This country faces one of its darkest hours in relation to the economic and by extension social problems that face the country. Never before has a Government come to report a worse performance than is contained in these Estimates.
A Government that told us we were talking nonsense when we told them that the deficit of 6.9 per cent was a fiction, a Government that told us we were talking nonsense when we told them that they could not achieve 5.4 per cent in budgetary measures of pain, that it was sacrifice without safety, without hope of recovery.
That the voiceless were being asked to carry the burden when there was no guarantee that they would be taken to safety. A Government that set out a Medium Term Fiscal Strategy with worst case scenarios has now presented a fiscal deficit of 11.8 per cent, more than double the worst case scenario that the Minister of Finance set out to achieve in August 2013 in his Budget.
It is the equivalent of the Minister of Finance coming to tell this country ‘I intend to lose 50 pounds in August last year and when we put him on the scale today far from losing 50 pounds he gained 120 pounds. This is twice as bad as your worst case scenario. It is a written confession of utter failure, it is a written confession of incompetence, a confession of inaction.
The Government has runaway expenditure, but worse, an implosion of revenue; our revenue has collapsed and as a result of the revenue collapsing expenditure is still up in the vicinity of $3.9 billion. The financing of Government’s deficit has become the most critical problem facing this country.
So that you now move from unsustainable fiscal deficits to a financing problem that by reason of the choice and manner of financing – short-term financing through treasury bills by the Central Bank printing money – reserves have been put under pressure.
These are not my words. These words come out of the Government; these words go from an admission from the Government, the IMF and everybody else that it has spoken to. What is of more concern is that if you could not achieve a $120 million adjustment in seven months, announced in the Budget in August, $88 million in expenditure cuts, and $36 million in revenue, how, pray tell, are we going to achieve a $510 million adjustment in 12 months? That is what these estimates now speak to.
The Government says that it will move its deficit from 11.8 per cent of GDP to 5.5 per cent of GDP. That is a reduction of 6.3 per cent, it is a $510 million adjustment either through a contraction in expenditure or an increase in revenue or combination of the two.
A Government that cannot secure $120 million adjustment in seven months wants the people of Barbados to believe that it can do four times that and more in 12 months.
(These remarks were made during last week’s Estimates debate)
Mia Mottley is Leader of the Opposition.
