Let Down by DLP

With the conclusion of the 2009-2010 Estimates Debate this week another major milestone in the life of the present Government has come and gone and the David Thompson Administration is yet to play a scoring shot off the front foot.

It is becoming clearer and clearer that despite all of his bravado before the election and since, that Thompson is uncomfortable in his Prime Ministerial skin.

There is a lack of confidence that erupts like a case of teenage acne whenever his handling of the economy is questioned. That it has now spread to other areas of his government’s policy, namely the Constituency Councils, does not bode well for his longevity.

But back to the Estimates Debate.

It was easily the most uninspiring opening presentation by a Minister of Finance in recent memory. There was no lucid picture of the current economic circumstances that we face as a nation and consequently the areas that the government would be targeting for either revenue or expenditure. While the country waited for some sign or signal to inspire confidence the screen remained blank.

There were lots of snapshots of Barbados’ leadership role in Caricom, regurgitated from a speech delivered two days earlier at a branch meeting, but even here there was little attempt to place its importance into an economic context.   There was also a recitation of some economic figures without any illustration of their context or meaning to the situation we face today.

As the Debate progressed and questions from the Opposition raised the pressure – there was a bilious outburst on the final day that now characterizes the Prime Minister’s response to legitimate criticism.

It is human nature that people will reflect on the previous tenure of the Prime Minister as Minister of Finance. For some there will be bitter memories, for others there will be skepticism and still others may be nervous.   Unfortunately, the Prime Minister fed into these emotions by a lackluster and less than complete analysis of where we are and where he intends to take us.

Perhaps if he would simply buckle down to the task at hand, then all the old questions of competency would disappear and he could bury the ghosts of 1991. There are some things that do not derive any benefit from an attempt at being different. One plus one equals two – no matter how you say it and people just want the facts, pure and simple!

 

Mia Mottley and Owen Arthur were able to clearly show that given the Government’s own figures that their revenue targets were in all probability unattainable and that the deficit would likely skyrocket to $1 billion.

This is against rapidly falling foreign reserves, declining export earnings and foreign investment. The further creation of credit by Government to finance this deficit in this environment will only put the country into a deeper hole.  It is precisely this lack of understanding and confidence that will not help us at this time when there must be urgent stabalisation of our economy and people’s jobs.

Insecurity on the Government benches scorns Opposition suggestions, while uncertainty heralds a unified approach to national problems. Maturity should dictate that the two cannot operate in tandem.

The Democratic Labour Party has approached governing like a twenty twenty cricket match.  Plenty of rash shots with no recognizable form or technique. It is time they learn that a five-year term – is much more like a test match where you have the opportunity to build an innings to win the game.

Stick to the basics and occupying the crease becomes much more enjoyable and productive. The people of Barbados sent them into bat and are looking for a big score.

So far they have been horribly let down.

Barbadians at Risk

But what these Estimates speak too (and I hear the Prime Minister say that the growth rate last year was 0.7%) but I must tell you that the revenue performance is such that it would otherwise be akin to a declining economy – a significantly declining economy.  I am not going to challenge the authenticity of what he says, but I am going to use what is in here.

 

Import Duties, Sir (the money paid on things when they are imported into Barbados) would you believe that this government collected les import duties lass year – than in 2007?  Would you believe that?  And there has been no change in the rate of import duties? 

 

But yet Sir, having taken in less last year (and there were then projecting that Import Duties would be increasing by more than $23 million) almost a ten per cent increase – would you believe that they come back again this year Sir, at a time when they project that the economy would decline by two per cent – last year they were saying that the economy was going to grow by three – they now say that the economy is going to decline by three per cent – would you believe that this government, this Minister of Finance – tells us that Import Duties are going to grow by $23 million, again in this year?

 

And Corporation Taxes, Mr. Speaker – Sir, Corporation Taxes – they projected, Corporation Taxes, Sir – at over $570 million.  Sir, would you believe that Corporation Taxes Sir – not only declined – they took in $44 million less, in Corporation Taxes, last year – than the Barbados labour Party took in for 2007? 

 

Sir, it is the most serious problem this country faces in terms of its revenue!  Because it speaks not just to revenue – it speaks to the non performance of the International Business Sector.

 

It speaks to the fact Sir that the International Business Sector normally makes up 65% of the Corporation Taxes.  And when you cross reference it Sir to the fees that they contemplated would be raised from the International Business Sector, last year they said they were to raise $3 million in fees.  Sir they barely made $1.5 – almost a 50% reduction. 

