This year’s Budgetary Proposals have been described by Minister of Finance, Christopher Sinckler, as the “appropriate set of measures” based on the challenges and opportunities facing Barbados.
According to Mr. Sinckler, Government has set very clear objectives, as was done in previous financial instruments, whether in the budget or estimates. Acknowledging that the country’s deficit was still too high, he stressed, however, that considerable work had been done to bring it down to just under six per cent of GDP.
He continued: “So we need to bring the deficit down to a target that is closer to the rate of economic growth in the country. It is challenging, you can’t say it is an easy task, but it is achievable and what we try to do … is consolidate our deficit, bring it down in a way that is sustainable, manageable and palatable for the country….
“We do not accept in some instances the view expressed by some agencies, including the IMF, that we should try to bring that deficit down at the fastest possible speed. We believe that the level of social and economic dislocation would be a bit too much in the type of society that we have – a small open society as it is.”
Mr. Sinckler noted that Government’s goal was to reduce the deficit over the next three years to about two to 2.5 per cent. “At the same time,” he added, “we will implement measures to assist us in growing our economy and bringing it up from the present annualized rate of 1.3 per cent to around two to 2.5 per cent.”
He stressed that if Government got the balance between the level of deficit and the level of economic growth, there would be no need to borrow extra money to do certain things because the economy would be growing at the same level or faster than the rate of debt being incurred.
The Minister stressed, however, that sometimes plans had to be adjusted because of situations that arose. “You are dealing for the most part with factors, some external to us over which we have no control; some domestic, which we do have control over; and some we don’t have control over. What you do is ensure you manage the situation in a way that allows you to achieve your objectives. From that perspective, we believe the budget is appropriate to the circumstances and that it would allow us to achieve our targets,” he reiterated.
In this year’s budget, Mr. Sinckler announced that Government would continue the Bank Asset Tax and move the rate from 0.2 per cent to 0.35 per cent. He acknowledged that the financial institutions were currently contributing to the financial stability of the country by, among other things, paying corporation tax.
The Finance Minister said, however, that there was a need for them to assist a little more, especially since adjustment must be a shared experience and everybody must contribute.
During the wide-ranging interview with the Barbados Government Information Service, Mr. Sinckler weighed in on the discussion about the outstanding money owed to the Student Revolving Loan Fund by delinquent borrowers. He said the situation was very unfortunate, especially since it was denying persons the opportunity to pursue a course of study and also destroying the spirit of the Fund.
“It is revolving so it is supposed to be money going out, money coming back in with a little interest, then they invest some of that interest in bonds and other things; it makes additional money so you can expand….
“Agencies, particularly those in Government, do not like…to be hounding people down; to be putting them in court; to be printing their names in the paper; et cetera. The Student Revolving Loan Fund unfortunately has had to go to those extremes, which I think is a little unfortunate. I am sure they would prefer not to have to do that. And that will continue; they are going to have to be a little bit more vigorous than they want to be. But at the end of the day it is conscience; it is the conscience of the one who borrows,” he stated.
However, he noted that Government could not throw its hands in the air in exasperation, but rather, would have to replenish the Fund in the interim. He stressed, however, that the Fund would have to be more vigorous, employing all the tools at its disposal, even to the discomfort of some of the borrowers.
As Barbadians continue to pay keen interest in reports coming out of the Central Bank and elsewhere on the economy, the Minister’s message is that Barbados is making progress.
“It has not been easy, it has been tough. We have had to do some fairly stringent measures; they have hurt and caused discomfiture among the population,” he noted.
Mr. Sinckler thanked the public of Barbados sincerely for the patience shown through the difficult times, saying some countries were still struggling to make it out of the recession, with many having varying levels of success and others with no success at all.
“We believe we have had some successes; we have completed nearly half to three quarters of this course. There is some more way to go. We cannot lay down the arms now. Yes, feet may be weary, yes, pockets may be hurting but we can complete this job and bring Barbados back to full economic health. We believe that we are well on our way to achieving that,” he stated.
He said Government’s objective was to make Barbados the best country in the world to live, work and have leisure.
As citizens of this country, we have made the necessary sacrifices and “green shoots” are being seen in the economy following the prolonged global recession which seriously affected our island. There is light at the end of the tunnel, so let us keep our hands to the plough, knowing that our reaping days are ahead.