Devalued!

Govt accused of virtually reducing the value of the Barbados dollar

The dreaded ‘d’ word – devaluation – was floated again tonight as Minister of Finance Chris Sinckler’s 2017 Financial Statement and Budgetary Proposals came under immediate scrutiny from economists, Opposition politicians and a consumer rights advocate.

Noted economist Jeremy Stephen said the decision to raise the National Social Responsibility Levy to ten per cent from two per cent when it was introduced last year, and the introduction of a two per cent tax on foreign exchange transactions were akin to devaluing the Barbados dollar.

Still Stephen was pleased with the proposal to cut Government expenditure by ten per cent and plans to divest the Barbados Hilton Resort, in a sale estimated to rake in $100 million.

The economist’s suggestion of devaluation was shared by Chairman of the Tax Committee of the Institute of Chartered Accountants of Barbados (ICAB) Wayne Lovell, who also saw the tax measures as a form of devaluation, even as he commended Government for cutting expenditure in order to close the deficit.

However, some of the most stinging criticisms of the financial plan came from Opposition Barbados Labour Party (BLP) parliamentarian Kerrie Symmonds, who saw it as a means to retard the country.

“The concern that the Barbados Labour Party has is that over the last nine years the Government of Barbados raised $340 million in new taxes. This evening alone, this minister has indicated an intention of raising $480 million in new taxes. That is one and a half times more than the imposition inflicted on the people of Barbados, which we endured over the last nine years. So this Budget is guaranteed to have a contractionary and recessionary effect,” Symmonds said, adding that consumers were once again being beaten up.

The Opposition parliamentarian said Barbados was trapped in high debt and a stagnant economy because the minister preferred to tax the people rather than deal with the fundamental problem.

Like Symmonds, Director General of the Barbados Consumers Research Organization Inc Malcolm Gibbs-Taitt left no doubt how he felt about the Budget, saying it was clear Government had joined with the private sector in attacking “the little income” that Barbadians had.

“Through this Budget, the Government has taken from the poor and given to someone else,” the consumers’ spokesman said.

“If you keep taxing and taxing and taking and taking from people, how are people going to spend?” he asked.

However, the umbrella trade union body struck a more understanding tone, even as its leader and its largest public sector member expressed concern about the impact of rising prices on members.

President of the Congress of Trade Unions and Staff Associations of Barbados Cedric Murrell said he was pleased that the minister had not gone the route of large scale layoffs, a sentiment shared by Akanni McDowall, the President of the National Union of Public Workers.

Murrell said while it was important to keep people at work, increased taxes would make it difficult for them to get by.

“Clearly, the [ten per cent increase in the National Social Responsibility Levy] will mean that persons’ disposable income will be reduced, but one understands that the deficit has to be addressed and the Government has chosen to address the deficit more on the revenue side, than the expenditure side,” Murrell said.

While commending Government for pushing for a balanced budget, the CTUSAB leader had reservations about its success.

Meantime, McDowall expressed disappointment with the financial plan, despite Government’s pledge to protect jobs.

“The good [thing about the Budget] is that he [Sinckler] did not explicitly say that public servants would be laid off. And I think that the private sector has been calling for wages and salaries to be cut . . . and the minister has sort of defended the number of public servants that are currently employed by the Government.

“[However], public servants would be worse off tomorrow than they are today because what the minister would have effectively done, was to increase the taxes which public servants currently pay by increasing the National Social Responsibility Levy  . . . and by also increasing the cost of gasoline and diesel,” the union leader pointed out.

McDowall said this gave the NUPW even more reason to push for pay rises for public servants.   

emmanueljoseph@barbadostoday.bb

26 Responses to Devalued!

  1. Tony Webster May 31, 2017 at 2:29 am

    It’s a blessing that so many competent, patriotic, honest and visionary sons of daughters of the soil, who built this country both pre and post independence, are safely resting, rather than have to view this monumental mess some super-human will have to clean up. Those cherished and respected few who yet remain with is, are surely not enjoying the spectacle , and must must be saddened beyond measure.

