The Barbados Manufacturers’ Association (BMA) is generally pleased by the initiatives and incentives presented in the 2012 Budget and is of the view that many of them will result in immediate benefits for the sector.
Business facilitation
We are pleased that the limit under the Trade Receivables Liquidity Facility (TRLF) (Factoring) has been reduced from $10 000 to $5 000 as more small and medium-sized enterprises will now be able to access the programme as it was initially intended. We are further pleased that the intermediaries under this programme will be expanded to include credit unions. We also welcome the additional funds allocated to both Fund Access and the Micro Enterprise Grant Scheme.
Business reorganization
The BMA is of the view that the removal of the Property Transfer Tax is well timed.
Greening Barbados’ economy
We welcome all of the incentives offered under this proposal. It is a bold mission and we are especially pleased that:
• A zero rate of VAT will be applied to all renewable energy (RE) and energy efficiency (EE) systems and products produced in Barbados;
• Developers, manufacturers and installers of RE products will be granted an income tax holiday of ten years. This incentive should result in an increase in the sales of RE products and employment in that sub-sector;
• Financial assistance of $100 million in the form of low-interest loans over an eight-year period will be available to tool and capitalize industry; and that
• Individuals who are studying in the area of RE and/or EE will be able to claim the funds spent on RE and/or EE training provided by educational and vocational institutions (approved by the Barbados Accreditation Council).
We are concerned about the level of foreign exchange that will be needed to import some of the RE and/or EE products and encourage government to seek to encourage the establishment of new manufacturing plants, or the expansion of existing plants, to commence the fabrication of more of these products locally.
Agriculture
We welcome the rebate offered for increasing pig production as the food processing plants and the animal feed manufacturer will become indirect beneficiaries. The $4 000 allocated to improve livestock quality is also welcome.
Strategic investment in key sectors
While we appreciate the establishment of the Hotel Refurbishment, Energy Efficiency and Food Production Fund, we will be seeking clarification of the term “refurbishment” and anticipate that the fine print will ensure an opportunity for the manufacturing sector to increase employment through an increased spend on local products by the hotel sector.
Conversion to RE systems by the hotel sector will also result in immediate benefits to industry.
We see the National Food Production Initiative as an excellent import replacement project and are of the view that it will redound to the benefit of food processors as we anticipate an increased supply of raw materials and the added opportunity to create new products. The agribusiness component should also provide spinoff opportunities through the supply of value added sugar and sugar based products.
The $10 million allocated to the National Alternative Energy initiative will enable manufacturers to apply for financing of, and conversion to, energy efficiency plans and alternative energy electricity generation projects.
Tertiary Education Fund
The establishment of the Tertiary Fund should address the need for special skills in the manufacturing sector. Many firms in this sector have evolved technologically and this initiative should reduce the present need to import the required skills. We look forward to continued consultation on the type of skills that are required in the sector.
Capital market development, investment financing
We eagerly support the initiative to strengthen the Junior Stock Market and agree that this will provide an additional avenue for SMEs in the productive sectors to access capital.
