EXPOSED!

There has been much comment about the call from the Barbados Private Sector Association (BPSA) and the trade unions for dialogue with the Government of Barbados on the matter of the National Social Responsibility Levy (NSRL) and other concerns.
In a wide-ranging speech, the Prime Minister responded to those calls on Sunday, exposing publicly for the first time his experiences and interactions with both parties in recent months. He stated also that he would do nothing to stop the protest march on Monday July 24. 
In the public interest, the Prime Minister’s speech will now be published in two parts. Today we present Part one, with Part two to come on Wednesday July 26, 2017.

Thank you very much Senator Depeiza, the next Member of Parliament for the constituency of Christ Church West, when once a general election is held in Barbados. I want to thank you too Senator Depeiza for the excellent work which you have been doing in the Senate of Barbados to keep Barbadians enlightened and educated on the issues that beat in their breasts from day to day and thank you for preaching as clearly and as convincingly as you do the gospel according to the Democratic Labour Party.

I am very pleased to be here today and I want to thank the Chairman and the members of the Executive of the Christ Church West Constituency Branch and the members of Christ Church West Constituency Branch for once again having me here at their annual luncheon, a successful luncheon every year, always coincides with Soca On The Hill and I have been this consistently for the last seven years and I do no allow anything else to collide with this commitment, very pleased to be here to share this afternoon with you. This year's Christ Church West luncheon though comes at a time of some very intriguing occurrences in Barbados and I am very pleased to be here against that background because I have been observing what has been going on in Barbados. I listen very carefully to the things that are being said and observe very carefully the things that are being done and the things said and the things done remind me yet again, if I needed to be reminded, that in politics battles are never finally won you have to fight them over and over and over again as people in the United States of American who benefited from the Civil Rights Movement and the gains registered around the time of the Civil Rights Movement have realised that these Civil Rights were not to be taken for granted, you have to fight for them every single day because in politics battles are not ever finally won and that's the context within which I want to evaluate what is happening in Barbados today. In the fullness of time, in my time, I will speak directly to Nation on a number of things but I am addressing a party branch occasion here today and I feel myself under a moral compulsion, a political compulsion too, to bring you up to date on events in Barbados on the 23rd day of July 2017.

One of the malcontents at the centre of what is happening in Barbados today, reminded me recently that we just celebrated 50 years of Independence and we had all of these 50th anniversary celebrations, but that that person wanted to let me know that the year 2017 was also the 80th anniversary of the 1937 riots and that I had my celebrations and that they are going to have theirs. And I internalise that warning and I observed what was happening in Barbados. Now the 1937 disturbances broke out on the 26th day of July 1937 today is the 23rd day of July 2017 tomorrow is the 24th day and two days after that would be the 26th so we had the 50th anniversary celebrations already and according to what this malcontent told me there are some other celebrations to come. Now I am not going into any details on that here today because that is best dealt with where it should be dealt with and it is not to be dealt with here at any party branch luncheon. Every body knows that there was a global financial meltdown in the last quarter of the year 2007. Rich countries and poor countries were effected by that global financial meltdown. The countries of the Caribbean were all effected by it. Every single country in the Caribbean today, every single CARICOM country today is under financial and economic pressure, every single one. Those that have oil like Trinidad and Tobago are under pressure. In fact recently, the Prime Minister of Trinidad and Tobago said at one of his/ the people's meetings that he has to give thought to the fact that the Public Service of T & T maybe a bit too burdensome on the finances of the country and he has to look at ways and means to deal with that reality. Guyana, which celebrated 50th years of Independence with Barbados last year has been under pressure for many many many years and the global financial crisis did not help in that regard. Jamaica, with its, and of course Guyana has bauxite, Guyana has timber and Guyana has a fast land area. Guyana is the same size as Great Britain. I have paid a visit to Guyana some time last year, the population of Britain is about 65 million now and Guyana, a country that is the same size of Britain or slightly larger does not have a population of 1 million yet, but they have bauxite they have land area, they have forestry, timber and they are under pressure. Fortunately for them, there has been a great oil find recently and I sincerely hope that that oil find can effect the kind of turnaround which that country has so desperately needed ever since its independence.

