Prime Minister and Minister of Finance, Economic Affairs and Investment, Mia Mottley, making her way into Parliament yesterday.
PRIME Minister and Minister of Finance, Economic Affairs and Investment Mia Mottley yesterday launched what she said is the Barbados Economic Recovery and Transformation Plan, which will see a surplus of $182 million or 1.8 per cent of GDP by March next year.
The measures, which will see a mix of tax increases, tax reductions and removing some state bodies from off the Consolidated Fund, are aimed also at putting the country’s economy back on course.
Stating that the burden of the transformation will be shared by both workers, and owners of capital, Ms. Mottley admitted however that the measures will impact Barbadians, some of whom will need extra support.
“I also announce today a temporary increase in our poverty alleviation and welfare initiatives to the tune of $5 million,” she said.
She told the House of Assembly that there will be a lowering of Government’s recurring expenditure by at least $23 million by March next year. New capital expenditure for this year will be $134.5 million, and net revenue of $150 million.
The plan will be done in three phases, the first of which will be executed within the first three months of the new government.
It focuses on the imposition of user fees on domestic and international players to take three Statutory Corporations completely off and another partially off the Consolidated Fund. According to her, this will account for a reduction in expenditure of almost $215 million in a full fiscal year. The three corporations are the Barbados Tourism Marketing Incorporated and the Barbados Tourism Product Authority – $96.3 million; Sanitation Service Authority – $65 million; and a $50 million contribution to the Queen Elizabeth Hospital.
She promised that Phase One will also deal with a review of Barbados’ tax system to impose more effective taxes, increase compliance, and broaden the base between domestic and visitors to Barbados.
Phase Two (months three to 12 months) will focus on expenditure reduction through a review and analysis of government and state-owned enterprises focusing on the merger of potentially affiliated entities such as corporate Affairs and the Financial Services Commission, both of which receive subventions from government.
Phase Three will see a continuation of all remaining state enterprises and departments of Government. “We will determine what expenditure is essential, what is highly desirable and what is optional,” she said. Saying that Phases Two and Three will generate a further $200 million of additional revenues and expenditures, Ms Mottley said the net ‘impact of this mini-budget is to reduce the fiscal deficit in a full year by $182 million.’” (JB)