PEP’S RESPONSE TO THE BUDGET

Yesterday, the Democratic Labour Party administration and their new Minister of Finance forgot that Barbados is a society and not merely an economy!

More particularly, they forgot that poor people are human beings too, and are subject to the same material needs and aspirations as the upper middle class and wealthy of our society.

Furthermore, they forgot that the dominant organising principle of modern civilization is "democracy", with its emphasis on engineering a gradual equalisation in economic enjoyments across social class lines.

We are convinced that they ‘forgot’ all of these fundamental principles because how else can one rationalize a Budget that makes virtually no effort to require the wealthy and comfortable members of society to bear the burden of fiscal adjustment, but instead places the burden squarely on the backs of the large mass of working-class Barbadians.

There are tens of thousands of poor, working-class Barbadians who are barely surviving on wages of less than $300.00 per week and minimum pensions of less than $160.00 per week. And yet, Mr Sinckler and his colleagues now expect them to bear the additional burden of a 2.5 per cent increase in VAT, a one-third increase in bus fares, and an increase in gasoline prices that will bring in its wake an additional across-the-board inflation in local consumer prices.

In the DLP’s new vision of Barbados they apparently see no difficulty in asking a Barbadian earning $160.00 per week and a Barbadian earning $1,600.00 per week to bear the same additional financial burdens!

Indeed, not even advanced age seems to make a difference any more, for they have now decided that impoverished old age pensioners suffering from chronic and other diseases will henceforth be required to pay substantial sums of money for their medication. Either that, or they will have to find the taxi fare, bus fare, time, strength and effort to make their way to one of the few and far between government dispensaries to get their on going medication. Surely, Mr Sinckler must know that this will prove to be extremely difficult if not impossible for many poor, elderly Barbadians who now find it difficult enough to make their way to the private neighbourhood pharmacy!　

The fundamental point that the Peoples Empowerment Party wishes to make is that if additional tax revenue had to be raised, then the first place to go for such revenue should have been the wealthy and comfortable sectors of the society.

Some three weeks ago we issued a Press Release in which we advised as follows:-

"The sectors that must be asked to bear the increased tax burden must be the wealthy and the big corporate sector.

Indeed, what we would simply need to do is to roll back a portion of the tax cuts that former Prime Minister Owen Arthur gave to the wealthy and to the corporate sector during his 14 year reign.

We refer to Mr Arthur’s 1995 "Group Tax Relief" which permitted tax losses incurred by a company that was a member of a group of companies to be set off against the taxable income of other members of the group. We also refer to the reduction of Corporation Tax from 40 per cent to 25 per cent, the reduction of income tax on the wealthy from 25 per cent to 20 per cent, the 35 to 60 per cent reduction of income tax on personnel employed in International Business companies, and to the removal or reduction of taxes on yachts, marinas and luxury cars.

The wealthy individuals and corporations that benefitted from these "Owen Arthur tax cuts" must now be called upon to give back some of this wealth, in the national interest!"

This would have been the correct place to start. Unfortunately, it does not seem that Mr Sinckler even gave any thought to this option.

The late Errol Barrow and the old DLP understood the concept of "progressive taxation" under which the wealthy is required to bear the brunt of the burden, and the concept of "regressive taxation" under which the poor masses bear the brunt. Sadly, it seems that Mr Sinckler and the current DLP have forgotten the concept of "progressive taxation".