    Verily, each and every ballot, is a double-edged sword, capable of doing both ood, and also of causing chronic socio-economic misery on us all. “Collective responsibility”, is not a concept reserved for cabinet government: it equally….perhaps moreso…aptly defines that precious right -and duty- which rests upon each citizen casting his/ her vote.

    We get EXACTLY the government we deserve!

    Reply
    • Jennifer May 31, 2017 at 3:49 am

      Laud, look how dah elephant tie down with dah string of cotton, receiving much pain. Isolation and consolidation is clearly necessary to fight this disease. Solutions Barbados where is your rebuttal?? or are you supporting this disease process?? Had we envisage such a disease>>>>> And we clearly don’t have much Salicylates to choose from at all.

      Reply
      • Peter May 31, 2017 at 9:23 am

        BT comments readers never mind Jennifer (the Jackass) She’s a lonely , dysfunctional rejected and resented uneducated unqualified idiot who returned from working at the bottom of the labour chain, sounding like a Limey, or trying to only to impress Bajans. She writes only in Parables. She hates whit people because she worked for them and thinks she should look white. she dislikes blacks especially the highly successful ones whom she describes as crabs in a barrel. Poor thing, she was born that way, She can’t help it.

        Reply
    • Peppa May 31, 2017 at 8:49 am

      Yes we do. How are those free ipads and computers working for people now?

      Reply
  2. Samantha Best May 31, 2017 at 5:11 am

    Just as in 1986 when Richie Haynes had an “alternative budget” I am eagerly looking forward to Ms. Mottley’s alternative budget this afternoon.

    The country needs to know what the BLP’s plan is to revive the economy. Ms. Mottley please do not only come with a criticism! You are eager for an opportunity to run the country so come with a plan.

    There is a need for choices in order for effective decisions to be made. Over to you Ms. Mottley.

    Reply
    • Jennifer May 31, 2017 at 5:31 am

      Samantha well stated. I believe that all of them in the big house is the same pot of pumpkin but, while she is at it she should leave out any emotional antics. Being emotional and feminine makes one look weak and not taken seriously. We got too much flies in the ointment already.

      Reply
    • Peter May 31, 2017 at 9:02 am

      Samantha, That’s exactly what I called for I would love for Mia to show this nation an alternative that is better.

      Reply
  3. Caroline Eastmond
    Caroline Eastmond May 31, 2017 at 5:42 am

    It has already been done just not in so many words

    Reply
  4. Carson C Cadogan May 31, 2017 at 6:41 am

    All BLP operatives.

    What more do you expect from them?

    Reply
  5. hcalndre May 31, 2017 at 6:51 am

    Listen for the yard fowls and apologist this morning on CBC, the host, miss undecided and the commissioner are a few that will be giving thumbs up to MOF for the budget and that the taxpayers should be grateful of.

    Reply
    • Peter May 31, 2017 at 9:13 am

      andre hcal, Carson C Cadogan, the commissioner and Mis undecided aka Carolita and of course Modweator Holder knows who gives them back up money and subtle gifts for their support. They rely on those things. as for Maureen, she is working hard on becoming either a Senator or an overseas Ambassador in either England , Toronto or any city of the USA. They CAN’T do better but hide and throw stones.

      Reply
      • hcalndre May 31, 2017 at 6:07 pm

        Hello Peter, early this morning I forecast that the host at CBC would have praised the budget with some other apologists and yard fowls, the trinibajan, I did not forgot her but she was one of the “others” I referred to.

        Reply
  6. Sisleen Greene May 31, 2017 at 7:14 am

    The opposition as David Thompson said some yrs. ago cannot give the ruling party a.k.a The Government any advice or solution which they will acknowledge. We must realise that this set of Duncy Egotistical Mean Snakes(DEMS) are only about suppressing itheir Citizens while tiefing however they can to feather their nests.
    They are incapable when it comes to being creative in thoughts and action to guide this nation out of the cess pit which they have developed.

