‘TOUGH TIMES AHEAD’
Barbadians should brace themselves for more lay-offs and higher taxes come 2020.Scott Weatherhead, of the People’s Party for Development and Democracy (PdP), sounded this warning yesterday while giving a review of the Central Bank Report issued earlier this week.
Pointing to the International Monetary Fund’s (IMF) requirement that the island meets a six per cent primary balance by the next financial year, he opined that it is “unrealistic” to believe that such a target could be achieved without more austerity measures.
The PdP’s spokesperson said this is especially so when considering the highest growth achieved since 2016 was one per cent.
“But they are saying they will increase it from four per cent to six per cent in the next six months. That is a two per cent increase in six months, but the greatest increase we have seen is one per cent in a year. So how in the name of economic magic do they expect to achieve an additional two per cent in six months, when their greatest efforts and all the financial burden on citizens have only netted one per cent in a year?
“[…] I am sorry, but this is simply not realistic,” he stated.
Speaking to members of the media at the Leader of the Opposition’s office in Parliament, Weatherhead said the only way this would be possible is if government makes substantial cuts in wages and expenses, and increases taxes and other income sources dramatically in the next few months.
He stressed that failure to meet the target of a six per cent primary balance will mean “failure of the IMF-agreed BERT programme, as this is an immovable benchmark under the programme..
“It will also mean failure of the recent debt restructuring agreement, and we will be back to square one. So I expect the government to do everything imaginable to try to meet this target, so citizens should brace for more austerity in the coming months as they try to meet this target. That will mean more lay-offs after Christmas; that will mean more taxes in the new year; and that will mean a further reduction in government spending, which will result in poorer quality of services from institutions like the Queen Elizabeth Hospital, the Barbados Water Authority, the Sanitation Service Authority, the Transport Board, and other government departments. This is because there has been very little reform of these departments under this government, so service will certainly be affected by any further adjustments,” Weatherhead argued.