BLP Legacy (1999-2003):

                 Established a Senior Citizens Drama Group; engaged the elderly in constructive activity through structured programmes at 14 Recreational Activities Centres; staged exhibitions of craft by elderly; and launched as a major event the popular and successful National Senior Games.   

                    For some time now, Barbadians have been wondering what would have motivated the DLP to brutally snatch away the income tax concessions long enjoyed by members of credit unions, recipients of travel and entertainment allowances and subscribers to mutual funds. Especially since it should have been obvious to Finance Minister Chris “Unclear” Sinckler that doing so was bound to have devastating effects on disposable incomes and living standards. 

                     But thanks to Parliamentary Secretary Senator Irene Sandiford-Garner, we have been given invaluable insights into the DLP’s thinking. In a speech in the Senate on December 19, 2011, Sandiford-Garner in her usual shoot-from-the-hip style and like the proverbial “Grinch Who Stole Christmas,” delivered a scathing tongue-lashing on Barbados’ middle class. IS IT A SIN TO BE MIDDLE CLASS?As far as she was concerned, it was nothing but a lack of “gratitude and thankfulness” by those who raised a “hue and cry” over her government’s removal of tax allowances for credit union savings, and scornfully dismissed what she said were charges by parents that because of the tax change, “they could not pay for their children’s ballet, swimming, French and other lessons.

                     ” Barbadians were rightfully and understandably highly offended by her criticisms. For one thing they sought to make being middle class something to be ashamed of, and tended to belittle activities like “children’s ballet, swimming and French” This is ironic since she used to be paid as a Parliamentary Secretary in the Ministry of Culture and Community Development. What also made  the lambasting  especially painful and confusing was that it was made by a high profile representative of a party that once used to credit  itself with having “created” our middle class.

                Topping off her tirade, Sandiford-Garner said that since Barbados had not yet “felt the true impact of the recession”, such “middle class cry out” showed that members had “no comprehension of what hardship really is.” Such characterisation is insensitive and crass and lacks realisation that most middle class persons are less than generations away from back-breaking agricultural and other manual labour.

               MORE TO JOIN MIDDLE CLASS UNDER THE BEES But the aggrieved middle class and those who rightfully aspire to such status can take great comfort from the fact that the BLP has a proven record of consistently strengthening that group. The late Prime Minister Tom Adams legally paved the way for the transformation of credit unions into the powerful movement it now is. As PM and Finance Minister Owen Arthur not only brought almost 14 straight years of progress and prosperity, but triggered economic enfranchisement and the creation of a shareholding democracy through income tax allowances for buying new shares in public companies and investments in mutual funds, registered retirement savings plans and venture capital funds.      

           The middle class can therefore trust the BLP to make life better for it through its “Rescue, Rebuild, Restore” mission for Barbados that create more middle class Barbadians not stifle their progress.  

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CENTRAL BANK PRINTING MONEY

The vital importance of professional economics training and the experience of its practical application in government were amply demonstrated on Thursday, October 13, 2011 by two of Barbados’ most highly respected practitioners in this field, Opposition Leader Owen Arthur and Clyde Mascoll, the Barbados Labour Party ‘s lead spokesman on economic matters.

 Speaking to the media at the Opposition Leader’s office in the West Wing of the Parliament Buildings in Bridgetown, the two BLP representatives showed  the value of their training and experience to the nation and the party when they were able to reveal worrying  aspects of the economy that had not been explained by Central Bank Governor Dr. Delisle Worrell in his recent  review of the third quarter performance of the economy.

 Devaluation of Dollar on the CardsFormer Prime Minister Arthur made it clear that the BLP took very seriously its obligation to draw to the attention of the public any matters that threatened to undermine the country’s stability and the welfare of citizens. In this vein he said he was putting at the centre of public discussion a matter of the utmost seriousness since it related to our ability to maintain the value of the Barbados dollar.

