Last Updated on March 20, 2023 11:43 am by Editor
If there is one thing that was not disappointing in this year’s budget speech is its length. In a speech that began at 3.00 pm and lasted for 4 hours and 13 minutes, by our reckoning, the PM of Barbados delivered her budget for fiscal period 1 April 2023 to 31 March 2024.
The pundits at Cave Hill and their associates came out hours before the delivery of the budget on state radio to demonstrate their economic wisdom with projections and expectations around the tired mantra of economic growth.
Budgeting Process
Before we examine the 2023 budget, we need to remind ourselves what the annual budget is all about. It is the government’s Income and Expenditure Statement in which the citizens are advised about how much revenue or income the government is going to raise from taxes, charges for its services and from other sources as against how much it is going to spend on salaries and wages, services, capital expenditure, etcetera.
By way of simplification, if the budgeted revenue exceeds the budgeted expenditure, then we have a surplus. On the other hand, if the expenditure is greater than the revenue, we have a deficit which means that the government must find additional finds to execute the budget for the coming financial year which starts on 1 April.
It is important to understand that revenue does not include borrowings from the IMF or any other institution for that matter. This is a simple accounting principle which is adhered to in public sector accounting.
But if the budget is in deficit, the government usually has to borrow money to make up the shortfall in revenue. The alternative is to default on loan payments.
Primary Budget Surplus
This year’s budget has been designed to produce a primary budget surplus which is not the simple difference between revenue and expenditure stated above. A primary budget surplus occurs if debt payments – or amortization as it is called in accounting theory – are removed from total expenditure and the resulting level of expenditure is less than the projected revenue. That is what is shown in Exhibit 1.
Take note that the amount of amortization or debt repayment represents a whopping 40% of projected revenue. What that means is that $40 out of every $100 of revenue must be assigned to the payment of debt alone leaving $60 to pay salaries, provide services etcetera.
The GDP Issue
The economics establishment likes to express budget surpluses and deficits as a percentage of GDP. Since the GDP is usually a much higher figure than the revenue of a period, the resulting ratio gives a smaller percentage which masks the actual cash flow implications of the budget deficit or surplus.
However, as the PM herself indicated in the budget speech, the GDP of Barbados has to be remeasured. This suggests that the current measurements are suspect at the very least. In any event, GDP is a notoriously problematic economics ratio which is becoming less and important even to the IMF.
So, the Primary Budget Surplus is only comfort for fools because the figure represents an amount available, ONLY on the assumption that loans will NOT be amortized or repaid. In other words, unless the government is planning to default on loans in the coming year, the harsh reality is that there is an overall deficit or shortfall of $841.9 million as shown in Exhibit 2. That is the amount needed to balance the budget for the 2023- 2024 fiscal period.
Assessment
The summary assessment of the Barbados Liberation Front is that the 2023 Budget is an Appeasement Budget. From a policy perspective, it did not rise much beyond a regurgitation of the BLP’s 2018 election manifesto and its extension for the purposes of the 2022 snap election.
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Typically, the budget is the place where the Minister of Finance is expected to detail how the budgeted revenue is to be achieved and what specific policies are to be pursued to keep expenditure at planned levels outlined in the estimates which precede the Budgetary Statement and Proposals.
It is only in the last half an hour that the PM attempted to address specific line items in the budget and let us in on specific proposals. Although it is traditional to do so in the budget, the PM has not mentioned how much the increases in public sector wage bill will cost the treasury.
As the pundits easily predicted from the estimates, there were no major changes in direct taxation. However, some adjustments in the taxation base have occurred, for example an increase in the maximum pension allowed from $40,000 to $45,000 and the reduction in the regional travel tax from $37.50 to $20. Pensioners will be grateful for that because it does not make sense to us to pay taxes on pension, anyhow!
In our view, the earlier acquiescence of the government to the demand of civil servants for an increase in pay and the provision of access to public sector vehicle loans for nurses in the budget itself are all appeasements designed to stave off the kind of worker unrest being experienced across Europe, particularly in France and the UK.
Bajans are prone to short-term thinking and short-term satisfactions. Therefore, it is appropriate to ask: what will be the price for these concessions and appeasements?
Our suggestion is that the price will be the unswerving compliance of the public sector with the big foot moves the government is contemplating especially with respect to enforcement of the flawed Barbados Identity Management Act 2021 and ID card, impending amendments to the Computer Misuse Act and other pieces of legislation that Barbadians are likely to find unpalatable such as the legalization of same sex marriages over which the formal leadership of the church is still divided.
