Come clean!

Herbert wants to know the true state of the fiscal deficit

The island’s main private sector organization is calling on the Central Bank of Barbados to come clean on the island’s fiscal deficit.

While agreeing with most of the recent comments made by Acting Governor Cleviston Haynes on the performance of the economy over the past nine months, and the measures needed to correct the economic challenges, President of the Barbados Private Sector Association (BPSA) Charles Herbert said the report fell short of saying exactly how far the economy was in the red.

In delivering his third quarter report this week, the Governor said “the fiscal deficit was estimated to be $279 million for the first six months of the fiscal year, a $115 million improvement over the same period in 2016”.

However, Herbert said “the report does not allow the reader to accurately deduce the progress in the reduction of the fiscal deficit”, which up to June this year was estimated at close to six per cent of gross domestic product.

“It is asked that the Central Bank issues a clear statement showing the actual progress made with the reduction in the deficit and the details on the efficacy of the measures outlined [by Minister of Finance Chris Sinckler] in the May 30 Budget proposals,” said Herbert.

As for the $542 million austerity package announced by Sinckler back in May, Herbert expressed concern that the measures, which included a 400 per cent hike in the controversial National Social Responsibility Levy (NSRL), a two per cent tax on foreign exchange transactions and an increase in the tax on fuels, had so far collectively failed to achieve their intended targets.

“The economic performance at the end of September when compared to the end of June 2017 would indicate that six major fiscal measures introduced in the last budgetary financial statement collectively have not achieved their stated objectives,” the BPSA head said, adding that there is no indication that the private sector, which had joined with the island’s trade unions back in July in protesting against the NSRL, has been proved wrong in terms of its initial reaction.

“In response to the Budget the private sector said while the NSRL would bring in revenue to the Government, the results would be short-term pain, without long-term gain, as there is yet to be anything but a series of one-off unsustainable measures, which have not addressed the needed improvements in the underlying inefficiency of the public sector,” Herbert said, adding that “the Central Bank report supports this view”.

Government is currently boasting of $98.6 million in direct earnings from the recent tax measures, including $48.8 million from the NSRL alone.

However, based on the latest Central Bank report, the country’s foreign reserves plunged further below the comfortable 12 weeks benchmark to reach just 8.6 weeks of import cover or $549.7 million at the end of September.

Though not surprised by this less than favourable performance, Herbert said it only served to “justify the concerns highlighted by the private sector and other interested parties”.

He pointed out that the economy grew by 1.4 per cent for the first nine months of this year, down from the 2.2 per cent witnessed in the first six months.

“The private sector regards this decline as confirmation of its view that the fiscal measures introduced in July would cause a slowdown in economic activity and affect growth,” the BPSA spokesman said.

Herbert also said that the low reserves underscored “the private sector’s view of the need for Government to accelerate its plans to arrest the declining credit rating by improving fiscal discipline in order to allow for international debt refinancing at lower rates for its external debt payments and to improve credit rating in the medium-term”.

But while renewing his call for the Freundel Stuart administration to urgently reduce its spending, he said the BPSA was not suggesting any layoffs of public sector workers since this would only put further strain on the already struggling National Insurance Scheme.

“The private sector’s consistent call is for Government to reduce expenditure as such, not merely to stabilize expenditure,” he said.

11 Responses to Come clean!

  1. Adrian Hinds November 3, 2017 at 10:48 pm

    The Barbados Private Sector Associations is not in a position to help Barbados out of this economic mess. Goverment’s wages bill is as large as it is because our people have no other means of employment since this group has hamstrung any attempt to deepen the entrepreneurial class by including more average barbadians as owners of enterprise.