 Arthur, Finance Minister for nearly 14 straight years, warned that the printing of money by the Central Bank on a large and sustained basis could lead to the devaluation of our currency and lamented that Worrell had the opportunity to draw this occurrence to the people’s attention at last week’s review, but had failed to do so. The Central Bank Governor using language which the ordinary Barbadian could not easily unravel, should have alerted the country to the fact that the Central Bank was now the chief financier of the government’s large deficit to the tune of $150 million and a recent Bank document had revealed that the Bank intended to continue and increase this procedure of the printing of money for the rest of the financial year.

The Political Leader of the BLP explained that money printing by the Central Bank had been indulged in since government had already virtually exhausted all other sources of financing. He recalled that Finance Minister Chris “Unclear” Sinckler would have earlier spoken on major policy occasions like the 2011-2012 Estimates and the 2011 Budget debates and had not mentioned that government planned to print money, something that the Medium Term Fiscal Strategy had not mentioned either.

Central Bank Board Must Take ResponsibilityArthur chastised Worrell for not taking the public into his confidence to explain how Barbados had come to such a sorry pass whereby the printing of money was at the core of government financing. For while the law allowed for such temporary and short term financing by the Central Bank, there was no legal provision or practice for the Bank to be the large scale and sustained financier.

 Declared Arthur: “We are now on the brink and if this continues Barbados will be on the slippery slope of devaluation and all that this state entails. Government must pull us back from the brink.” However, we now have a “gloriously incompetent”  Minister of Finance and an accomplice in Worrell who would not do what needed to be done and give the public an unvarnished account of our finances. He pointed to the fact that the Bank had given different versions of the rate of growth of the economy and had said Barbados should expect a “spurt” in growth , but the exact opposite had happened.

Furthermore, the printing of money was the worst thing that could be done with a fixed exchange rate currency whose value we would not be able to maintain if the printing of money continued.  Arthur said that as a former member of the Board of Directors of the Central Bank , he knew that directors had to see that the interests of the country were protected and they now had to intervene and put the institution on course to ensure the stability of the economy, since the Bank had now “gone rogue” and had a “stabilisation coalition ” in action.

 The Statistical Department ‘s survey on unemployment was based on scientific methods used all over the world, and these had been replaced by something Worrell had concocted because the department’s findings had proven to be an “inconvenient truth” to him and the government. This meant that a man like Worrell with professional training had ignored science  because he and others were intent on hiding from people the truth about unemployment. 

 Productive Sectors Mismanaged by DLP The BLP leader said he had already deemed the Fiscal Medium Term Strategy a  hoax since government was not building the productive capacity needed to put the country in a good position for life after the recession, and projects such as Merricks, Foul Bay, Pickerings, and Four Seasons had failed to materialise since the government did not know what it was doing., to the point where we were falling behind, were being left behind and could go under.

 As far as he was concerned, the Central Bank no longer could be believed since its integrity had been undermined, and if the printing of money was not stopped we would pay a heavy price. He said he had already called for the resignation of Worrell, but now it was time for Prime Minister Stuart to act. Economist and Former Minister of State in the Ministry of Finance Clyde Mascoll also lent his voice and expertise in support of the condemnation of the extensive and massive printing of money by the Central Bank.

 He noted that while historically the NIS could be relied upon to help finance the fiscal deficit, it was now being forced to get involved in on-budget matters and so was no longer able to take up government securities, at a time when the commercial banks were running away from both short-term and long-term government securities. This meant that the Central Bank had now positioned itself to be the main financier for government’s excessive spending.

The part-time lecturer in economics at UWI, Cave Hill, said that Barbados was now delicately poised and what was going on now was what had happened in Jamaica in the 1970s since Barbados was at a stage where government was spending $500 million more than it was earning. Barbados had already been categorised as being near ” junk bond status”, a condition in which it had never been before.  Follow the link for video of the Opposition Leader’s Presentation:  http://www.youtube.com/watch?v=RwlrGlGiXbs

 BETTER MUST BE DONE!

