Minister of Finance Chris Sinckler is now totally out of his depth in terms of his leadership of the economy.
This was the strong suggestion made Wednesday by one his predecessors – former Prime Minister Owen Arthur – who accused Sinckler of “bungling” his own recent Budget announcements and of creating a mass of economic confusion and uncertainty in the country.
Arthur was responding to reports that Sinckler, on the heels of his May 30 Financial Statement and Budgetary Proposals, was now promising to undertake a review of the $542 million austerity package he announced in Parliament a mere three weeks ago.
This is with a view to offering relief, where possible, to members of the private sector who are bitterly opposed to his plan to massive increase in the National Social Responsibility Levy from two per cent to ten per cent, as well as to impose a two per cent levy on foreign exchange transactions.
While warning that the tax on foreign exchange rate transactions may eventually be deemed a non-starter, Arthur complained that with the July 1 implementation date for the new levies fast approaching, there was still way too much uncertainty surrounding the announced fiscal measures.
“We are in danger of having our economic policies characterized by an absence of clarity of purpose and certainty of incidence,” he warned, while pointing out that it was not only the measures, but also the process by which they were to be implemented that was now the subject of great confusion.
“What is also important is that this process of consultation is now taking place after the policies have been conceived, announced and are intended to be implemented. And consultation after the fact could hardly be regarded as the way in which you conceive of economic policy and seek to implement economic policy,” he added.
In criticizing Sinckler’s handling of the entire Budget process and his handling of economy as a whole, Arthur noted that Prime Minister Freundel Stuart had recently commissioned a tripartite committee, led by the head of the Private Sector Association Charles Herbert, to develop policies, which were submitted by way of a report to Government.
However, Arthur said those policies seemed not to have entered into the consideration of the Minister of Finance in any significant way in the conception of his budgetary measures.
“So that you have a situation which is now beginning to border on a farce,” he told Barbados TODAY.
“The report of the private sector and the Social Partnership has not been acted upon, policies have been conceived and announced that are to become in vogue and now we have a different and new process of consultation after the fact, and all it [will] do is to generate that complete aura of uncertainty, which is the only thing that you don’t want to have at a time of great economic peril,” he said.
Arthur, whose tenure as prime minister and minister of finance between 1994 and 2008 was marked by economic prosperity, stressed that with the economy currently on its knees, now more than ever “we need to see the restoration of confidence in the management of our economic affairs through the restoration of competence”.
However, he lamented that this was “completely at variance with the current level of bungling being exhibited by Sinckler and the Stuart-led administration as a whole.
“I wish the Government well, I wish the minister well, but I don’t know why we are now in this position of having these efforts to change that which was so recently put into effect,” the former Barbados Labour Party leader said, while emphasizing he was never faced with any such eventuality in his 14 years as minister of finance.
He also warned that the authority by which the minister introduced measures under the provisions of the Collection of Taxes Act in the House of Assembly on May 30 was not to be tinkered with, and that Government’s announced tax on foreign exchange rate transactions may be seen by the International Monetary Fund as a restriction on exchange transactions and may have to be removed.
‘The whole thing is adding to uncertainty and the sooner the matter is brought to a happy resolution, the better,” he said.