Minister of Finance Chris Sinckler is promising that a full update will be given shortly on the island’s economic situation.
This as rigorous efforts continue to bring down the country’s worrying deficit, which rose as high as 12 per cent of GDP last year.
Ahead of that detailed national update, Sinckler has told Barbados TODAY that the Government’s fiscal consolidation programme remains on track.
He also assured that all of the tax measures introduced since August 2013 under the 19-month programme were performing according to plan. This includes the controversial Municipal Solid Waste Tax that was implemented back in June amid widespread public protests.
Since then, tempers have cooled somewhat over the issue with Sinckler reporting that up to August, payments were trending exactly as expected.
In the face of ongoing concerns about the island’s economic performance, the Minister is urging calm while assuring that there is absolutely no need for panic at this stage.
“We have set a course. People seem to think that when you set a course that everything runs in a straight line. Everything does not run in a straight line! You’re going to have ups and downs, achievements and setbacks. But you can’t throw your sweaty nightcap in the air and panic and totally lose it and say, ‘everything is going bad, let’s go to the IMF’ as though the IMF has some panacea up there waiting. That’s not how you run the system.
“You have to be confident in what you are doing. You have to know that challenges are going to pop up in this type of situation, it’s inevitable. But you deal with them as they come and you try to find the most responsible way of ensuring that you get to achieve what you have set out to achieve”.
At the start of the 19-month programme, he said there were things that had to be brought on board that caught the Government off guard and led to a “ballooning” of the deficit.
“We got hit very hard and were judged very harshly for it, but, in my view, it’s better to know what the worst case scenario is, and then deal with it from there. So we have been working on this thing consistently, I mean really nuts and bolts working on it,” he said.
Government also faced challenges in reducing its expenditure and “weaning people off” of spending.
“Perhaps people, who are not as close to the situation as some of us are, don’t understand it; they feel that it can just be easily done. You are hearing the public saying, ‘oh, we want expenditure cuts, Government has to reduce its costs, Government has to do this and do that’. Of course, when you start to do them, the pain kicks in, because these things are never painless. Then people will say ‘Why the Government had to do this? And why you had to stop paying for the students at UWI? Why do you have to increase fees at QEH?’ But all of these things go towards making up expenditure and making up the challenge fiscally. So you have to really maintain poise in the situation,” he added.
Howewer, he said much has been learnt from the experience.