    Reply
  2. MARIA Holder November 4, 2017 at 12:57 am

    And the bill getting bigger – 45 at BIDC, 60 at the airport, 24 at electoral, BRA has to have about 400 and counting by now. And the numbers keep growing – election fever, election fever, oh oh oh = everybody dance, everybody move, The country sick

    Reply
  3. Saga Boy November 4, 2017 at 1:08 am

    It is not in the interest of the private sector to expand the entrepreneurial class. This will result in greater competition and less profit. Many small businesses and would be entrepreneurs can tell you stories about how loans and financial assistance have been blocked by some of these people who say that black people are lazy.

    Reply
    • Peter Thompson November 4, 2017 at 9:17 am

      Saga Boy, Barbados has no entrepreneurial class: very few of the members of the BPSA are entrepreneurs. Entrepreneurship is when someone creates new products, or exploits new markets, or devises new processes. The vast majority of Bajan businesses are NOT entrepreneurial. The main barrier to entrepreneurship is not funding, it’s lack of know how around risk mitigation and business models.

      Reply
  4. archy perch November 4, 2017 at 1:31 am

    Herbert got his BLP political sword in his right hand swinging left and right seeking victory for he and his friends. Despite knowing the situation, he did the unethical thing and rushed to the media recently to spill the beans on the NIS and call for the resignation of the Board. Herbert – as the actuary for the NIS- knew that his report could only be released by Parliament according to the NIS Chairman. But he mad sure he Herbert released it first to Barbados Today and then the other media houses to drive some more lashes in the DLP government.
    This PARASITE up until now can’t tell us when his piers in the private sector will be paying the 900 million in Vat money gtey own the government, as good as an actuary he is.
    He has the BLP and the unions in his pocket while continuing to screw the living daylights out of the poor Barbadian consumer.

    Reply
  5. Ras November 4, 2017 at 8:32 am

    Thee White shadows coming out in full force, them smell the road back to slavery is on it’s way.
    The Plantation owner leading the way
    O me miserum

    Reply
  6. Greengiant November 4, 2017 at 8:58 am

    Now Brother Herbert, if you are asking the Central Bank to give us more information that we can read and determine the true state of economic affairs. I agree with you on this.

    I also want you to ask the political parties, to publish their methods intended for use in our economic recovery, restructuring, and restoration. You can also tell them they should do so early enough to allow people like us Charles to review how practical, painful, or purposeful they will be.

    Anything short of that will deem you to be another employee, associate, or mouthpiece of the political setup.

    Reply
  7. De Fish Man November 4, 2017 at 11:23 am

    It’s all a bunch of nonsense……!!!
    To borrow money to pay back a loan & then to keep borrowing bigger & bigger loans to pay back over & over again…!!!
    It’s a vicious cycle like SNAKE EATING HIS OWN TAIL…!!!
    In the end there will be nothing…!!!
    Every thing will soon be sold & will belong to Trinidad.
    Transport system,garbage,water everything gone because government in power now doesn’t know what they are doing can’t even fix a few potholes properly..!!
    Should just Call it (The Republic of Trinidad,Barbados & Tobago….!!!)
    What happened to all of the oil that was supposedly being explored off the offshore NE & SE of Barbados…!!!
    We have been hearing about how many billions of dollars that Oil companies would be bidding for production….!!!
    What happened to that talk…..???
    Is the government keeping it for them selves…???
    Or just keeping it a secret…???
    Or was it just BS in the first place.??
    Another propaganda to give people hope…??
    If it’s there why are we wasting time….??
    Sell it & make the Island self sufficient pay off the debts…!!!

    Reply
  8. Adrian Hinds November 4, 2017 at 12:15 pm

    Funding is a big part of the problem.

    Reply
  9. Orlando November 4, 2017 at 3:48 pm

    If the Central Bank, come clean . Would the private sector come clean as well they increase our cost of living when you feel prices went up worldwide it came down and they never bring back down the prices that they had carried up.

    Reply
  10. Milli Watt November 7, 2017 at 5:50 pm

    you should offer yourself to the goodly people of this god fearing island (choke…weeeeeezzzee sob) and then maybe I’ll tell you the truth MAYBE

    Reply

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