EDITORIAL: Credit unions must speak out
Credit unions in Barbados are clearly very unhappy, and understandably so, given Government’s plan to tax their assets. While we agree that they must lobby against threats to their well-being, there are other issues which the credit unions need to champion – we dare say with even greater urgency.
Given the numerical strength of the credit union movement, Government cannot ignore this constituency and its concerns. The credit unionists must understand that the country is in an economic bind, with little alternative to raise revenues. But, as a people already heavily taxed, members of credit unions will not receive the new measures well. However, these financial agencies cannot base their resistance on a purely emotional argument. They must present facts.
Government will not easily exempt credit unions, given the growth a number of them have recorded in recent years. The reality is that they have been fortunate in being exempted from paying corporation taxes – a privilege not granted other businesses, even small, fledgling ones. Credit union leaders must appreciate that tough measures are necessary to get the economy on a stable footing, far less on a growth path.
In the midst of an austerity programme that has impacted the entire country, the credit unions must be very creative if they are to win the support of members and influence the wider public. The movement, using the Barbados Co-operative & Credit Union League as its anchor, missed a golden opportunity to get credit unions all agitated when Government removed the tax incentive for savings. It was a key reason why many people sought to save with credit unions. There was little or no advocacy on the matter.
We agree that imposition of taxes is never popular, but when they are introduced they must make sense and should be a last resort. In this austere environment the credit unions need to explicitly state their alternative to Government’s planned levy of 0.2 per cent on their assets. It is the well-known not-what-you-do but how-you-do-it methodology to which the credit unions must respond.
They need to move with even greater urgency to ensure that provisions are put in place to protect the savings of thousands of members in the same way those of depositors at commercial banks are protected by deposit insurance. The lobbying effort must be not only for credit unions to be included in the existing $25 000 threshold but also for at least a doubling of this amount. This is the real uneasy situation for thousands of credit unionists.
The credit unions need to keep this cause in the public domain and to gain the widest possible support. It is critical if public confidence in them is to be maintained.