THE ISSUE (ON THE LEFT): Too much left unsaid in Budget
Did the Budget adequately deal with key issues facing Barbados?
There were three issues that needed to be addressed: the Government’s fiscal position, debt position and strategies for growth and development going forward. Clearly, this was about the fiscal position only.
We had hoped at ICAB that the tax reform recommendations of the International Monetary Fund would have been revenue neutral and in fact that in broadening the base of the value added tax that the opportunity would have been taken to reduce the rate which would boost confidence and also provide some level of ease. That is not the case. We can only hope that as situations improve that that matter of lowering the rate will be contemplated.
It is our view that lower rates of taxes engender compliance, high rates of taxes you know what they would cause. In terms of matters that we think require more attention on the fiscal side, a large part of the fiscal deficit is the almost $1 billion in transfers and subsidies. Any matter of solving the fiscal deficit without squarely addressing transfers and subsidies, will not really come to a proper conclusion.
There was some mention of the reform of the statutory boards.
We didn’t think enough clear, hard information was there.
We clearly support the commitment to the strengthening of corporate governance, the implementation of some systems of business planning, of reporting, of having clear roles for the minister, the board and the management, but at the end of the day what will that mean in terms of numbers? What does the Government want its statutory boards to do?
There is still this idea that Government is a permanent establishment and that whatever expenditure is required you merely go to taxation.
I am the view that from time to time Government and people need to have a discussion concerning how much Government we need and how much government can we afford, and what form and format should the exercise of Government take.
So in relation to statutory boards you know why they were formed at different points in time, we need to do what the United Kingdom government did a few years back.
We need to look at all of our regulations, especially those affecting business.
Have the objective conditions in which business and individual functions changed, such that what was a great statutory board, or a great regulation ten years ago may not be needed now?
And I do not think we have done enough of that and as part of therefore of the reform of the statutory boards and the cost to run them we really need to discuss which ones are necessary, what should they do, and how should we fund it.
The hints that we have gotten so far are that user fees will increase by $6 million, but no details on which entities will charge what and the impact on business or individuals, we also have with the Sanitation Service Authority the tipping, an additional $4 million, but the absence of a competitive framework is a missing element.
The one other element I don’t think there was enough of a definitive position stated was that of the fiscal rules. My concern is more what was not said and where sufficient detail was not given.
Reginald Farley is executive director of the Institute of Chartered Accountants of Barbados. His views were shared at the Barbados Chamber of Commerce and Industry’s post-Budget discussion.