Jamaica, has gone through about six or seven IMF programmes since 1980 and is still experiencing profound economic pressure, that pressure made worse by the global financial meltdown of the last quarter of 2007. Guyana, Trinidad and Tobago, Jamaica and Barbados were always regarded as the far more developed countries of the CARICOM and all of them are under pressure. Barbados is has been under enormous pressure ever since the global financial meltdown as well because we have something called a service economy which depends significantly on tourism and on international financial services and international business and therefore a lot of what we are able to achieve here depends on what is happening in the countries on which we depend for tourists and on which we depend for international business and financial services. So the four NDCs in CARICOM are under pressure. The other countries called the LDCs, Grenada, St. Vincent and the Grenadines, Dominica, St. Lucia, St. Kitts, Antigua and so on are all under pressure as well and I have sat as head of Barbados at many recent CARICOM meetings and heard them say, heard their leaders say, that if they were not selling their citizenship, if they were not selling passports, their countries would be basket cases. So, they have citizenship by investment programmes in some cases the persons who are granted citizenship do not even have to come to the country in order to get citizenship or be able to get a passport. But those programme keep them going and allow them to pay their bills from day to day, from week to week, from month to month and so on. I have fought them at CARICOM over those programmes, and the Barbados delegation can confirm all of this because I say to them look, when you grant these people citizenship in your country and Barbados is not a part of the transaction those people become CARICOM citizens and have based on our freedom of movement arrangements the right to come into Barbados when they like and how they like although we don't know them. The most recent case of that according to the advice the security advice which I was given is that two persons from nowhere in the Caribbean but who became CARICOM citizens as a result of those citizenship by investment programmes came to Barbados to go to the American Embassy to get visas. The American Embassy turned down the applications for the visas but the persons involved said no we are not going back to where we came from we have a right to six months stay in Barbados and we what to stay here under our six months stay under the freedom of movement regime. I am not going to call the names of the countries from which they came I will only say this, you have to catch about six or seven different aeroplanes to get to where they came from but that is what is going on in the Caribbean because all of the countries of the Caribbean are under pressure. The English speaking Caribbean, the Dutch speaking Caribbean. Suriname went into an IMF programme and according to my advise failed the IMF exams and of course Haiti has always been under pressure. The Government of Barbados took the position, look this is a critical issue and we have to manage this issue in such a way as to make sure that we protect the households and the businesses of Barbados. Shield the households, and shield the businesses from the worst effects of this crisis. And we said look if you are going to shield the households there is no better way to shield households than by ensuring that you can protect as many of the jobs that people have as possible. So protecting jobs became our primary focus. You have heard all the calls in Barbados from varying quarters for us to solve the problems that we are facing by just cutting the Public Service. Now this is not a new call in the year 2001 a report was written for the previous administration which report said that the Public Service of Barbados was too large by about 10,000 and that the Government should look to reducing the Public Service of Barbados by about 10,000 persons by the year 2010. That did not happen we still have the Public Service bill and we are trying our best as a government as a caring governing, as a government committed to the stability of the households of Barbados to protecting the jobs of public officers in this country. Because when we were told to lay off people we were told that you cannot get the savings you want by laying off maids and messengers you have to go up the ladder and lay off some of the people at the top who earn big salaries and that is when you will get the savings that you want. The Government took a position that is not the route we want to go we want to protect the stability of the households of Barbados and we want to protect the stability of the households of Barbados because the issue we are facing in Barbados today, and you have heard this over and over and over again, is a fiscal deficit issue. We are spending more money than we are earning in Barbados. We have not increased the number of agencies that we have to spend money on. The present government, the government over which I preside and the government over which PM Thompson presided between the year 2008 and the tear 2010 did not create any agencies that are gobbling up more money than was previously the case. The agencies that are gobbling up the money are one that we came and found and we are determine that we want to protect jobs in Barbados but we say that if there is a gap between what we are earning and what we are spending we have to find other ways to makeup that gap. There is a gap between what we are earning and what we are spending not only because we have not been able to reduce our spending on employment the government wage and salaries bill and the government pensions bill are very very high, that is why people call for a reduction in the number of jobs in the Public Service. But one of the other issues that we had to deal with is that is that in the year 2007 before we came to office the Canadian government introduced a budget in which they took certain measures that would effect our international business and financial services sector and those measures took effect from around the year 2011 and if we did not respond to those measures business had already begun to leave Barbados and go and be domiciled elsewhere and a committee was set up to look at the issue and to advise the government and that committee had advised that if we are going to stop businesses from leaving Barbados, businesses in the financial services sector we have to lower the tax rate for the businesses at the top we took that advise businesses stopped leaving but the advice also told us that we would have to make a sacrifice of revenue in the short term. The sacrifice of revenue that we are talking about is that the government has had to give up $200 m per year or more every year for the last six years. Over a billion dollars in tax revenue over the last six years. So we are earning less but still had to maintain the obligations which we came and found.

