No ease for the lower classes
THE PREVIOUS ADMINISTRATION borrowed money, put people out of work and raised taxes, failing to fix the economy.
So what are we seeing now? Borrowing more money, putting more people out of work and raising more taxes on ordinary working people who are struggling with no raise in years.
Oh, one more thing: they took money away from older persons who had saved for the retirement or for future large purchases, such as replacing an 18-year-old car, and won’t pay it back for 15 years.
I wonder if the new contracts for road repairs include a portion of the contract payments being made in bonds which they will not be able to cash in for 15 years; or how many of the new ministers agreed to accept part of their big salaries in bonds to be collected in 15 years, since most of them are younger than the over-60s being penalised for saving and could afford to wait for their money.
The National Social Responsibility Levy (NSRL) has not come off anything.
In fact, prices have gone up.
The Government claims it has to look at inflation to see if that is the reason.
I left the only last General Election meeting I attended, in Rendezvous, when the speaker said that an increase in the fuel tax would not result in inflation. Any accountant who has done costing, or had to watch prices when the economy was slow, knows that the biggest contributor to inflation is oil prices. The new taxes, especially the tax on water – I never thought I’d see the day a “Labour” party would tax water – create inflation.
If the minister thinks businesses pay these taxes, they should spend a month working in accounts at one of the food distributors. I have tried repeatedly to educate about corporate taxation. The only tax companies pay is corporation tax and every other tax is passed on to the consumer in the cost of the goods you buy.
People pay their fuel tax, they pay their sewerage tax and their garbage tax. They also pay the fuel, sewerage and garbage taxes of every business where they shop. You pay the land tax, employer’s National Insurance, fuel tax,
VAT and every other tax you can think of for the importer, or manufacturer, the distributor and the supermarket retailer, every time you buy your groceries. Put up taxes and you create inflation.
In the last SUNDAY SUN, columnist Albert Brandford said that there is “a quiet rebellion on austerity measures”. The only thing “quiet” about the rebellion is that people are afraid to speak publicly for fear of victimisation. Conversations in private are not quiet.
He also claimed that the problem is that the party did not prepare the country for austerity. He is wrong. We knew some cuts were necessary, but we thought they would be more fairly distributed. The problem is that whilst the lower and middle middle-class are being hit with austerity, the elite professionals, big businesses and upper middle to upper economic bracket are not affected, or are able to pass their “austerity” on to others by increasing prices and fees, cutting staff or reducing pay.
Barbados had a brief 30 years of independence between 1966 and 1996, after which we returned to colonisation. Only this time, we became colonies of the regional and international multinationals which have taken advantage of changes in legislation (called liberalisation) and taxation policies pushed by right-wing groups which have been adopted by the last three, now four, administrations.
When I wrote a criticism of
VAT in early 1997, I received a very surprising call from a senior member of the Barbados Labour Party, one of my father’s colleagues whom he highly respected. What he said shocked me and I know it would never be said publicly.
He said I should not complain because it was their intention to “level the playing field” on taxes, to distribute them more widely, and once the VAT revenue came in, taxes on people like me and my family would be reduced. What he did not understand was that none of my family was in the tax brackets he anticipated.
I was the accountant at a popular restaurant between
2001 and 2011 and in charge of maintaining the payroll programme. I personally put through the PAYE and NIS changes on the payroll each January from 2003 to 2007 thereafter. I saw personally the changes which took place as he had predicted.
What I did not know until last year, as I was not doing corporation tax, was the huge (37.5 per cent) reduction which was granted to the largest businesses between 2004 and 2007. Just months before the financial crash in 2008 (which resulted from the same right-wing liberalisation and tax policies in the United States and United Kingdom), these corporations received a huge gift from the Government.
Brunt of suffering
Despite all the hardships and tax increases working Barbadians have suffered since 2008, no sacrifice was asked of those who benefited the most from the transfer of the tax burden downward by means of VAT, as was promised by my father’s friend.
In the Mini-budget in June, Prime Minister Mia Mottley asked these corporations to pay only five per cent more, not the 15 per cent they were refunded for ten years, whilst ordinary working people have again been asked to bear the brunt of the suffering. Now they are being asked to swallow the “inflation” caused by the new taxes which have effectively replaced the NSRL and prevented prices being reduced as promised in the budget.
Mottley is a lawyer; she is not trained as an accountant or an economist. I do not blame her, but she is being advised by foreign-trained “experts” steeped in the right-wing policies whose main concern appear to be the “survival” of businesses and investment returns . . . .
I urge her, unless she wishes to see a not so quiet rebellion – such as took place in 1937 – to change her approach and try to understand the ideological economic changes which have taken place internationally since the oil crisis of 1973, and how these have served to cripple our economy in the last 25 years. EDITOR’S NOTE: The above letter was submitted before last week’s Ministerial Statement by Prime Minister Mia Mottley on the major cuts in corporation tax from next year.
PRIME MINISTER Mia Mottley