EDITORIAL - Pushing growth

THIS week’s Annual Budgetary and Financial Proposals created the usual fanfare, received some praise and critiques as well. 

 

At the end of the day, Government presented some measures for a template which it maintained will advance a growth path. This is tempered by the reality of sluggish overall economic growth and productive sectors which have yet to return to their full earning capacity.

 

Tourism continues to lead the way. Tourist arrivals are up as this island continues to enjoy an attractive status among the major source markets.   We continue to see thousands of visitors on our beaches and notice them moving around the island. We expect that we will continue to provide a safe and secure environment for all who live and visit this beautiful country.

 

International business continues to hold its own.  Barbados, with its strict regulatory framework, provides significant protection for investment and business, and we expect Government to continue to strengthen this environment through legislative enhancements to existing laws, or the creation of new instruments to provide support.  

 

One of the more controversial measures included in this year’s Budget included the introduction of a National Social Responsibility Levy, which takes effect from September 1. This will be  introduced at a rate of two per cent on all imports into Barbados, to assist in offsetting the costs associated with financing public health care service provision.

 

The primary concern raised, quite correctly, involves the potential effect of increased costs to the consumer on those products which attract the levy. The issue would be on potential mark-ups on products even before the Value Added Tax is added.  This could mean prices will jump in anticipation of the levy and for families on a fixed income, the challenge of maintaining a healthy lifestyle is under risk.

 

Government must explain how the twin messages work. On one hand, the country is asked to take personal responsibility to tackle NCDs, but now have to work on paying more for certain items.  The point was made by Minister of Finance and Economic Affairs, Christopher Sinckler, that the levy would be applied with the “exception of goods for the manufacturing, agriculture and tourism sectors, as covered under existing primary legislation such as the Fiscal Incentives Act and the Tourism Development Act”.

 

It would make more sense if Government also issues of the review of the Basket of Goods and includes items which would attract no VAT, as a way of cushioning the impact which the levy will have on consumers.  

 

We applaud the creation of the $50 million special fund to provide a blend of grants and soft loans to fund existing small and medium sized businesses and business start-ups. The Small Business Association has called for this solution for a very long time and this injection of funds is timely.  

 

The debushing campaign is also welcome. Too many areas of this country are in serious need of cleaning. Unkempt lots and areas which attract rodents and the resulting diseases must be tackled.  

 

No Budget is perfect. The true test comes in the implementation of the measures on the economy.   

 

Too often, however, many of our leaders argue about macro-economic policies while not often speaking to the kitchen table issues which impact ordinary citizens. That is the true test of any economic policy, so we shall wait and see.