Editorial

Desperate Measures, Indeed

IT will definitely take more than pulling a rabbit out of a hat managing the country’s affairs over the next fiscal cycle. With recurrent expenditure at a staggering $984.2 million, the 2015/2016 Estimates of Revenue and Expenditure for the year being budgeted at $1.464 billion leaves us in the situation we have been trying to get out of for years now.

Recurrent Revenue ($984.2 million), Capital Revenue ($7.6 million) and Grants ($125.99 million) seems the right equation to the government presently. Despite foreseeing positive gains in the economy in the year ahead, the Prime Minister is already indicating that his government will manage its fiscal deficit to keep it lower than it was prior to them assuming office in November 2011.

Sweeping changes have already been announced in Prime Ministers Budget Statement last Tuesday. These changes are a mixed bag for many who believe that some of these changes – such as the four proposed changes to the Value Added Tax (VAT) – could have been implemented long before.

A painful sticking point for the government is the public’s reaction to the hike in vehicle licenses. Many people are already complaining that government is driving down a steep cliff by implementing such steep rates. If the police were doing a poor job at intercepting unlicensed motorists before, their challenge has now gotten worse.

It remains to be seen – and felt – just how the many programmes the Prime Minister outlined last Tuesday will truly redound to correcting the chronic economic malaise the country has been burdened with for quite some time now. Runaway unemployment levels and inadequate safety nets for the indigent are as glaring as the fact that there just are too many public servants depending on the public wage bill.

While there are some laudable elements in the Budget Statement, such as a bolder move towards renewable energy, the long-overdue comprehensive facelift for the Castries Basin and a continued emphasis on upgrading public infrastructure, one would have thought that consumers would have at least gotten some reprieve from VAT.

Since October 2012, consumers have been desperately hanging on as they try to make what little they earn stretch. One would have thought that the Prime Minister would have announced at least a 3% VAT reduction on consumer goods and items, if only for a short-term basis.

Managing a country is ostensibly not an easy task. The argument can well be made that desperate times call for desperate measures, especially when a government is saddled with perennial deficits. However, any new measure implemented by the government should not serve to leave those who are already desperate in a worse shape. It is high time that government comes up with better ways of tackling the problems they swore they would have remedied by now. There must be better ways of generating revenue and the right eyes and minds must find them.

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