Former Prime Minister Owen Arthur (right) in Parliament Yard talking with businessman Taan Abed on Monday after the first day of the Budget.

GOVERNMENT is pursuing the wrong economic policy!

Former Prime Minister and Minister of Finance Owen Arthur levelled this charge last night as his Barbados Labour Party wrapped up its contribution to the national Budget debate.

The Parliamentary Representative for St Peter also dismissed the Budget as just a number of measures "intended only to placate a series of small interest groups".

It was not meant to deal with "the fundamental challenge of how you take a country out of stagflation, how you sustain the country's transformation and how you move a country from one position of development to the other", he argued.

In the face of "stagflation", Government ought to be seeking to stimulate the economy, but what it did was bring a series of measures, including a heavy increase in taxation, that would have the effect of clamping down on the economy, Arthur said.

This policy was at odds with that of industrialised nations like the United States and Britain, which were not moving to hike taxes to address their economic problems, Arthur said.

Speaking of other things which the Government could have done, Arthur said Government could have allowed the value added tax and the growth of the revenue to raise the taxes for the country.

He also questioned why Government had given a banking system flush with money $18 million back.

He also called on the Government to stop sending "mixed messages" and "mixed signals" on CARICOM and also to stop missing opportunities presented by the integration movement.

He complained that Barbados was not seriously addressing the "enormous potential" of the Single Market and Economy.

Considering that CARICOM nations now accounted for just under 50 per cent of Barbados' exports, it was not a matter that Government should treat lightly, he added. (TY)