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Cut the waste, Govt told

The Freundel Stuart administration is being told to continue to focus on cutting its spending if it is to realize positive changes in the local debt and fiscal deficit situation.

This advice has come from economist Ryan Straughn, who told Barbados TODAY that pension reform was also needed.

Straughn’s comments came in the wake of a call from Minister of Finance Chris Sinckler yesterday to rich countries to grant struggling Caribbean nations “no less favour than that which was given to the HIPC [Highly Indebted Poor Countries] during the 1990’s”.

Sicnkler acknowledged that Barbados and the rest of the region continued to struggle with their debt.

Government debt rose to about 101 per cent of GDP at the end of March this year.

Ryan Straughn

Ryan Straughn

“We need to stop spending. That is what we need to do. We need to stop wasting the money. As a matter of fact, we just had a discussion in Parliament regarding the building of [accommodation] for police officers using money from the NIS,” said Straughn.

In Parliament on Tuesday the Government got approval to borrow $76 million from the National Insurance Scheme (NIS) for refurbishment and constructing new accommodation for members of the Royal Barbados Police Force (RBPF) and the magistracy over the next two years.

Asked if he believed Barbados could qualify for debt relief, Straughn said he was not sure the country fell into that bracket, given that a lot of its debt was domestic. He said this could impact the NIS and other programmes, including Government bonds.

However, he said countries such as St Kitts, Grenada and Haiti would perhaps be at the forefront for debt relief because they were heavily impacted by natural disasters and had to borrow internationally to rebuild.

“There is some level of legitimacy on that front. I don’t think we are in that same position. Any debt we have is strictly of our own making. So I am not convinced that debt relief . . . without fundamental changes in the way monies are spent in Government would not necessary yield the right results for us,” explained Straughn.

In June Governor of the Central Bank Dr DeLisle Worrell reported that during the first three months of the fiscal year 2015/2016 total expenditure fell by approximately $4 million. Spending on goods and services decreased by $14 million, and wages and salaries fell by $2 million.

There was no increase in transfers to public institutions, while interest payments and outlays on capital expenditure grew by an estimated $8 million and $12 million respectively. Total revenue was lowered by $33 million.

Acknowledging that the administration had already “seemingly started dealing with transfers and subsidies”, Straughn said Government should also keep a check on its spending on goods and services, as well as wages and salaries.

“The fundamental thing is the spending of Government and what they are spending on, the size of Government and the efficiency of Government need to be corrected.”

In terms of pension reform the economist suggested that was an area where public servants would have to contribute directly to their own pensions.

“I guess like . . . in the private sector, depending on how it is set up, some encourage voluntary contribution whereas some [make]it is mandatory. Some pension reforms will have to be put in place for public servants in order to reduce the spending going forward,” said Straughn.

He also noted that Government needed to employ greater use of technology in order to become more efficient while opening up opportunities for private enterprises to offer goods and services to the Government.

4 Responses to Cut the waste, Govt told

  1. harry turnover August 14, 2015 at 7:25 am

    Yes,let todays’ Public Servants contribute to their own pension ,and while you are at it,reduce the 21 days uncertified sick leave that they are currently ENJOYING,or let their gratuity and or pension be calculated on the amount of uncertified sick leave taken during their tenure.
    I have worked in the Civil Service for over 40 years and have NEVER taken no more than 5 uncertified sick days in any one year, and some years I didn’t take any at all…but during that time some of the younger employees would take those 21 days EVERY year.

  2. Alex Alleyne August 14, 2015 at 9:06 am

    The Unions should have a pension set up for all their members and not only their staff. The members should make a strong case for this in these trying times seeing that the government is cutting everything .
    Why don’t the powers that be TAX the churches and make them sell off some of the land to the poor at a very low price per square foot.

  3. Kevin August 14, 2015 at 9:32 am

    Everyone knows what ‘cut spending’ means. So much locally owned business depend on government spending. So much people depend on government jobs. Then when government actually takes the decision to ‘cut spending’, you would hear a hue and cry.

  4. jrsmith August 14, 2015 at 2:47 pm

    Dear Mr, Sinclair, who is to be blame for the Caribbean nations screw up, in the 1990’s , now 25 years later out comes the begging bowl. who is to be blame this time.
    As I said before ,black people love talking history, but has nothing to offer to or for the future.


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