WILD COOT: Convoluted thinking
By Harry Russell | Mon, January 28, 2013 - 12:00 AM
Two things got my goat just the other day. No, it was more than two things. But first of all we have the senseless removing of the corporate veil from directors so that they can be held personally responsible for a company’s failure to pay Value Added Tax (VAT) and so on.
So you are an entrepreneur who wants to do business. You are advised to think in terms of a company. If the company happens to fail, there is no protection, whether you want it or not, for your personal assets vis-à-vis these business obligations.
Yes, I know that banks take guarantees, but sometimes the guarantee is confined to the main director. In this case it is the law and all the directors are involved. Moreso all directors are not financially involved in the business. This law makes me want to corrupt the saying about those who passed it: Edo, ergo cogito (I eat, therefore I think).
Would you want to be a director of a company chosen for your expertise but without financial links to the company, and somehow the company goes belly up owing VAT for which you are personally liable?
There is the recently published declaration of assets law that seeks to identify the assets of all of your family members (including children). Some of the best social and economic brains in our society would not enter the election race or serve on boards because of this stipulation. They are reluctant to broadcast their and their families’ personal business for the scrutiny of the world and the media.
That is not all – although there is the fear of bribery, no effort has been made to deal with those who seek to corrupt people in positions of power.
The unholy marriage between the Minister of Finance and Governor of the Central Bank may not be a good thing for Barbados. You might be familiar with the saying, “One can’t tell the other come back.”
Instead of improving, our position is deteriorating, and all the bozos are saying is that it is happening all over the world. Not so! Predicting a half-dead 0.7 per cent growth with our main tourist area going into a third recession in short order shows a willingness to accept the status quo with a view to seeing us drift for the next five years.
There will be increasing country debt so that our bonds will deteriorate from junk bonds to garbage, presenting no problem for Government spokesmen.
The money we got recently from the iniquitous sale of Barbados National Bank shares will probably be spent on elections and shoring up wages for three months also temporarily improving the foreign reserves with the sale of the family silver.
We need a change. According to Henry George in his Social Problems, “There is a danger in reckless change, but a greater danger in blind conservatism.”
Suggestions now being made as to how we can drag ourselves out of this morass are being called reckless. But there is no effort to climb out of the hole by the present lot. We keep holding strain, hoping that Britain and Canada will bounce back and catch us in the swing without seeming to realize that the worse our condition is, the “junkier” the bonds and the further away investors will want to fly. Perhaps those investors already here who give their calypso mouth liberty have no option but to be optimistic or are fervent believers in the recent polls.
In 2009 I wrote, “Our main problem is, and will be next year, getting enough foreign exchange to survive – buy food, pay (foreign) debt. More spending by Government is scheduled to increase our local debt. That is a direct increase in a taxation effort that will hurt the middle class mostly for they are the ones who bear the burden of taxation. The net is so wide that the working class, except for VAT, is almost totally excluded and companies can carry forward losses.
“So are we going in the right direction or are we digging a hole to bury a hole?”
Appealing to the crowds at mass rallies is no failsafe for re-election when there is a hurting middle class in Barbados.
• Harry Russell is a banker.
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