BUDGET DAY IS HERE!
TODAY is Budget day in Barbados.
This evening at 4 p.m., Minister of Finance and Economic Affairs, Christopher Sinckler, will make his eighth Budgetary presentation that is expected to include measures to bring more stability to the economy, including the momentum for more growth.
The Budgetary proposals are to give meaning to the projections he outlined in the Estimates of Revenue and Expenditure, which has a projected revenue of $2.9 billion and expenditure of $4.5 billion, with a shortfall of $1.5 billion.
In what promises to be a tough balancing act of where to give concessions and other give-a-ways, while also taking a hardline with measures to contain government spending, the Minister will have his work cut out while engaging in some social engineering. He has been working overtime to finalise the Budget and was on the job on Sunday evening.
There is speculation that Sinckler is unlikely to increase taxes, even though there are suggestions in some quarters that personal allowances could be addressed. However, as was pointed out to The Barbados Advocate, Government also has many other things to do, “but do not expect that all will be undertaken with one fell swoop”.
The Budget is coming against the background of a 1.6 per cent economic growth rate in 2016 and two per cent during the first quarter of this year, signalling that the economy is on the mend. Although the decline in the foreign reserves has halted somewhat there is still a fear they need to be stabilised even more.
Sinckler has argued that he wants to see growth of about 2.5 per cent to three per cent as one of the ways to lower the fiscal deficit targeted to reach four per cent of GDP by March next year, and to deal with the country’s overall national debt.
An improved growth rate along with the divestment of the Barbados National Terminal Company Limited will be the perfect fit for attacking the deficit.
Feelings are also running high as to whether the recommendations of the Social Partnership Committees will form the core of the Budgetary measures to correct some of the challenges in the economy, or if some of them will be factored into the presentation.
While those recommendations have not been made public, The Barbados Advocate understands that they are not far removed from many of the suggestions like expenditure cuts, privatisation, wage restraint that have been promoted in order to deal with Barbados’ fiscal policy, debt, and foreign exchange reserve issues.
Earlier this month, the Acting Governor of the Central Bank of Barbados, Cleviston Haynes, said that there is need for further fiscal consolidation. “In this regard, the finalization of planned asset sales is crucial,” Haynes said.
He also suggested that improved tax administration and expenditure cuts are necessary.
In an interview with this newspaper late last month, the Minister said he can accede to the wishes of those making a case for Government to cut expenditure and in particular, transfers and subsidies.
Sinckler indicated that were he to do so it would create considerable disruptions in Barbados, especially among the vulnerable in society. “Tough decisions have to be made and tough decisions will be made, but this will be done in a way that you do not unravel the entire society,” Sinckler said at the time.
It is also expected that the Minister will touch on many of the other issues, including the delay in some projects which are necessary to increase growth and the hold-up with respect to the tax clearance certificates. (JB)