Government too bent on fiscal adjustment, warns Arthur
Former Prime Minister Owen Arthur is telling Government it needs to be careful not to put too much emphasis on fiscal adjustment.
He warned today that continuous modification of taxes and expenditure could have contradictory implications for growth.
However, the Independent MP said it was “sensible” of the Minister of Finance Chris Sincker to be cautious about the country’s economic recovery.
“The more recent information we’ve seen indicates that the economy would have fallen since 2008 by as much as over 27 per cent. So a one or two per cent growth does not restore the economy. The economy is not yet vibrant or viable but it obviously is bottoming out and I suppose that the Government is going to claim credit for that,” he stated.
The former Minister of Finance however cautioned Sinckler that he could create confusion with his announcement of an April 2015 budget.
He pointed out that the Finance Administration and Audit Act, introduced in 2007, clearly stated that the annual budget should be presented in March every year.
However, in his speech Sinckler said he had deferred the budget until April.
“Therefore, he [Sinckler] might have inadvertently sown the seeds of future confusion by not being aware that there is a 2007 Act that makes provision now for one budget debate in March so I hope they get that right and that next year what we have to discuss would be as the law now prescribes,” Arthur added.
He also said Government needs to make a decision soon on its relationship with the International Monetary Fund (IMF).
Arthur told Barbados TODAY that the Freundel Stuart administration was sending mixed signals by using the IMF’s “menu of policies”, while stating it was not accessing financing from the Fund.
“I can’t advise Government of what to do but . . . generally, countries that follow IMF policies have access to IMF financing and you put yourself in no man’s land if you’re following IMF policies but don’t access IMF financing so the Government sooner or later would have to make a strategic decision as to exactly what it is doing,” he said.
Arthur, the Member of Parliament for St Peter, was speaking on the heels of today’s presentation of a ministerial statement by Minister of Finance Chris Sinckler.