Now historically when this problem has popped up in the past and it cropped up under the Tom Adams Administration between 1976 and 1986. It cropped up under the Sandiford Administration between 1991 of after around 1991 historically what we have done even though we had revenue problems we decided historically to solve revenue problems by expenditure means in other words even though we are getting fewer taxes we decided rather than trying to deal with the tax issue we will deal with the spending issue so we solve the problem by sending home people or by reducing salaries by 8% and so on and so on. My government took the decision that this time around rather than sending home people that we were going to deal with a revenue problem by revenue means. That is to get more taxes to come in so that we can continue to support the standard of living and the quality of life of our Barbadian population. And that is the context within which at one stage we introduced a municipal solid waste tax about which people marched we also introduced amendments to the Barbados Revenue Authority Act to get people to acknowledge those persons who owe the government taxes to acknowledge that they owe the government taxes and to agree to pay 10 cents out of every dollar in the short term and to enter into arrangements how they are going to pay the remainder and there was a threat to shut down the country over that whereas everybody else gets paid in full the government was saying if you owe me a dollar just pay me 10 cents, agree that you owe me pay me 20 cents and the other 90 cents you owe let us agree how you are going to pay it over time. And the place we nearly shut down over that. The lawyers complained, every body complained ... and then more recently in the year 2016. In the year 2016, the budget of that year we introduced a National Social Responsibility levy charged at 2% on imports into Barbados and on goods manufactured or produced in Barbados and we exempted from that tax any manufacturers or any production that touched the manufacturing sector, the agricultural sector and the tourism sector in their urge and in their remit to earn foreign exchange for Barbados. The tax performed reasonably well, with no major complaints about it and the government decided since the deficit problems were continuing to haunt us and since the Central Bank of Barbados was continuing to have to print money that is, to make up the difference between what we were earning and what we were spending, make up that difference that was left after the banks and the insurance companies and other entities in the financial sector did not contribute as much as was expected the central Bank had to make it up and that’s called printing money but the tax performed reasonably well and we decided to increase the tax not to introduce a new tax. The National Social Responsibility Levy is not a new tax. It was introduced in the year 2016 in the budget of that year and it was only increased in the year 2017 on the 30th day of May this year when Min. of Finance Chris Sinckler introduced his budget. We moved the rate from 2% to 10% in the hope that we could get the revenue . And we wanted the revenue not only to narrow the deficit or to remove it altogether but we wanted the revenue because Public Officers in Barbados had not got a salary increase since the year 2010 and had been working faithfully for the government from then until now. As recently as Friday night, Friday afternoon I started a heads of department meeting at Ilaro Court with my heads of departments PM Office at 2.30 in the afternoon and every single head of department sat down in that meeting until we were finished at nearly 11.00 Friday night. They work faithfully and we agree that they are entitled to some kind of reward for their loyalty for their commitment and to their attachment to the best interest of their Island home Barbados.

Now, so the government increased the rate at which the NSRL was being charged from 2% to 10%, increase it by 8%. Who tell the Government do that. Howls of protest could be heard across the land from the main opposition party and from some people in the Trade Union Movement and in the private sector who they sponsor or who sponsor them and the GOB was being asked to reduce the tax. Now let me make this point very clearly, I want to welcome the members of the media who are here today and I want to make this point very very clearly. Barbados is run and governed by a constitution. That constitution was settled in 1966 when Barbados got its Independence. That constitution guides the Government. Trade Unions are governed by the Trade Union Act and all the other laws that are passed to promote the interest of labour and that allow the Trade Unions to carry out their work without let or hindrance. Companies, companies are governed by the Companies Act, Chapter 308 of the Laws of Barbados and all of the other laws that parliament has passed over time to allow companies to protect and to promote the interest of their shareholders, but the government is sworn to protect the constitution of Barbados which is the highest law in the land a law to which every other law in this country is subject, a law to which every other law in this country is inferior. The constitution is the highest law. Now I say that because I want to remind all of you here and remind Barbadians at a time that I will choose that under the constitution of Barbados the only agency that can determine policy and that has final and principal responsibility for policy is the Cabinet of Barbados section 64 subsection 2 of the Constitution of Barbados makes it explicitly clear that the Cabinet is the principal instrument of policy and is responsible for the general direction and control of affairs in Barbados and is accountable of course to the Parliament of Barbados. So whether you are talking financial policy or social policy or any other kind of policy according to the Constitution of Barbados the Cabinet has principal responsibility for that.

