Faced with a pressing need to kick-start Barbados’ economy and reduce the deficit, Government is putting everything on the table for consideration.
And by everything, new Minister of Finance Chris Sinckler means all policy options, ranging from raising revenue – possibly by increasing taxes – and cutting expenditure to considering a wage freeze and price controls.
But whatever mix of policies emerges, Sinckler insisted two things were certain: Government will take every step to protect the poor and most vulnerable, and Barbados will have a Budget “sooner rather than later”.
“We continue to look at all of the options,” Sinckler told the DAILY NATION shortly after signing two energy loan agreements with the Inter-American Development Bank in Washington, DC, one for US$45 million which must be repaid, and a “non-reimbursable” loan for US$12 million to aid in energy diversification.
“Nobody likes taxes but the country has to have revenue to operate,” he pointed out.
“Free health care, free education, the extensive social system, this all has to be paid for. But, of course, you can’t place an overburden in terms of the tax take on the public, households and businesses, because you would have the opposite effect.
“You would raise a lot of taxation but you might stunt growth by severely contracting aggregate demand. But we want to find a judicious balance between efforts at expenditure cuts and also at raising revenue.
“There is a big debate about whether or not you raise taxes in recession or cut them, and as I said we will be looking at all of the options and putting our heads together with the most judicious blend of fiscal policies that can sustain Barbados,” he added.
Sinckler, who assumed duties as Minister of Finance a week ago following the latest Cabinet reshuffle by ailing Prime Minister David
Thompson, said the recent request by the National Union of Public Workers for an eight per cent wage increase spread over a two-year period didn’t come as a surprise because the union must represent its members.
But he was quick to add that Government was prepared to negotiate with the union in good faith and find a settlement.