2005 Barbadian Budget

The long waited 2005 Barbadian budget came and went in the third week of 2006. Both the public and business community are left contemplating exactly what net effect it will bring them. Yes! There have been small income tax concessions, but will they even keep up with the current rampant inflation stated by the Prime Minister, the right Hon. Owen Arthur ‘as likely to exceed 4%’ or according to one Government Senator who admitted during a population call-in programme recently, 7% for the year 2005. Also surprising is that despite tourism being the only principal sector of economic growth and calls by industry leaders including the president of the Chamber of Commerce, Mark Thompson, prior to the budget to give this sector some assistance, none was given. As Barbados has been competing longer in a global tourism market than many of its neighbours, it suffers from having a predominance of tired old hotel plant. With loan interest rates available to the smaller properties anywhere between 12 and 14%, including ominous ‘arrangement’ fees, there simply isn’t the fiscal margins of viability to take on such commitments for the all-essential upgrades, prior to hosting some of the super eights and 2007 World Cup Cricket Final. Following the budget, industry leaders including the former chairman of nation’s largest conglomerate, Barbados Shipping and Trading, Sir Allan Fields, also voiced concern that tourism had not been given special attention. Perhaps, Government’s position was that it is almost too late at this stage to undertake any meaningful hotel refurbishment by early 2007. A doubling of interest rates over the last year plus the rising cost and scarce availability of certain materials and labour, all negatively contributing to the ability to achieve major upgrades. So, not only is it a forgone conclusion that we will lack sufficient accommodation in time for the event but also that a substantial proportion will not be up to a standard most of us are comfortable with to showcase the destination. Equally alarming is the hundreds of millions of dollars government has borrowed and continues to do so. This prompted retiring managing director of one of the most successful pan-hemisphere trading company’s, Goddard Enterprises, Joseph Goddard, to state publicly in a post-budget analysis that Government was entering ‘the danger zone’ in respect of national debt. Adrian Loveridge 20 January 2006