EDITORIAL: Mixed Budget

JUST a few days ago Minister of Finance and Economic Affairs, Christopher Sinckler, delivered a Budget that was a mixed bag of measures and proposals. We can say at the outset this was not at all a surprise, but was expected given the tough economic times Barbados has been experiencing.

 

So there were not any major give-aways as such, but Minister Sinckler’s Budget had “goodies” for some segments of the society. Included in those was the six-month tax amnesty, starting next month for taxpayers across the tax categories of Value Added Tax, Income Tax and Land Tax, as well as the intention from October 1 to increase old age non-contributory pensions by $10 a week for the 6 333 persons remaining on that roll. He also announced Government’s intention to appoint all temporary officers in the Public Service with more than three years’ continuous service at a threshold date to be determined by a Working Committee led by the Ministry of the Civil Service. This proposal has no doubt sat well with those officers and their trade unions, as their employment status is on its way to becoming secure.

 

But one could argue that it was more a Budget for the private sector, as the aim seems to be to stimulate growth in the economy. Mr. Sinckler’s announcement then that Government intends to create a special fund, worth some $50 million, to provide both grants and soft loans to fund the small business sector was music to that sector’s ears. For some time now many pundits have been suggesting that the micro, small and medium-sized enterprise sector will be the ones to take, and keep this country on a sustainable growth path, and such an injection of funds would go a long way in helping them to do so.

 

Also of interest to the private sector, we are sure, was the indication that Government has been researching the possibility of creating duty-free zones to be utilised by visitors and locals alike and it is this proposal, in particular, that caught our attention. This duty-free zone idea is one which has been touted by the private sector for a while now, and it is believed that once executed in the right manner, it can certainly be a boost to the economy.

 

The Minister said this proposal has the capacity to earn foreign exchange from shopping by visitors, but will also save foreign exchange since Barbadians could be encouraged to shop here rather than going overseas. According to the Minister, Government has already identified areas that could possibly become such zones including Bridgetown, Holetown, Hastings/Worthing and at the two main ports of entry, all good choices, but we respectfully suggest that they also consider including Speightstown. Such a move could help to encourage businesses to again choose to set up there and revive that area.

 

Mr. Sinckler said he is hoping that at least Bridgetown will be ready for this business activity before Christmas and he will be setting up a Special Committee to review the initiative and report to him within three months on its findings and recommendations, so that it can be forwarded to the Cabinet for approval. Now, while we would want to have this measure in place prior to or just at the start of the Winter Tourist Season, we must be mindful that such measures have been introduced in other countries and failed. We must therefore ensure that we learn from the mistakes that have been made and build on the successes, so that Barbados can become the best practice for this type of activity, not only in the Caribbean, but the wider world.

 

Creating these zones can definitely become a selling point for destination Barbados and be attractive to both potential cruise and long-stay visitors to these shores. What we must ensure though, is that when it is introduced it is properly marketed, so that visitors frequent the areas and the merchants and the Treasury both benefit.