BRIDGETOWN, Barbados, CMC – Prime Minister Mia Mottley presented a tax-free budget to Parliament on Tuesday while underscoring the need for Barbados to continue to put its nationals at the forefront of socio-economic development.
“This budget is about national transformation, about building a global society and a world-class people by 2030. This budget ought to be upward, onward, Bajan Excellence 2030. That is the mission. Mission Transformation is our crusade to make Barbados truly global to accomplish excellence,” she told the Parliament, where her ruling Barbados Labour Party (BLP) controls all 36 seats.
But the main opposition Democratic Labour Party,(DLP) said Mottley had sought to hoodwink the population and that Barbadians have imposed at least 30 taxes since the Mottley administration came to office in 2018.
“The Prime Minister and Minister of Finance claimed gloriously that there were no taxes raised in this budget, but in effect, there were no tax cuts in this budget either,” said DLP leader Dr. Ronnie Yearwood.
“That is what Barbadians were calling for, and that is what Barbadians required as we try to address the cost of living,” he said, adding that the budget presentation sounded more like a Throne Speech given that it did not address the high debt burden.
“There were no reforms in education, pension or the National Insurance Scheme, and “the reality is after this budget, your struggles as Barbadians, housewife, dad, a taxi driver . . . will continue,” he warned.
The government has outlined revenues of BDS$3.5 billion (One Barbados dollar=US$0.50 cents) and expenditures of BDS$4.2 billion, a deficit of approximately BDS$750m to be financed during the upcoming fiscal year.
Mottley announced a reduction in fees associated with travel within the Caribbean Community (CARICOM) for six months starting July 1, 2023. She said the decision to reduce the travel tax from BDS$37.50 to BDS$20 would cost the government BDS$2.2 million in revenue.
“It is meant to be a specific tax reduction to help boost the travel to where it used to be before,” Mottley said, adding, “notice will be given to IATA [International Air Transport Association] to ensure that we comply with having this happen from July 1”.
In her lengthy presentation, Prime Minister Mottley did not elaborate on the specifics of all the numbers that detail Barbados’ current fiscal situation but said there had been a further reduction of Barbados’ debt. As of Tuesday, the island’s Gross International Reserves stood at BDS$2.99 billion, with another BDS$200 million due from the Inter-American Development Bank (IDB).
“We must continue on this path and further reduce our debt to secure long-term sustainability. We will continue prioritizing prudent financial management, improving revenue collection, and streamlining our expenditures to achieve this.
“We will also continue to explore innovative financing mechanisms that help us reduce our debt burden while providing us with the necessary resources to invest in critical areas such as infrastructure, education, and healthcare.”
A partial repayment of BDS$74.8 million will be made out to 5 407 individual bondholders of Series B bonds who are on the register by March 31. Each of them will receive BDS$17 500, with 2 627 being repaid in full.
The prime minister said there is no plan for massive layoffs in the public sector, but there will be adjustments in the state-owned enterprises (SOE) sector, but even then, the changes would be made with the Barbadian public in mind.
Presenting the Financial Statement and Budgetary Proposals 2023, Prime Minister Mottley spoke of her government’s willingness to recognize the challenges during the last two years due to the coronavirus (COVID-19) pandemic and other global events.
Mottley told legislators that government would reduce the principal by 25 percent if people paid in full money owed to the Barbados Water Authority (BWA) and the Queen Elizabeth Hospital between March 15 and September 15.
In addition, BDS$ 20 million will be allocated to the BWA to update the reservoirs and water distribution network.
“Once the Water Authority literally could not enforce against Barbadians for bills, it meant that the last three years we have been having to commit and help them with its capital works program, largely because of a reduction in revenue over the last three years,” Mottley said, adding “the last two years we paid BDS$30 million and this year it will be BDS$20 million.”
The BWA finances will also be boosted by a BDS$80 million grant from the Green Climate Fund, the world’s largest climate fund, which is mandated to support developing countries raise and realize their nationally determined contributions (NDC) ambitions towards low-emissions, climate-resilient pathways.
Mottely said that investments are critical for the island’s growth and that economic growth and the subsequent easing of the financial burden on citizens hinged on investment from the public, private sector, or the international community.
“It must be investment vehicles for the small people, not just the large. That investment must equally be respectful of our people, national spaces, and traditions<‘ she said, noting that there will be investment across all sectors of the economy in the coming fiscal year.
The government has said it will be providing BDS$139 million to the operations of the Queen Elizabeth Hospital, with the Health Service Levy providing what is expected to be a minimum of BDS$75 million.
In addition, BDS$ $5.5 million has been provided to ensure the expanded Accident and Emergency (A&E) is completed, with a further five million dollars allotted for the rehabilitation of the Lions Eye Care Centre built by Lions International in 1992.
Funds have also been allocated to the University of the West Indies. Still, the government is keen to hold discussions with the institution to ensure that the areas of study offered better match the national development needs.
The government is allocating BDS$ 27.6 million through the Development Bank of Latin America (CAF) for road rehabilitation.
The government said a tissue culture laboratory would be constructed at the cost of BDS$15.3 million as Barbados moves towards becoming an exporter of essential products like sweet potatoes and peppers.
Mottley said it is “a prospect abandoned for too long in this country.”
The government also announced other initiatives, including training that will be a significant facet of Mission Transformation, including a comprehensive training program for supervisory managers and another in customer service and hospitality.
The National Training Initiative and Coursera will offer 15 000 courses to provide individuals with the skills to better themselves and open employment avenues.
She said Florida International University would introduce a Barbados campus within the next 12 months.
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