In this regard, the proposal to provide funding to particular church denominational groups should probably be treated as an attempt to further subvert the Christian church. The same can be said of the proposal to clean up the cemeteries across Barbados.
Cemeteries fall under the SSA. Therefore, we have to interpret the presentation of this proposal – making the living feel more comfortable connecting with their departed loved ones – as a veiled attempt to mainstream her version of ancestral worship which is a pivot to her African audience. At the same time, it can be construed as a bid to perpetrate emotional blackmail on the churches which are intimately connected to the business of dealing with death and cemeteries.
It is regrettable that we have to imbue what should otherwise be considered as routine or benevolent acts with such sinister motives. But the fact of the matter is that we are dealing with an individual whose track record and declared philosophical position leave us with no other option but to be vigilant.
Speaking generally, the church as an organized body in Barbados failed its members once by acquiescing to the covid-19 pandemic protocols. There are still churches where some of those protocols are in place. Ever so often you still see churchgoers wearing masks notwithstanding that fact that it has been demonstrated that masks are totally ineffective against respiratory diseases such as covid-19.
It will be very interesting in the next few days and weeks to see reaction of the established church hierarchy to these overtures of the PM who is not letting any opportunity slip to exploit her position as Minister of Ecclesiastical or Religious Affairs bearing in mind that “reaction” includes silence which has been the response of much of the so-called established church in recent times.
Fortunately, the church of Jesus is not an organization but an organism whose head is Jesus himself and who is not limited by the failings of the self-appointed leaders of the visible church organization. Any member of the ecclesia (the called-out ones) can speak to the ills and problems of society as led by the Spirit of Jesus as many have already done and will continue to do in this country.
Matters Arising
It is perhaps exculpatory for the Attorney General, to hear the PM admit that there is a shortage of legal draftspersons across the Commonwealth Caribbean and in Barbados by implication.
For more than a fleeting moment some of us wondered whether the drafting of some of the recent legislation – for example, the Barbados Identity Management Act 2021 or BIMA 2021 as we call it – had been outsourced to one of the many online legal experts or to some local intermediary as was done with covid-19 vaccines.
If you are going to spell “fingerprint” as one word in one section of an act and as two words in another section, we submit that the training required by the legal draftspersons in the Attorney General’s office is much more fundamental than we think!
Our simple question is: Where is the training and associated incentives for legal draftsmen and draftswomen so that we can begin to eliminate some of the rubbish coming out of the Attorney General’s office?
The need to have up-to-date legislation cannot be denied but the unholy haste with which the government is pursuing the updating of legislation without the appropriate resources is scary.
We cannot end our brief response to the 2023 budget without dealing with the issue of “sustainable farming practices” as used by the Minister of Finance and the idea of the Blue Green Economy.
Given the recent experiences of the Dutch farmers and the people of Sri Lanka with the idiotic faming policies of the New World Order or Great Reset, we now have to wait see what “sustainable farming practices” will mean in Barbados. Will it mean the abandonment of the use of traditional fertilizers as advocated by the proponents of the New Green Deal which has severely disrupted the food supply of the people of Sri Lanka?
The PM is a committed globalist. By definition, that means she is in principle committed to the concept of sexual transgenderism, the notion that there is a climate emergency, the use of expensive green energy and the control of society by digital technology. The other 29 members of the are willing stooges whose priority is keeping their “little pick” rather than standing up for what is right.
Nevertheless, we compliment the PM for her ability to exploit the global preoccupation with the idea of climate change – a phrase which by definition is a misnomer. The boast that she has been able to wring several million in grant funding out of the global supply of funds for the mitigation of climate change disaster is an achievement. It is really the best accomplishment since the notion of reparations which has not got anywhere beyond the amounts paid out to the families of slave owners for loss of their slave assets!
But given her commitment to the principles of the New World Order, it is relatively easy to understand how the PM in one breath can preach the enfranchisement of Barbadians while in another breath, order the Attorney General to prepare legislation intended to strip the country of more of its national sovereignty, relieve Barbadians of their traditional freedoms and encage them in a digital straight-jacket.
Conclusion
While we admit that budgeting is not an exact science, perusal of recent parliamentary records will show that this government has come back time and time again to parliament with supplemental bills to augment the budget.
Our summary assessment is that the 2023 budget is not only an appeasement budget but one that is incomplete. Therefore, after we suffer the 30-minute diatribes of the other 29 members of the house over the two days following the budget, we will not be at all surprised if the Minister of Finance and Ecclesiastical Affairs comes back to parliament within the next six months or so with a mini budget.
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