Prime Minister Mia Amor Mottley has defended Budget proposals which have been criticised over the last two days.
Wrapping up debate Wednesday night in the House of Assembly, she spoke about the Pandemic Contribution Levy, Pension Reform, and the increase in water rates some farmers will be paying.
The Minister of Finance and Economic Affairs said the levy, which takes effect from July, was not retroactive and furthermore, based on information from the Central Bank, commercial banks could afford to pay it.
“I’m aware there are some people who are a little uncomfortable and who have chosen to describe the Pandemic Contribution Levy as inappropriate, as a slap, as retroactive. Let me deal with it in very calm and measured tones. This is a levy first and foremost; it’s not a tax, it is a levy. The language is very, very clear.
“Secondly, it starts in July. There’s nothing retroactive about the levy. The base which it refers to it is not an income tax or corporation tax. It is a Pandemic Contribution Levy that will be governed by its own legislative instrument which the Attorney General will help us bring to his Honourable Chamber. It chooses the only measurement that it can choose – the pandemic. When does the pandemic start and when have we chosen to end it? I could leave it open ended and let it go into another year instead of letting be a one off [levy],” said Mottley.
She stated Government “does not want to increase the cost of doing business” and believes the tax measures were “sufficient once growth comes back to finance” its activities.
The Prime Minister told the Lower Chamber that audited financial information related to the banks’ domestic performance, specifically their net income after tax for financial years 2017 to 2021, showed a profit in most of those years.
In 2017, it was $165.4 million; in 2018, “because of the debt restructuring, “they lost $71.9 million”; in 2019 a profit of $83.6 million was recorded; and in 2020, “in the middle of a pandemic, when the uncertainty was at its height, the banking sector made $97.346 million net income after tax according to the financial year” she said. Last year’s figures stated some $146.43 million was recorded.
Meanwhile, as it relates to the announced pension arrangements, Mottley repeated the proposal would see all new public workers attaining the maximum pension after 40 years of service instead of the existing 33 1/3 years and a public education programme about the pension reform will be undertaken.
About the increase in water rates which some farmers have bemoaned, the Prime Minister said she stated that “upfront”.
She noted “… in spite of that amount being 66 cents for 220 gallons of water and people earning from it, the receivables of the BADMC [Barbados Agricultural Development and Marketing Corporation] are incontrollable and inexplicable and we can’t afford it anymore,” she said, adding its core business is not the provision of water.
Mottley reassured the public her administration will “continue to shield those who must be shielded but reach for the skies in terms of growth”. She said while she might not get all the new initiatives done, “I will die trying and I know I gine come close” as will the members of her Cabinet and parliamentary representatives.
“This is the collective representation of the Barbadian spirit, and we are duty bound to reflect it in our decisions. We have not chosen the hand that we have but we shall play the hand that we have the best way we know, fairly, honestly, and with pride because we know that if we do it to the best of our ability that we will do well and we will carry as many of our people with us as is our obligation,” said the Prime Minister. (GBM)