BLP Legacy: First celebration of Emancipation Day on August 1, 1997;established a Facilitation Unit for Returning Nationals to streamline their return home with duty free movable assets; and rejected the USA’s acrimonious Shiprider Agreement to successfully negotiate an arrangement which respects Barbados’ sovereignty and independence.
 
Minding other people’s business
At first the temptation was to regard the frequency with which Irene Sandiford-Garner has sought to “take up the firerage” of women whom the DLP alleges have been “unfaired” within the BLP, as attempts to deflect the public’s attention from the colossal failure that her assignment to the Queen Elizabeth Hospital (QEH) has clearly been.
 
For we well remember that in March 2010 when Senator Sandiford-Garner was shuffled to the Ministry of Health as Parliamentary Secretary, her specific responsibility was to oversee improvements in QEH operations and determine whether enhancement would be through on-site refurbishment or the building of a new facility elsewhere.And the QEH languishes.
More than 18 months later the public is no wiser as to the long-term future of the QEH, while the meagre improvement works there have been enveloped in controversy over contracts for air conditioning,  and electrical operations. There are other matters such as reported cost overruns , failure to keep completion dates and the mysterious disappearance of equipment. DLP’s abysmal record
But her most recent utterances have made it clear that instead of directly criticising the BLP she was in a roundabout way really lashing out at the DLP, clearly conscious of how poorly her party had treated its women compared to the BLP’s outstanding record in this regard. How else can one understand her statement that “it could happen to anyone of us who would wish to step up”
 
First female Cabinet Minister in 2008Sandiford-Garner must have been remembering that in the 15 years in government (1961-76 ) the DLP never made a female a  Cabinet Minister, even though Senator Odessa Gittens and Mrs. Gertz Eastmond, MP had been Parliamentary Secretaries, with the latter being patronisingly told by her leader Errol Barrow that he would have to “teach her the facts of life” when she tried to assert herself. Back in government for 1986-94, the DLP again did no better than to make Mrs. Maizie Barker-Welch ,MP a Parliamentary Secretary, only seeing it fit to elevate two women to Ministerial status in 2008.The BLP blazes trail with women.

        But the BLP’s leadership in championing the women in politics is unmatched. It started with the first General Election under Universal Adult Suffrage when (Dame ) Ermie Bourne became Barbados’ first female MP, and the party never looked back. Back in government in 1976 (Dame) Billie Miller became the country’s first female Minister, and between 1994 and 2008 Owen Arthur appointed five female Ministers, Billie Miller, Mia Mottley, Liz Thompson, Lynette Eastmond and Cynthia Forde. In that time the BLP also had two female Deputy Prime Ministers, Billie Miller and Mia Mottley, with Miller later becoming the first female Senior Minister.Yet another broken promise.

 
The BLP has had Billie Miller as Chairman, while the DLP is yet to elect its first female President. The DLP’s 2008 Manifesto pledges  to work “towards having 50 % of the DLP slate female by 2016″, only to have four female  candidates now, the same as last election. Again the BLP leads with five females. What female mirror image do you have of yourself, DLP?  

BETTER MUST BE DONE!

The Central Bank Governor of Barbados has given his Review of the Barbados Economy for the six-month period: January to June 2011 and Barbadians are now in a much better position to judge for themselves whether the Internationally respected – Moody’s Rating Agency – was on a witch-hunt or whether it was justified in its downgrade of Barbados’ Credit Rating, and the forecast it gave on Barbados prospects for the next 18 months.

The other two issues that should be on the minds of ordinary Barbadians are, the Government’s Medium Term Fiscal Strategy (MTFS) and the Budget or the economic policies the DLP Government has so far outlined.  Even at this stage, it is crystal clear that the DLP is even failing to meet the targets outlined in that MTFS, while it is also painful that its economic policies are not working and will not work.  In short, Barbados is in peril and on a fast free fall from prosperity to crisis and at a time when the DLP does not know what to do.

