Govt handed proposals for reform of state agencies

The Freundel Stuart administration has in its possession a series of proposals on the touchy issue of the reform of state enterprises, the man who coordinated the drafting of the framework has revealed.

However, in announcing that Government has had the report for two months, Chairman of the State-owned Enterprises Oversight Committee Dr Justin Robinson refused to release details of what is in the report, when he delivered the Democratic Labour Party’s luncheon lecture at the party’s George Street headquarters today.

Still, Robinson said enough to suggest that serious decisions had to be made on the future of some of the 57 statutory bodies, which he said absorbed close to half of Government’s revenue in transfers and subsidies alone, contributing to a “clearly unacceptable and unsustainable” deficit, which stood at $537.6 million when Minister of Finance Chris Sinckler presented an austerity budget in May last year, aimed at wiping out the deficit.

The University of the West Indies lecturer said while the issue of reform of state agencies was “an extremely sensitive area in Barbados”, the options before Government were to allow things to remain as they are, or any combination of abolishing some services, mergers or privatization, all of which, he said, would result in “winners and losers”.

“It is going to require significant political will to do this and the reason is that these things are sensitive. None of these things are going to be easy. There is very little that can be done to reform this without affecting a large cross section of Barbados . . . [and] there are going to be winners and losers. So that is going to require significant political will,” he said.

In the ten-year period dating back to the 2006/2007 financial year and ending last fiscal year, Government revenue grew from $2.1 billion to just over $2.77 billion, while total expenditure increased from $2.3 billion to $3.05 billion, seven per cent more than it was earning.

Robinson said 41 per cent of Government revenue went to transfers and subsidies, 28 per cent to wages and salaries, 14 per cent to goods and services and 24 per cent to debt servicing.   

He said in addition to debt servicing, transfers and subsidies accounted for the fastest growing section of the expenditure side of the ledger, and that the International Monetary Fund and other observers “have signalled that a $300 million plus reduction in subsidy is what the country should be looking at.

“The point here then is that adjustments in the area of transfers and subsidies are likely to form part of any successful adjustment strategy because it is such a big item,” Robinson stressed.

He told those gathered for the midday lecture that the Transport Board, the Queen Elizabeth Hospital, Sanitation Service Authority, Barbados Tourism Marketing Inc, along with the Barbados Tourism Product Authority, the Barbados Agricultural Management Company, the University of the West Indies, the National Conservation Commission, Caves of Barbados, and “grants to individuals to capture the pensions” accounted for the lion share of the transfers and subsidies.

Robinson questioned whether some of these entities were as efficient and nimble as intended, and warned that unless there were changes to the funding mechanism for these state agencies, it would require a revenue solution through higher taxation, selected cost recovery, reduced service levels, targeted reduction, means testing or other forms of cost recovery.

“Beyond that though, there are some larger and bolder options. One could be to abolish or wind up. So you could go through this list of [57 state-owned enterprises] and say, ‘some of these entities were set up back then and [are] not needed and we decide we don’t need this anymore’ . . . Does the Barbados Government need to provide this service in 2018?” he said.

The senior lecturer also said the privatization option could include “an outright sale”, leases and management contracts, joint ventures, and the sale of shares to the public, while some agencies “could become self-financing autonomous vehicles”.

He said any administration that chooses to adopt any of these recommendations would need to expend much of its political capital, and reform of these state agencies would require a “high level of expertise, careful and detailed analysis and a consideration of the broadest possible range of options”.

“When we do that we are going to need clear plans, clear targets and clear timelines,” he advised.

9 Responses to Govt handed proposals for reform of state agencies

  1. Michael Goodman
    Michael Goodman January 13, 2018 at 8:50 am

    And you honestly believe this Government will slash and cut before the election?

    Just like last time, they will promise not one job will go and the morning after they are elected, the 3,000 sent home after the last election will be a walk in the park compared to what they will do. This time, it will be more like 10,000.

    But of course, the easily led sheep will believe their lies for the third time. What fools……

    Mr. Robinson, be patient. Your report will languish on their desks at least until June. Don’t expect them to take even a peep before then.

    Reply
  2. Cuthbert Lucas
    Cuthbert Lucas January 13, 2018 at 9:24 am

    Really Dr. When you send home all these persons how will they live.you heard Dr.butch Stewart telling us that we must stop some of the welfare. Give some of your earnings to help the poor

    Reply
  3. Olutoye Walrond
    Olutoye Walrond January 13, 2018 at 9:48 am

    The state corporations are the parties’ main vehicle for dispensing the meat of the fatted calf. You have done your duty, but don’t expect them to deprive themselves of that power.

    Reply
  4. luther thorne January 13, 2018 at 10:01 am

    Waste of Time
    Waste of Money.
    Government will not implement.
    Government suffers from ( IDD) Implementation Deficit Disorder
    A new Government will be in Office shortly and they will not look at this. Typical !
    Productivity is low, no one is willing to work hard. Employees are demotivated and distracted , over sensitive and like complaining and nagging. So this will remain catching dust

    Reply
  5. Ossie Moore January 13, 2018 at 2:28 pm

    “Christal Blue Persuasion”!! Do you remember that song at Mary’s Moustatch?

    Reply
  6. Jerry January 13, 2018 at 2:50 pm

    Emperor Nero fiddled while Rome Burned to the Ground. Emperor Do Nothing is doing exactly that to our Beautiful Country destroying it.

    Reply
  7. Committed Bajan January 14, 2018 at 7:05 pm

    We continue to speak of low productivity in the government service but no one says why.
    The 2016 qualifications order was made law December of that year causing hundreds of competent and experienced government workers to either retire or be reverted because their degrees were in history, literature, sociology, psychology etc.
    Those who were not of age were reverted to lower posts after acting higher posts for many years
    Only to be replaced by young inexperienced University graduates with degrees in management but no management experience.
    How can productivity be any higher when the new staff don’t have a clue and the experienced staff have all retired or are waiting to retire?

    Reply
    • Mark Rosmar January 15, 2018 at 2:23 pm

      If they have all the attributes to which you refer – Barbados may not want (or be able) to adequately remunerate them.

      Reply
  8. Donild Trimp January 15, 2018 at 11:38 am

    Barbadians are experts in burying their heads in the sand like ostriches.

    Barbados is an unproductive society bathed in the entitlement mentality both in Government and the private sector. The majority of workers are lazy and draws a salary by false pretenses.

    Waiting in line for 3 1/2 hours in Oistins to purchase a $10.00 visitor’s driving permit is folly).

    A number of deficiencies are blatantly evident with how things are done in Barbados. People working in Banks who are so stupid it boggles the mind.

    All this is due to an inadequate and failed educational system geared towards the molding of educated fools to fuel an economy based strictly on slave wages.

    Right at this moment Barbados is a failed state and it is going to take nothing more than a miracle to turn things around.

    Reply

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