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Barbados Private Sector Group Generally Pleased with Budget Statement

The Barbados Private Sector Association, (BPSA) has welcomed budget measures announced by Prime Minister Mia Mottley on Monday as “evenly poised” noting also that it is “cognizant of the economic and social challenges particularly following the devastating impact of the 2020 coronavirus (COVID-19) pandemic.

“That there is some austerity in some of the measures, is no surprise, however, there are areas which will require clarity and further elucidation to make a more reasonable assessment of their likely impact,” the BPSA said in a statement.

The government announced a raft of tax measures aimed at raising much needed revenue even as it provided some measure of relief to Barbadians coping with increased prices occasioned by the increase in oil and commodity prices due to the ongoing Russia-Ukraine military conflict.

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Prime Minister Mottley in her first budget presentation since her ruling Barbados Labor Party (BLP) was swept back into office in January, outlined a series of measures that she said would shield Barbadians as well as sharing the burden and benefits over the next 12 months.

In its statement, the BPSA said as in past years, the private sector grouping, and by extension the various sectors, were given the opportunity to submit recommendations to the government in anticipation of the budget proposals and financial statement.

“These recommendations were made within the context of the need to regenerate the sectors generally and to support economic recovery and growth for the country in a post COVID 19 context.

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“The private sector is pleased with the agreement and acceptance of some of our proposed measures, including the relief to the agricultural sector with the reduction in the water rate for farmers and the ease in cash flow challenges for some operators in the hotel and tourism sector. While we await more details on some of the measures announced, the strategic focus on advancing the renewable energy sector, particularly the inclusion of households, is lauded by the private sector as any further attempt to mitigate the rising cost of fuel is welcomed. “

The BPSA said the measures to assist with the cost of living are acknowledged and these will be beneficial for all.

“The BPSA supports the continued effort to protect the most vulnerable in our society whilst taking into account the need to support the youth and their development. The support granted for digitization in the small business sector is another accepted recommendation submitted by the private sector and demonstrates the government’s acknowledgment of the need for broadened wealth creation in the economy. “

It said all sectors appreciate the announcement in the capping of the freight charges that are included in the computation of import duties.

“The private sector has lobbied the government for such relief, and we are pleased to have the measure favorably considered. This measure, together with the reduction in the price of fuel to consumers, we hope would have a positive direct impact not only on the cost of living but on the disposable income of households so as to positively impact their spending power. Any gains will redound to the benefit of promoting growth in the economy. “

The BPSA said it has taken note of the government’s reiteration of its intent to reform state owned enterprise (SOEs) and it await more details on the timelines for the anticipated reform.

“We believe that control of expenditure, along with tax collection efficiency, could release tangible benefits to government’s overall financial position. We view this reform as urgent and critical to discontinue the transfer dependence of the targeted entities and to stem the fiscal leakage.

“We urge the government to adopt the guidance given by the International Monetary Fund (IMF) in the formulation of financial health targets and dashboards and rigorous attention to improve governance and reporting.”

The private sector said it also welcomes the proposed engagement within the social partnership adding that “these discussions will provide not only clarity on the implementation of some of the measures but also will provide the anticipated forum to discuss the national debt especially in light of the end of the present arrangement with the IMF.

“Generally, however, it can be said the budget is evenly poised to protect the social safety net whilst incentivizing key strategic areas of growth for the government, whilst buffering the current and anticipated increase in the cost of living. The reduction of the cost of doing business in both the public and private sectors remain areas of urgent concern for the BPSA.”

CMC/

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