Finance Minister Chris Sinckler says government will lay out in coming weeks a plan to deal with government’s economic and fiscal problems, even as he challenges the opposition, the private sector and even the unions to say how they would deal with these issues.
But he’s hinted at some of the adjustments likely to be made in an effort to cut government spending, trim the deficit and increase revenue including further adjustment to the tax bands and requiring government workers to contribute to their own pensions which are now completely funded by the state.
Mr. Sinckler was leading off debate on the 2017-2018 government estimates of revenue and expenditure in which he also called for a national conversation on the serious challenges facing the country, urging that politics to be put aside. “The government is going to lay out a very comprehensive plan very shortly, before the end of May, the government is going to lay out a very comprehensive plan as it relates to some of these issues.”
And he indicated some of the changes that could be coming, he said, “but we have an unfunded pension scheme that has now reached, projected, $270 million or 3 per cent of GDP at market prices of $9.5 billion dollars, but you know what? That practice has spawned itself into the statutory corporations too. There are some statutory corporations that have pension schemes that aren’t funded — CBC — these are the things that have to be addressed!”
He has also hinted at an increase in income tax.
Mr. Sinckler also notes that salaries and wages of government employees represent $1.3 billion dollars of government expenditure indicating he regrets that cutting public sector salaries by ten percent is no longer an option as it was made unconstitutional by the last government.
Government is projecting total expenditure of $4.5 billion over the next financial year, with current revenue estimated at $2.9 billion, leaving a shortfall of $1.5 billion.
The finance minister says that while some inside and outside the country are performing the last rights on Barbados, Barbados will not fail. And he declared that government is prepared to take the tough decisions.