    Reply
  7. Greengiant May 31, 2017 at 7:40 am

    Yes @Carson Cadogan they’re all BLP operatives, but you are an operative of the DLP, and i’m an operative of the people. So in fact we are all operatives. What’s wrong with that?

    What the people need to know is that every country where Vat tax is applied has effectively applied an internal or local devaluation to what their workers earn, and what visitors bring into the country. Now there is need to import essential items, but Barbadians are still importing like space cadets. They are also companies here promoting online shopping, so yes I agree tax foreign exchange transactions, and credit card transactions related to foreign exchange. If you want to over indulge, import cheaper rather than spend local, yet calling on government to maintain employment then pay the taxes for your habits.

    I have a friend, a temporary government employee who owes the credit union over 30,000.00, doesn’t own a house or land, but for the past nine years or so shops in NYC every year just because she can. It probably makes her look bigger and better than her neighbors in the city where she resides. She alone spends about US $ 6000.00 per year on this venture. I helped her to start a small business, that now earns her about $ 1000.00 per month and showed her a plan where she could pay of her credit union dept and move on to acquiring her own home. She said she liked the plan, but she going to NYC this year for the last time because she had planned it before. Funny thing she’s always having a lime by her, inviting everyone to come eat, drink and be merry. Feeding her ego. If she loses her job tomorrow morning she’s in deep problems, but she’s taking the risk simply for a lifestyle. Thousands of our people does this same thing every year, yet they and the opposition complain when the government takes steps to protect the foreign exchange.

    What’s wrong with controlling your spending to the point where you reduce your utility cost through better managing systems, and spend on essential items only, making sure you have your needs. Eat from the local vendors market at cheapside, the fish market or processors, the butcher stalls for meat. Reduce your food bill by eating better. These changes will increase your disposable income, they have worked for me. However, like my friend, many of you will complain because you have taken the people’s loans, and credit cards when you didn’t need to, now you have problems because you have too many payments to make and you salary after deductions scares you.

    My advice, sort it out and learn from the experience. It’s not the fault of this or any government though. Take responsibility for you own issues.

    Reply
  8. seagul May 31, 2017 at 8:08 am

    If Barbados escape the colonial trade system by reducing dependence on foreign capital, technology and material goods it could become truly independent…It is clear that we must find a Barbadian solution to our problems, and that this can only be found in Bajan unity. Divided we are weak.

    Reply
  9. Saga Boy May 31, 2017 at 8:09 am

    @Tony Webster. What would you have done? Give me a few suggestions instead of the criticism.

    Reply
  10. Peter May 31, 2017 at 9:28 am

    So Saga Boy, write and post YOUR proposal.. either that or grab your balls ans squeal like Michael Jackson or Prince. I will inform you that Tony Web is an Intelligent man who can teach you everything you need to know but is too dumb to ask.

    Reply
  11. seagul May 31, 2017 at 9:41 am

    @Saga Boy–Yes we need suggestions instead of colonial pumpkin eaters and dividers. Intelligent docile monkeys–your time is up.

    Reply
  12. Mack May 31, 2017 at 9:52 am

    Something is very wrong with this budget. Barbados has billions of dollars of high end real estate, owned by very wealthy people who could pay taxes with no problem. Here it is that most of these taxes are directed to the poor and those who has no more money to pay taxes or even buy a decent meal. Why can we get some taxes from those who can pay it????

