Do we estimate an economy on the mend?
What is arguably the most important debate on the parliamentary calendar opens on Monday morning in the Barbados House of Assembly. This year, the week-long Estimates Debate examining how much Government plans
to spend, and expects to earn during the coming financial year, takes on added significance.
It comes against the backdrop of what Government and certain private sector interests say are encouraging signs the recession-ravished economy is finally turning the corner to recovery. For the broad masses of Barbadians who have been adversely affected in various ways by the protracted downturn of the past six years, this is undoubtedly welcome news.
However, caution is still the watchword, for, as Minister of Finance and Economic Affairs Chris Sinckler told reporters today, there are significant challenges that remain, and the country is not yet out of the woods.
The biggest challenge facing the Freundel Stuart administration relates to the high fiscal deficit which has to be brought down to a manageable level ––
below five per cent of gross domestic product (GDP) –– in the interest of economic stability.
Significant headway has already been made towards bridging this financing gap. Mr Sinckler has reported success in lowering the deficit to around seven per cent of GDP from 12 per cent last year.
It was achieved, however, at a significant social cost: shedding 3,000 public sector jobs, ending the long-standing policy of free university education, and other spending cuts that have affected social services, including health care.
In the circumstances, and especially since Mr Sinckler has put the country on notice that more stabilization measures are required, it is unlikely that taxpayers will benefit from any immediate reduction of the heavier burden which they have had to shoulder in recent years, through impositions like the Consolidation Tax, a 2.5 per cent hike in the Value Added Tax (VAT) and the new Municipal Solid Waste Tax.
The Estimates Debate will provide a clear picture of Government’s priorities during the coming financial year, as proposed allocations from the Consolidated Fund to the various ministries, departments and agencies will come under the scrutiny of the House of Assembly. It will also provide insights into how the Government proposes to press ahead towards the objective of bringing down the deficit to below five per cent.
The Freundel Stuart Government has received considerable criticism over its management of the economy. A seeming reluctance to engage stakeholders and the general public on key issues in a timely fashion, as well as a noticeable pattern of delays in delivering on promises and commitments, have contributed to an erosion of public confidence and caused considerable damage to the Government’s credibility.
As a result, the Government faces a believability problem to which several broken promises undoubtedly have also been a contributing factor. Many Barbadians, therefore, are finding it difficult to take the Government’s word seriously. These challenges, no doubt, will have an adverse impact on public receptivity towards what the Government has to say on the economy at this stage.
The Opposition Barbados Labour Party (BLP), as the official watchdog of the Government, has a particularly crucial role to play during the upcoming Estimates Debate. Fresh from a near two-month boycott of House of Assembly sittings over an issue involving Speaker Michael Carrington, the Opposition must use the occasion to offer an insightful critique that enables Barbadians to form a balanced picture of the state of the economy, especially as it relates to their own prospects, when weighed against what the Government will have to say.
In the current 2014-2015 financial year, which ends in another two weeks, the House of Assembly had approved an expenditure of $1.6 billion, down from $1.7 in the previous year. Up to the time of the writing of this Editorial, the Government had not yet released spending figures for 2015-2016. However, based on the downward trend of the past two years, it is anticipated that spending again will show a decline.
It is hoped that the Estimates Debate will be of a high standard, and that the challenges and options facing Barbados will be thoroughly examined, so that the average Barbadian can be enlightened and empowered to make wise choices that can contribute to an improved and stronger economy, going forward.
An improved and stronger economy is in everyone’s best interest!