IF GOVERNMENT wERE looking for a short-term solution to the island’s economic woes, then it should have simply sold off its shares in the Barbados National Bank (BNB) rather than impose a “rough and tough” budget sure to burden ordinary households.
But if Government were seeking to address the fiscal situation in a more meaningful way, new Minister of Finance Chris Sinckler would have taken steps to refinance the island’s debt rather than sit back and “do nothing”.
So said former Prime Minister and Minister of Finance Owen Arthur yesterday in his reply to what he described as a “karaoke Budget” presented by Sinckler last Monday.
Speaking in his capacity as Leader of the Opposition, Arthur acknowledged to the House of Assembly that there were no easy solutions to the current economic crisis, but said what Government had presented would cause more hardship for the poor that would lead to “social and economic chaos”.
“He [Sinckler] promised . . . a new growth path. But what he presented was in part a holding action to raise revenue for one year,” said Arthur, adding that the problem was too big to seek a “temporary revenue holding measure”.
The revenue-earning measure of increasing VAT from 15 per cent to 17.5 per cent was to put an unnecessary burden on the poor when Government could have sold its shares in the BNB — “a relief measure I would have supported”.
“I know I am going to get a lot of licks for saying that,” Arthur told the DAILY NATION in an interview shortly after making his presentation last night.
“But the truth is Minister Sinckler has only introduced measures to beat the poor. He could have raised up to $150 million by selling off BNB shares, which is more than the $125 million Government will earn by increasing VAT.”
In any event, he said, these were short-term measures that would neither stimulate growth nor create jobs.
A medium-term solution, he said, in his televised addressed in Parliament, would have been to refinance the local debt as has been done in other Caribbean islands that were farther on their way to economic recovery than was Barbados.
No bunching of debt
Under the “judicious management” of his administration, Arthur said steps had been take to ensure there was no “bunching” of debt repayment so that external loans were adequately serviced.
“The minister needs to be innovative and to create the fiscal space needed to deal with our debt problems without putting an unnecessary burden on the lower and middle classes,” he said in the interview.
By consolidating its debt, he said Government could have started several major projects in the energy, tourism and agricultural sectors and thus create more jobs.
“There’s no point coming to Parliament with measures and then doing nothing about them,” he said.
As a consequence, he added, Barbados was barely “limping” out of what is now a three-year recession, with nothing in the Budget suggesting an improvement in 2011.
Arthur’s near four-hour presentation was hardly interrupted, with most of the thumps on his side of the House coming from Christ Church West MP Dr William Duguid.
However, it was his last pronouncement that got the entire Barbados Labour Party (BLP) bench to knock on wood.
That was when Arthur told the Democratic Labour Party parliamentarians that if they were unable to handle the economy “then call a general election” and let the BLP take over.
At this point, recently ousted Leader of the Opposition Mia Mottley, who had for the most part been quietly making notes throughout the presentation, rose to her feet and gave the table three heavy thumps.
Mottley later told the DAILY NATION she had hoped to speak last evening, but would make her contribution this morning at ten o’clock. (CG)
