cost of production is too high and not only because our inputs are costly but because it simply is taking too much time and effort to produce,” he said.
Cobham, who is market head of personal banking at RBC Royal Bank, said “the Budget tinkered with the economy around the edges”.
“I didn’t see anything that represented anything groundbreaking or earth-shattering.
“I think for the most part the renewable energy initiative was perhaps the most positive [item] of the Budget speech,” he said. (NB)
