PM announces $17.5m package to ease cost of living
Prime Minister Mia Mottley announced on Thursday a list of relief measures that will be in place for at least the next six months to reduce the high cost of living in the island.
Mottley said Barbados now had to navigate a world that was filled with a level of uncertainty like nothing experienced in living memory due to the rising cost of fuel and commodities on the international market.
She said the measures – which were announced in a “live” televised national address after Cabinet met on Thursday – followed a series of meetings with the Social Partnership over the past few days, including supermarkets and wholesale distributors, and will cost government about BB $17.5 million.
“We are now about to go into the summer, and the Ministry of Education, Techincal and Vocational Training, recognises the critical roles played by the School Meals Department in these challenging times and that they must continue to provide lunches for our children, therefore, throughout the summer holidays,” the prime minister said.
“The Ministry of Finance will also offer relief for our householders’ electricity bills by ensuring that we reduce the Value Added Tax from 17.5 per cent to 7.5 per cent for the electricity charged up to the first 250 kilowatt hours of everyone’s residential electricity bill.”
She added: “The Ministry of Finance, through the Customs & Excise Department, will expand a list of essential food items… on which no VAT will be charged and a few on which no duties will be charged.
“We have concluded a compact… that will be signed on Saturday morning with the private sector that will lead to the reduction of prices on 45 key items for a period of six months from July 21 this year to July 31, 2023.”
Mottley said supermarkets, wholesaler distributors, and farmers have also agreed to hold strain to help ease the rise of prices in the island.
“All will review their mark-ups for the 45 items and have agreed for the most part, for the exception of two or three, to leave their mark-ups no higher than between 12 and 15 per cent to ensure that every Barbadian household, but in particular, the vulnerable, can benefit from these items,” she said.
The prime minister said the items included fresh and canned meats, dairy products, breakfast drinks and cereals, rice, crackers, fruits, and toiletries, which will attract reduction in prices ranging from 10 to 25 per cent.
She said the reduction in the electricity bills represent on average a savings of about BB $17, but taken in the broader context of the measures will benefit about 63 per cent of all households on the island based on figures provided by the Barbados Light & Power Company.
“This will apply to every Barbadian household whether you use 250kWh or not,” she said.
“This is critical because though it may not be a lot, but when you see it in conjunction with the other things that we are doing, then you will understand the wisdom of the old Barbadian saying, ‘That one-one blow does kill old cow’.”
Mottley said she wished there was more that she could do to ease the cost-of-living burden, but the government was being “realistic” with its approach.
The prime minister said the measures will be formally laid in Parliament on Tuesday by Minister in the Ministry of Finance, Ryan Straughn.