I think that the Government has made a commendable effort in proposing policies that attempt to cut excessive spending and raise revenues in specific sectors.
The revenue-generating initiatives for tourism, rum, and alternative energy appear workable. The Government had to cut spending, and was elected to decide for all of us the amount of resources each Government service would receive. Their budgetary proposals are unlikely to satisfy everyone, but I am thankful that some meaningful initiatives have been proposed.
At this point, it is necessary to put the Budget in context.
The Government received advice from diverse sources over the past five years to cut its excessive spending in order to avoid a national crisis. The Government chose a compassionate approach of delaying the spending cuts until the last possible moment, in the hope of avoiding the resulting social disruption. This hope may have been realized had the economy improved sufficiently.
The national economy did not improve, and Government had no choice but to cut its excessive spending and face the predicted social disruption. If the Government’s projections are not met, then the consequences for Barbados are expected to be dire.
In my opinion, the Government’s decision to delay the spending cuts would have worked had the Government tried the proven method to sustain increased revenues. It is the same method that Government proposed in its recent Budget for the tourism, rum, and alternative energy sectors.
Government has effectively reduced their taxes and expects to receive increased revenues. I do not understand how burdening individuals with excessive taxes for the next 19 months will work, given that this approach has not worked for the past five years.
People are free to embrace whatever ideology they wish. However, when that ideology starts to harm others, it should be reviewed and modified as necessary. There are two competing ideologies for sustaining increased Government revenues. One is to increase taxes and the other is to lower taxes.Â
The policy of lowering taxes provided sustained revenue increases for the Government of Barbados. The current policy of raising taxes has not provided the expected revenues, but has instead disaffected individuals, families, and small businesses.
That the Government chose to gamble Barbados’ future on the hope that the international economic crisis’ duration would be short is excusable.
However, to continue to implement an economic ideology that has caused so much harm without much benefit to the national economy, and is predicted to cause even more harm, may be interpreted by historians as irresponsible.
To avoid such a harsh judgement by history, the Government is strongly urged to critically review its economic ideology and change course with dispatch.
Those in the tourism and rum industries appear to have been rewarded with lower taxes for their many years of loud and consistent complaints.Â
Those who faithfully laboured in silence while dutifully paying the exorbitant taxes were punished with even higher taxes. If the Government only responds favourably to loud complaints, then perhaps the time has come to make some noise.
• Grenville Phillips II is a chartered structural engineer and the president of Walbrent College.
