Prime Minister David Thompson, smartly turned out in a green suit, and wife Mara, fashionably dressed in a beige brocade linen suit, on the way to Parliament where Thompson delivered his first Budget presentation as Prime Minister. (CG)

by ALBERT BRANDFORD

PRIME MINISTER David Thompson yesterday unveiled a "consensus Budget" package to meet critical election pledges, balanced by increased welfare grants and benefits for pensioners and the disabled, along with free rides for schoolchildren.

It also included stiff increases in the so-called "sin taxes", with higher imposts for alcohol, tobacco and across the gambling spectrum – for the first time a tax on lottery winners – introduction of a monthly $4 tariff on the almost 300 000 cellphones, and higher fees on registered professionals.

Non-contributory pensions will move to $116 per week from September; contributory pensions from $119 to $142, while children and the disabled, who receive help under the National Assistance Act, will get their first raise since 1996.

New taxes

The previous Government's proposal to move the Reverse Tax Credit from $800 to $1 100 this income year and $1 300 next year, will now go to people earning below $16 500 per annum – immediately to $1 300 for this year.

At the end of his 190-minute presentation, carried live on radio and television, Thompson said the new taxes would add $104 million to the Treasury, with the benefits expected to cost $82 million, leaving a net revenue gain of $22 million.

"This Budget calls on the strong in our midst to help the weak," he told the national audience. "The big to help the small; the privileged to help the less fortunate."

Thompson's presentation, his first as Prime Minister, bore all of the hallmarks of the recent national consultations on ways of coping with rising fuel and food costs and the resulting steepling cost of living, including meeting with 40 non-traditional interest groups ranging from vendors, farmers, fisherfolk to taxi drivers, at his official residence, Ilaro Court.

"The reality is that while external factors such as rising energy costs and food shortages and associated price increases are impacting negatively on our economy," he added, "we felt it necessary to put systems in place to cushion the impact on society's most vulnerable."

The atmosphere in and around the House of Assembly was mixed.

Supporters of the two major political parties turned out, but some of them were low-keyed, perhaps representing a lessening of interest in matters political, after all of the hype and excitement of the change of Government on January 15.

Housing proposals

If the presentation had a centrepiece, it may have been the housing proposals which Thompson set against his predecessor's wish to see a car outside every home.

"But if Barbadians don't have their own houses," Thompson declared, "they will merely be parking cars in front of houses owned by others."

With 25 000 waiting for homes, he said, apart from the 1 725 NHC tenants who were given transfer letters recently, Government had identified 500 tenantry lots to be acquired for sale to first-time homeowners at $5 per square foot; and VAT would be removed from building materials on low-income houses valued up to $150 000 for first-time homeowners living there.

Thompson eschewed the path of subsidisation and chose restraint to deal with three major economic issues he identified as (i) projected slow rate of growth in tradable sectors, particularly tourism; (ii) vulnerability in food and energy with resulting pressure on growth of the economy and impact of inflation on the poor and (iii) pent-up unsatisfied demand for housing by lower and lower middle- income families.

Please see also Pages 4, 5, 18-33.