Economic society head says 2013 budget lacking in important detail

ryanstraughncroppedWhere are the specifics, Mr. Minister of Finance?

And how does Government plan to deal with the millions of dollars it is spending monthly servicing its massive debt?

As far as Barbados Economics Society President, Ryan Straughn, is concerned, these were glaring omissions from Minister of Finance Chris Sinckler’s Financial Statement and Budgetary Proposals delivered this evening in the House of Assembly.

The economist, who said he was “intrigued” by the presentation, also said the reality was that at the end of it all Government’s financial commitments, and hence its spending, would not change over the next six months.

He said he believed too that the Budget failed in another major regard, as it did not give clarity to either the financial markets, or local businesses and households.

“The financial requirements of Government will not change tomorrow, so even though some of the measures sound good over the next six months the overall financing of Government will not change,” Straughn stressed.

“In the context of rapidly falling foreign reserves and requirement for Government finances … what is the plan for reducing not just the debt but the level of debt service required in a revenue constrained environment?

“Taxes are always an easy thing to do for any Government. You can raise them relatively easily, but other than administrative issues with revenue-raising agencies the level of revenue will reflect output in the economy so growth is essential to revenue growth. The $150 million additional revenue will have a downward impact on growth over the period.

“I think that in that context we haven’t focussed sufficiently on reducing the immediate financing requirements of Government,” he added.

Straughn also said that while a freeze on public sector employment might sound good to some, the measure “does not change financing requirements on government” and his message to Sinckler was that simply announcing Government would be slashing subsidies without giving specifics “is wrong”.

“Tomorrow and over the next few weeks the finances of Government will further deteriorate because people will have to adjust to not just new taxation but uncertainty in not specifying certain things,” the BES head predicted. (SC)

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