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Plan to cut $215m off Govt spending

BARRY ALLEYNE, [email protected]

Plan to cut $215m off Govt spending

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Prime Minister Mia Mottley yesterday presented the first phase of the three-part Barbados Economic and Transformation Recovery Plan, produced in conjunction with the Social Partnership and aimed at significantly improving the country’s fiscal deficit in the shortest possible time.

Mottley told the House of Assembly the wide-ranging plan would see a reduction of $215 million in Government spending in the initial phase and allow the country to see economic growth in 36 months.

In a presentation lasting two hours and 25 minutes, the country’s eighth Prime Minister removed the Barbados Tourism Marketing Incorporated and the Barbados Tourism Product Inc. from the Consolidated Fund in a move that would save taxpayers $96.3 million.

At the same time, she also asked Barbadians to pay for better health care and maintenance of sewage services through specialised taxation.

‘Plan will work’


“The first phase of the plan will work, principally because it is not my plan. It is our plan; it is the people’s plan. It is the plan that emerged from many long hours of discussions and agreement with all of our Social Partners. It is a plan of solidarity. It is a plan that profits from something uniquely Barbadian, our willingness to empathise, to carry each other’s burden and to live harmoniously together. It is a partnership plan based on a partnership of Barbadian pride and industry,” Mottley suggested.

The Prime Minister also made good on a number of manifesto promises.

Using her mantra of “Give me the vote and watch muh”, which she popularised in her campaign, Mottley fulfilled her pre-election promises by repealing the controversial National Social Responsibility Levy from July 1; removing tuition fees for undergraduate students at the University of the West Indies from next semester; increasing non-contributory old aged pensions to $225 per week; granting a one-year, five per cent across-the-board wage increase to public servants; and removing road tax.

 “We need all Barbadians aboard for love of country,” Mottley said to a packed Lower House, with specially invited guests from the Social Partnership in attendance, and a packed public gallery upstairs.

“The bleeding has stopped. The patient is still in intensive care, but the prognosis is very good,” Mottley said to loud table-thumping after presenting details of the plan.

Fuel tax


Where Barbadians will have to pull their pockets from July 1 will be for a fuel tax, to be levied at a rate of 40 cents per litre of petrol and diesel, and five cents per litre of kerosene.

To put this in perspective, under the existing road tax, car owners paid effectively from $33 per month up to $133 per month,” the Prime Minister said. “Many taxpayers do not have that amount of cash to spare. The average motorist is unlikely to pay more under this new fuel tax than they paid in road tax. Improved collection means that the fuel tax is likely to raise $80 million, while the combined road tax brought in $65 million,” she explained.  

From August 1, Barbadians will also pay $1.50 per day on their water bills, combining to help pay for garbage collection and maintenance of sewage systems.

Of that amount, $1.25 will go to the Sanitation Service Authority for garbage collection and the remainder to the Barbados Water Authority.

Registration fee


Value added tax is also being introduced on all online purchases.

“In addition, there will be a registration fee for new vehicles. The new fee for registration upon purchase of new or second-hand private vehicles will be $400.

“All persons purchasing commercial vehicles, whether new or second-hand, will pay a registration fee of $1 000.  These commercial vehicles will still be required to register on an annual basis but will now pay 50 per cent of the previous fees paid as road tax, which is expected to yield $5 million,” Mottley added.

She stressed that, without burdening the people of Barbados, her Government would attempt to get the country back on track by promoting growth without the overuse of tax concessions, restructuring public debt, and consolidating Barbados’ fiscal position in a significant manner. (BA)