    Reply
  13. Milli Watt May 31, 2017 at 10:08 am

    time to pay what you owe boys and girls……….you prefer the IMF devalue the dollar

    Reply
  14. Barry May 31, 2017 at 10:17 am

    If Government Ministers were less interested in their own “nest feathering” and more committed to this country on a whole, they would be open to any and all suggestions from Public and Private personalities alike. Rather than take a suggestion that didn’t come from you as an insult or dismiss it as rhetoric, allow a forum for suggestions from everyone in Barbados to be discussed and either accepted as potentially useful, or dismissed as infeasible or impractical. But, at least allow the process to determine the worth of the suggestion on its own merit, rather than having it immediately disregarded because of its origin. I will start the ball rolling;

    1. Allow ALL business in Barbados which are VAT registered (including big value items like cars and houses), to accept payment for goods and services in Foreign Currencies in exchange for not charging their customers VAT. All Foreign Exchange sales must be recorded on their VAT return, and a corresponding deposit to a commercial F/X bank account submitted along with the VAT return. Existing Central Bank regulations demand that a certain percentage of these deposits be converted immediately into BDS $, leaving the balance available for the company to use for future imports. Soon see how many Bajans take advantage of this immediate tax relief and fill the Central Bank vaults with foreign exchange. This provides tax relief to low, middle and high income earners, whoever can lay their hands on foreign exchange cash.

    2. Allow all Barbadian Citizens who are up to date with their income tax and land tax obligations, to legally ‘import’ any offshore foreign exchange holdings to a local commercial bank WITHOUT having to immediately convert the central bank prescribed amount to BDS $. This will happen when the consumer uses that foreign currency to purchase goods and services from local companies under item 1 above. Allow this legal currency importation to take place for a short window with no penalty, no obligation of taxation on the money, no government interference in the money itself. We all know that Bajans have foreign exchange held overseas out of fear of what our Government will do to destroy the value of the BDS Dollar – we all believe that even our Government Ministers have money overseas held in secret accounts contrary to the Central Bank regulations. Why not encourage it to be brought back to Barbados and allow it to enter the local economy sensibly?

    3. TRANSPARENCY AND ACCOUNTABILITY OF OUR PUBLICLY ELECTED OFFICIALS. We are a backward society if we continue to allow our Government Officials to have free reign on back room deals surrounding public spending, where they negotiate kick backs and “commissions” for themselves. What right do we as a country have in allowing our elected officials to negotiate Multi Million dollar projects which are neither wanted nor needed by the public, but which allow the negotiating official to arrange a “small commission” or “finder’s fee” as is so widely discussed among those of us who hear stories about the same?

    4. Accept that if a hard working lower to middle income earner is earning $2500 to $3500 a month, by the time taxes are removed they only have a fixed amount of money to spend. Raising tax rates is NOT going to increase revenue it is only going to mean that the fixed amount of dollars available to spend are going to be spent more frugally, for example negotiating deals that leave the VAT portion out of the transaction. If I need to feed my children, and I only have $100 to do it with, raising the NSRL to 10% is not going to get me to spend $110. I don’t have $110. I will continue to spend $100, which means that I am encouraged to find ways to avoid the new taxation. Did Mr Sinckler not admit in a previous budget speech that when VAT was raised from 15% to 17.5% that the revenue actually decreased? Did he not learn from that lesson? Sir Winston Churchill once said that “Attempting to tax a country INTO prosperity is like a man standing in a bucket and attempting to lift himself up by the handle”.

    4. Government has as much right owning and operating non-critical businesses, as do Private Sector businesses have a right attempting to run this country. There is a valid argument for the ownership of entities such as the BNOTCL in order to protect the consumer from monopolistic pricing which would dramatically impact on our economy; there are few good arguments for the Government ownership of hotels and other businesses in highly competitive areas INCLUDING CBC. There is no National Security issue, there is no impact on the economy to be prevented, there is only the loose social consideration that local content has an outlet through CBC, and that allows protection of our culture through its expression to the public. Why don’t you mandate that all private content providers in Barbados (currently FLOW and DIGICEL) allocate a ‘channel’ to local content? Eliminate the expense that is CBC, or privatise it so that the public are not expected to pay for the poor management of it. There is only the slightest incentive for a Government Organisation to be profitable, because the tax dollar will pay for any shortcomings; private enterprises don’t have that luxury, it is “profit or die”.

