Mottley raises areas of concern

Leader of the Opposition, Mia Mottley is appalled that Government did not utilise the Industrial Credit Fund to its fullest potential.

 

Responding earlier this week in the House of Assembly to the 2016 Financial Statement and Budgetary Proposals, she expressed concern about funds that have been set up over the years, but have not been getting to the intended beneficiaries.

 

“I cannot believe that this Government has left an Industrial Credit Fund with $130 million and waited until the eighth year to extend support to the business sector of the small business community, having not delivered on the 40 per cent procurement, having now delivered on so many other promises, and having capital sitting down there. But you know what the truth was Sir? That a lot of that money was being taken up to hold Government paper and Treasury Bills etc and that is why it was not available to be able to help businessmen in this country create and expand their businesses,” she said.

 

Her comments came as she also expressed concern that the extension of Government’s home grown economic programme, has not improved the situation with the country’s economy. She contended that all the debt measurement, the deficit and the foreign exchange reserves remain at unacceptable levels.

 

“When I tell you that the Budget did not address Central Bank financing yesterday [Tuesday], it also did not address the arrears, it also did not address appropriately and fundamentally the reprofiling or refinancing of our debt,” she said.

 

With that in mind, she maintained that the fundamental problem facing the Barbados economy is that we have had fiscal deficits that have surpassed the expected levels. Mottley said other than financial year 2011-2012, the fiscal deficit has been on or about seven percent. She made the point as she also raised the alarm about the Central Bank and the National Insurance Department being the major holders of government paper.

 

“The only ready buyers for government paper are the Central Bank and the National Insurance Scheme upon direction. It is true that we have developed and seen developed by this Government, a novel third option for financing the deficit – the arrears. If I don’t pay you what I owe you, then I don’t have to find money to finance the liability. And so endemic and chronic has this become that the private sector has now come up with a phrase for it, they call it hostile financing,” she said.

 

The Opposition Leader added, “And they are already quaking in their boots today, because the additional announcement of $50 million in cuts from statutory boards, they are not sure whether they are going to have their bills paid at the end or not.”

 

Her comments came as she said that there are many persons who are concerned about the impact that printing money will have on the reserves, and she lamented that while Government looked to address the issue of the foreign reserves, it did so without looking at the issue of the printing of money.

 

“All of us know Sir, that if you create extra credit, if you print money without having the foreign exchange to support it, it will have an impact on draining your foreign exchange because you cannot have it supported by foreign exchange that is earned or borrowed or available to support the expenditure of increased credit. So we’re just playing with fire,” she maintained.

 

The Opposition Leader charged that it is unacceptable that Finance Minister, Christopher Sinckler failed to address these issues in his Budget. (JRT)