When you compare what Moody’s said with what the Central Bank Governor has said and would not say (in the context of what past DLP Budgets and that MTFS was expected to have done but have not and will not achieve) you begin to realise that the crisis in Barbados seems far worst that this global financial crisis and the one in the 1920’s combined.  What is happening in Barbados was foreseeable and preventable but it was manufactured, in large part – as a result of entitlements without the matching creation of enterprises! 

A competent Government, with a Team who has well-honed skill, would have steered Barbados away from this – as has the Government of Guyana and that of Indonesia, which – despite that country having had several earthquakes, tsunamis’, floods and mudslides – still records some 5.5% growth.

We now know that despite a 2.5% increase in VAT, receipts are down by 2%.  Could it be that the base of the economy is shrinking (some 10,300 unemployed since January 2008) and that Barbadians are taxed to the max?  Whatever the real reason, the Barbados economy is in crisis and Barbadians must be worried, especially since it is now known that neither the DLP’s best plan (it’s MTFS) nor its economic policies, are working.  Barbados is adrift! 

Increased taxation was intended to close the gap between revenue and expenditure but that gap has widened.  The deficit was supposed to come down but it has grown much bigger.  This tells you that in circumstances where revenue is not coming in, the economy could not be growing and that in-fact, the base is shrinking.  So what exactly would have spurred that alleged growth?   All the Central Banks Governor has done is confirmed that the Moody’s downgrade and the Standard & Poor’s caution – are justified. 

The up-coming Budget is therefore a non-event because the economic policies introduced by the DLP did not work.  The economy is not growing and the country is incapable of any further taxation.   What we also know is that as was stated by Moody’s and now confirmed by the Central Bank Governor’s Report, not even the next 18 months but the next six month in Barbados, will be dread.  So that, when the DLP tells you that it will now seek to do through the up-coming Budget – what the MTFS failed to accomplish, you know that it does not know what it is doing and that it (the DLP) is engaging in a mere time-wasting exercise.

This brings me to the story of Greece and why it was finally allowed to join the EU.  A few weeks ago, concern was raised that the view of the Barbados Statistical Services Department and that of the Central Bank – differed significantly, as regards true state of the Barbados economy.  Whether Barbados has a Government it can trust, is one thing but a Government it can no longer afford, is an entirely different ball-game.

This link should therefore make interesting reading:

http://www.telegraph.co.uk/news/worldnews/europe/greece/7646320/Greece-why-did-its-economy-fall-so-hard.html

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�These are but some of the foreseen dire consequences ignored by a DLP government more intent on pleasing the IMF than accepting sound local advice, The BLP supports reform of the Drug Service but not one that is botched and rushed at the expense of the public that had seen much better in this and other areas from the BLP and other previous administrations.
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Please take part in our online poll on prices at www.blp.org.bb and prepare for our sizzling summer cruise “Bees on the Seas” June 25th, 2011 10.00 p.m – 2.00 a.m MV Harbour Master

By a very wide margin, the economic crisis which faces the country stands out as the matter which merits the greatest focus at this time.

Members of the Economic Policy Team of the Barbados Labour party have therefore been assembled to provide a perspective on the critical economic and financial issues with which the country is challenged.

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1. 1.����� SUPPORT FOR NATIONAL RESPONSE TO RECENT CHALLENGES TO THE INTERNATIONAL BUSINESS AND FINANCIAL SECTOR.

�

We propose to be constructive and will avoid opposing merely for the sake of opposing.

Hence, we wish to begin by pledging the support of the Barbados Labour Party Opposition for any Legislative initiatives and other programmes that may be proposed and undertaken by the Government and the Private Sector to fend off two new recent challenges by the OECD/Global Forum, and the British Government that can imperil the successful functioning of our international business and financial enterprises.

At the turn of the century, we had to mount a major campaign to prevent the OECD from blacklisting Barbados as an uncooperative tax jurisdiction.

We were successful in that campaign to the point where Barbados was placed on the OECD�s white list as a jurisdiction which meets the highest standards in relation to the exchange of tax information, and the level of transparency on which we insist regarding the behaviour of our international business and financial enterprises.

Barbados is being challenged again, and in a way that can significantly disrupt the development of our international business and financial sector.