    5. In addressing privatisation, the single largest concern is the retrenchment of public sector jobs. Privatisation doesn’t mean loss of jobs necessarily, any private sector investor would be a fool not to utilise the human resource capital that already exists in a company they are buying out. What would happen, though, is that the immediate assessment of those who are performing and not performing, which would result in an increased organisational efficiency. Part of the conditions of sale of any Government Organisation would have to include fair and just separation packages for those who are retrenched. Rather than lose $2 million per year in operational losses, Gov’t could pay $2 million in one time severance and separation packages which would be fair to the lost employees. Those who remain, in order to offset the severance of separated employees, could be offered participation in ownership of the privatised company. For example, 33.33% ownership in the company is offered to the remaining employees in exchange for all outstanding holiday / benefit pay that may have existed under the Gov’t ownership, to compensate for the readjustments that would take place under new majority ownership. The image that is portrayed right now is that Privatisation means loss of jobs – that doesn’t have to be the only scenario, and participating in the ownership of the new company means that there is strong incentive to be productive in order to reap the rewards of dividend payments based on profitability. The collective employee ownership would have a 1/3 weight in all major corporate decision making, giving further participation in the direction that the company takes to becoming more profitable. Let Government Govern, let Private Sector businesses conduct business at a profit.

    Good ideas are only good if they can be implemented, in the case of the above ideas they would have to result in (a) improved foreign exchange reserves, (b) improved anti-corruption initiatives, (c) decreased expenditure on the Government side and increased profitability on the private sector side with transfer of jobs from public sector to private sector. I am not an economist, nor am I a Minister of Finance, so I leave the discussion of Merit to those who know more than I do.

    Reply
  15. Alex Alleyne May 31, 2017 at 11:33 am

    $ devalue , Not under my watch. Just when I thought he ran out of things to TAX.

    Reply
  16. Saga Boy May 31, 2017 at 1:44 pm

    Too much emotionalism. Let’s deal with the data. I support the budget. Our current problems is also a result of our lifestyles. We need to take steps to reduce e demand for foreign currency. We need to place emphasis on local argriculture. Develop programs with the Chinese to improve efficiency, productivity, and reliability re our local farmers. Create incentives to develop an import substitution program aimed at reducing our dependence on using foreign currency. Trade within CARICOM should be done using the currencies of the respective countries to reduce our dependence on US dollars. I would put a quota on the importation of cars like Errol Barrol attempted to do in 1986. Audit all retail and whole sale companies with businesses in USA etc to ensure we are getting our fair share of foreign currency. In the case of hotels audit them as well..lets see the contracts they have with the tour operators…trace that to the occupancy levels and monies deposited…etc…We have to do something about the private sector which continues to juck out our eyes with high prices….I could go on and on. @ Peter I await your proposals.

    Reply
  17. Saga Boy May 31, 2017 at 1:53 pm

    @Peter.lets raise the level of debate instead of grabbing balls. I am tired of the emotionalism. This is our country. Let’s do something to get it back on track. When I check the unemployment in the other countries in the region Barbados is still doing well. When I check the quality of life Barbados is way ahead. The MOF is correct too ,any people want free rides. Small businesses need to play their part, pay the taxes. Can’t wait to hear the agreement arrived at between BRA and the Bankers Association. Too much doom and gloom.

    Reply
  18. smiley May 31, 2017 at 5:10 pm

    Fed up could as well get rid of this government that Rob the poor and devalue the middle class while getting their pockets line from the rich who are getting all the privileges in this country.Mia you got a plan ? I want to hear asap ,Six votes in my family could be yours.

    Reply
  19. jennifer May 31, 2017 at 7:06 pm

    Well said smiley. And people are afraid to see or say this fact. While spending the same. No one will take this people serious. But time Is almost up.

    Reply

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