 

Sir when I look at the 50% reduction in International Business fees and then I look at the less than $100 million decrease Sir – of Corporation Taxes – I am of the belief Sir that the International Business Sector is serious trouble, in this country. 

 

And that has nothing to do, with the word coming from Gordon Browne and America and Germany and France – as to what further pressure they intend to put in under, it is one of the most serious problem facing Barbados today.

And Sir – I say it all the time (it appears to be un-sexy) but you know what Sir, if we did not have the International Business Sector, contributing – 65% of our Corporation Taxes – the Member for St. Peter could not have undertaken the most ambitious tax reform programme in this country since Independence! 

 

We could not have given Barbadians householders the first $150,000 off their Land Tax!  We could not Sir – have given Barbadian workers – the first $25,000 off their Income Taxes!    We could not have given Barbadian workers who do not pay Income taxes – a Reverse Tax Credit.

 

The buoyancy of the Corporation Tax and the VAT – gave him the comfort to undertake the most remarkable tax reform programme to ease Barbadians and give them more disposable income.  This government now can’t even peep on them. 

 

And instead, what do we have – two Minister of International Business in twelve months, and one now that is called International Business and International Transport and the only common denominator between them is the work “International.”  Nothing else to do with one another! 

 

But Invest Barbados now Sir – is under the Minister of Finance.  But then again all investment and all decision making and all licenses – you have to go the Member for St. John. 

 

All roads lead to him, when it comes to anything to do with investment; licensing or decision making in this country.  Let us hope Sir that he does not fall down at anytime cause then nothing will happen

Patriotism vs Clico

“Men in authority will always think criticism of their policies is                                                                           dangerous. They will always equate their policies with patriotism,                                                           and find criticism subversive.” – Henry Steele Commager

It is notable that the Prime Minister’s response to our leader’s charge that CLICO’s statutory fund was $93 million in the red was met with appellations of “dangerous” and “panic.”  It is also significant that he did not and has not answered the bald question on the true state of CLICO’s statutory fund. It will be to his everlasting shame if he does not come clean with Barbadians on a matter that is vital to the financial security of thousands of Barbadian families and the company’s employees.

It is really very simple – if CLICO Barbados is “safe and sound” then state the FACTS, Mr. Thompson. If it is that there are concerns then state those concerns and the steps that you are taking to deal with them. This is what leadership and confidence is about. It is what you promised and what you have so far failed to deliver.

There can be no halfway measures here. No red herrings about other insurance companies or financial turmoil in other places and especially not since the disastrous mid-week news out of the Bahamas. In fact these are the very things that require the truth to shine through – transparent and irrefutable.

It is for this reason that Mia Mottley questioned the Prime Minister’s fidelity to CLICO’s Barbadian policyholders, investors and pension fund owners. If there is any loss of confidence in the local insurance giant it is amplified by the Prime Minister’s reticence to lay out the unvarnished facts. We will itemize his behaviour so far:

·         The Prime Minister assured the country that CLICO was “sound, prudently managed and well regulated.” Yet he avoided answering Miss Mottley and the journalists on the size of CLICO’s statutory fund deficit.

·         He commended the action by the Trinidad Central Bank which, among other things, protected 100,000 policy holders when their statutory fund was in deficit, but he has failed to take similar action to protect our 40,000 policyholders here.

·         He represented the buy back of the Barbados National Bank as a patriotic goal knowing all the while that it is wrapped up in his Government’s plan to rescue CLICO.

·         He provided 14 years of legal representation to CLICO and his law firm Thompson & Associates, albeit in his absence, is still their legal counsel of record

These facts do not give us confidence in the Minister of Finance’s ability or propensity to act first in the defense of Barbadians and Barbados.

Let us be clear. Mia Mottley does not want CLICO to fail. Too much is at stake for the thousands of Barbadians who have placed their trust and hard earned cash in the company. She is also concerned about the company’s employees. But she will not sit idly by and allow conflicted judgment to overwhelm the interests of so many thousands of Barbadians and the country at large.

The Prime Minister must face the problem and fix it. His first duty must be to call on the company to find a private sector solution to its problems. Why has he not called for Barbadian ownership and control of this “sound, prudently managed” company in the same way that he wants us to own the Barbados National Bank?

Would this not make more sense as a first priority given the clear and present danger that exists today? Aren’t the policyholders, credit unions, Bajans in the diaspora and at home good enough to buy this well run, profitable company? Or, is he only interested in protecting one particular job?