A recent OECD/Global Forum Phase 1 Assessment of the transparency of Barbados� arrangements regarding the exchange of tax information, has effectively placed Barbados in a category of countries which do not meet OECD standards and hence puts our nation in a position of having to once again face the threat of being stigmatized as an uncooperative tax jurisdiction.

We do not share the view of the OECD, and hold that its position is based more on form than substance.

The Government has signaled its intention to shortly amend the Income Tax Act to enable it to exchange tax information with countries with whom it has initialed or signed new Bilateral Tax Treaties, but where the Treaties have not been ratified by the other Contracting Parties.

The Barbados Labour Party Opposition will support any reasonable initiatives to safeguard the operation of our second most important sector.

An agency of the British Government (HMRC) has recently classified Barbados as a Category 3 Country for its perceived inability to meet OECD standards on the exchange of tax information, and in so doing has stigmatized Barbados as a country from whom it expects difficulties in obtaining information on tax evasion.

This runs entirely counter to both the spirit and letter of cooperation between Barbados and Britain on tax matters since out Treaty for the Avoidance of Double Taxation was signed in 1970.

This matter is made especially threatening for Barbados because penalties amounting to 200% of the tax evaded by enterprises judged to be non-compliant in respect of the payment of income and capital gains tax are now intended to be applied on British firms operating in Barbados in accordance with the UK 2010 Finance Act.

We are aware of the efforts that have been made to bring the tax exchange provisions of our 1970 Tax Treaty with Britain in line with the standards set by the OECD 2008 model Agreement.

We therefore believe that the actions proposed by the British Government are unnecessary, draconian and, unaddressed, will do great damage to the Barbados economy.

Again, we will support the national effort to fend off this economic threat.

1. 2.����� THE STATE AND MANAGEMENT OF THE PUBLIC FINANCE.

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The BLP Opposition wishes to voice its very strong concern regarding the state and the management of the public finances, and to call upon to Government to take a drastic change in the course and the manner in which it is managing the country�s economic and financial affairs.

Late last year, when the �Budget� was presented, the Government was on course in that income year to realizing a deficit of almost $540 million in its capacity to meet its operating expenses.� This does not include the addition to its deficit that comes from its spending on capital projects.

Such a deficit cannot be sustained.

Government sought to address this by a series of measures which would amount to just over $150 million in a full fiscal year, leaving over $380 million in further adjustments to be soon undertaken by yet unspecified tax increases and expenditure cuts.

Since then the Government has brought to Parliament requests for supplementary expenditure amounting to $141 million, and has provided Guarantees for loans in excess of $329 million, most of which are unlikely to be paid by the entities on whose behalf the guarantees have been issued.

It is also highly probable that additional requests for supplementary spending will be brought before the end of the financial year.

By such measures, the Government has added and is continuing to add to the extent of the financial crisis with which it will eventually and soon have to deal.

In all of this, there is no evidence of any recognition on the part of the Government of the need to bring its spending under control.

Instead, it is going in the opposite direction and at a pace which, unchecked will undermine the economic and financial stability of our nation.

During the Budget Debate, we proposed that a Special Commission be established to make recommendations pertaining to the adjustment of Government expenditure in a way that would protect the vulnerable, enable us to continue to meet strategic national economic goals, and to help bring the fiscal deficit down to manageable proportions.

We pledged that the Opposition would help to shape a national consensus on the adjustments to be made to Government expenditures, on the receipt of the recommendations of the proposed Special Commission.

Regrettably, this advice has been ignored, and Government continues to act unilaterally on the matter.

We remain also greatly concerned that in addition to the increased spending that has been sought through supplementaries, there are a number of other financial commitments which the Government has made or will have to face in the immediate future that could weaken the country�s public finances.

Chief in this regard is the proposal by Government to acquire and to spend substantial sums on the development of the property at Sam Lords Castle.

We see no justification for public expenditure on such a project, and urge Government to abandon its plans for acquisition, especially since we are aware that they are reputable and well funded private investors who have an interest in making the investment themselves.