The other point I want to make is this that Parliament the Parliament of Barbados is given power under section 48 of the Constitution, that Constitution to make laws for the peace, order and good government of Barbados. Parliament makes laws for the peace, order and good government of Barbados. So when a Minister of Finance stands up in a Budget it doesn’t matter if the Minister of Finance is Chris Sinckler, or David Thompson or Owen Arthur, or Erskine Sandiford or Richie Haynes, or Tom Adams or Errol Barrow. When ever a Minister of Finance stands up in the Parliament of Barbados and imposes a tax, that tax becomes law from the time he is finished speaking the last sentence and remains as law until within four months or so an actual law is passed under the Provisional Collection of Taxes Act. You are entitled to collect any taxes he imposes until he gets around to bringing a Bill to parliament. That is the constitution of Barbados and that is the PCTA. That is what a budget speech means whether Barrow delivers it Tom Adams delivers it or St. John delivers it, Sir Harold St. John, Erskine Sandiford, Richie Haynes, David Thompson, Owen Arthur or the present Min Chris Sinckler. So once the tax is introduced once the rate was increased we took the decision that since there should be no misunderstanding on the part of businesses or workers or anybody else we would not make the tax effective on the first day of June or at any time in June. We would give a whole month so that we would consult with all of the state holders in the economy explain to them what it intended remove all of their doubts remove all of their anxieties remove all of their fears although they should have no doubts anxieties or fears because the tax was not new it was just an increase in the rate of an existing tax. So we did that. We met with the Private Sector and we met with the Unions. I did not attend the meetings with the private sector I left that to the Ministry of Finance, the Minister of Finance and his staff and the Central Bank people and so on. But I determined that I was going to attend the meeting with the Labour movement. That meeting happened on the 23rd June. That meeting lasted for six hours. Friday 23rd June that meeting lasted for about six hours from about 3 in the afternoon until just after 9 in the night. And we explained why we had to increase the rate. We explained to the labour movement that if we are to be able to pay the increase that they are asking for we have to have the revenue from which to pay it. I chaired the meeting and I said to them look when we pay civil servants we don’t pay civil servants by prayer we pay civil servants with money we don’t pay them with prayer we don’t pay them with wishes, we don’t pay them with hopes we pay them with money and that money has to be earned has to be brought in so that we can pay the Pubic Officers the increase that they are asking for and so we can deal with the other problems that we have. A proposal was then put on the table not by the Government, not by the Government. A proposal was then put on the table by one of the delegate of NUPW. That delegate said PM, OK, we understand you can’t make a decision on salary increases now but after 3 month you should have some idea how the new tax is working would the Government be prepared after the end of September to have a look at giving Public Servants some kind of increase however small that increase may be. I said sure, sure, sure. That proposal did not come from the Government it came from a representative of the delegation, a delegation from the NUPW. We said look there are some issues that have nothing to do with salary, that the Trade Unions can continue to discuss with the Ministry of the Public Service and at the end of September we will look and see how the tax is performing and then once it is performing as we confidently expect it will perform we would be prepared to look at some kind of increase for Public Officers The none salary issues that I was talking about for example one issue has been that for years you could have Public Officers working and working long enough for their pension rights to accrue after 10 years or what ever it is 10 or 12 years, you become qualified to get a pension but if after having been qualified to get a pension you were to run into trouble with the police and get a criminal conviction as a result of some felony you committed during the course of your duty as a public officer even though your pension rights had accrued because you got a criminal conviction you could lose all those pension rights and go home empty handed and the government said look the government has been saying look that is not right if your pension rights accrued and you get into trouble after that you would have to leave the Public Service yes but you should leave with your pension rights intact because the pension rights would have accrued before the commission of the criminal offence. That’s just an example of one of the none salary issues that we were talking about and on which the government is convinced and which the government was prepared to concede with the Trade Unions. But there are other none salary issues for example if a post gets abolished, if a post gets abolished when you are aged 30 should you have to wait until age 65 to start to get your pension? These are the kind of issues, that, the none salary issues that we were talking about. But we said look at the end of September when we see how the tax is performing as long as it is performing in accordance with our cherished expectations we would be prepared to look at the issue of a salary increase. And I left the meeting, I told the Min of Finance look the Press waiting downstairs, go downstairs and just let the Press known where we are on this issue, the Unions would speak to the Press as well but I think we have make some progress on this issue. At least everybody understands that we need to get the revenue in order to pay salary increases but certainly also to narrow the fiscal deficit.
You have heard, I believe, that you are hearing all of this for the first time. You would not believe that this happened in the presence of the Minister of Finance, the director of Finance and Economic Affairs.

( To be Continued...)