Government also needs to spell out a financial plan as to how it will treat to commitments that it cannot escape and which will affect public spending in the near future in respect of the settlement of matters such as:

• CLICO
• 3 S Project
• Pierhead Marine Project

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Economic growth and development best take place in an environment of confidence based on the soundness and predictability of Government�s policy formulation and implementation.

On recent evidence pertaining to the treatment of the VAT on Hotels, access to education at UWI and the treatment of entertainment and travelling allowances, the Government of Barbados� formulation and implementation of its policies have entered the realm of the erratic.

This is exactly the kind of approach to management of Barbados� economic affairs which the country cannot afford.

In addition, the new taxation arrangements relating to allowances have already started to impose great hardship on taxpayers who face the additional stress of having to accommodate the increase in the VAT and Excise on their already distressed circumstances.

We urge that whenever possible, some relief is offered and we wish today to propose one.

1. 3.����� REMOVAL OF UNNECESSARY HARDSHIP CAUSED BY ENERGY PRICING POLICY.

�

In the recent Budget Presentation, the Excise Tax was increased by 50% on gasoline.� At the same time the VAT was increased from 15% to 17�%.

These increases were put into effect at a time when the price of energy products is rising internationally. ��Also, the VAT is paid on the value of the product which includes its CIF value and the excise tax.

This arrangement means that whenever the CIF value of energy products increases, the additional amount paid by the consumers not only pertains to the change in the CIF value itself, but also includes an additional amount of Value Added Tax that accrues.

The prices of energy products are therefore being inflated in part by the tax take of the Government.

This arrangement is taking a toll on the consuming public.

In 2006, the Barbados Labour Party Government faced with a similar scenario committed itself to the following policy which it faithfully followed:

�In the event that the price of crude oil continues to increase, the Government will reduce the excise tax to ensure that the tax take on energy remains the same.�

We wish to recommend that the Government adopt the position as stated in 2006 to bring relief to the consuming public.

1. 4.����� GROWTH AND DEVELOPMENT.

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The possibility of growth this year by the Barbados economy will require an extraordinary and bumper performance by the tourism sector.

This is so for the following reasons.

The tax policies being pursued by Government virtually rule out any possibility of growth accruing from increased spending by consumers.

The adjustments that Government will have to make to reduce its own spending will not create an environment conducive to growth.

In addition, the major private capital investments frequently cited by Government as being capable of kick starting economic activity, are not ready nor available for such a purpose.

As such, a burden will fall on the tourism sector not only to restore its former vibrancy, but to perform at a level to compensate for the shortfall in activity in other sectors of the economy.

The early evidence from the present winter season does not justify any confidence that such will be realized.� Our Tourism Team will address this.

Four years of economic stagnation will hold disastrous consequences for our ability to maintain the quality of life of our people.

In addition, strains are already being felt in the financial circumstances of even some of the major private sector enterprises.� The capacity of the private sector to contribute significantly to the resurgence of growth and national development is being substantially reduced by the effects of this persistent recession. A profile is provided of the recent financial performance of some of our major enterprises.

The Government has to stop using the excuse of global recession as an explanation for the lack of growth in Barbados. The international economy grew by almost 5% in 2010, and is slated to grow strongly this year.

Barbados needs to be put back on a path of growth and development as the only feasible means by which the extraordinary crisis in the state of our public financing, the crisis in the financial circumstances of households, the deterioration in the financial position of firms of all descriptions, and the emerging crisis regarding the creation of employment can be simultaneously addressed and resolved.

We know of no feasible plan to address these urgent matters as one undertaking.

In the circumstances we judge that great value can accrue from the convening of a Special National Engagement to settle on a National Recovery Programme.

Economic crisis does not recognise nor respect political distinction.

The Barbados Labour Party Opposition therefore commits that it will participate fully and constructively in any such Special National Engagement intended to develop a Recovery Strategy to bring our nation out of this economic crisis that threatens the very foundation of Barbados� stability and progress.

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