Tuesday will send the most clearest signal as to the kind of Christmas the people of Grenada will be enjoying.
There is some fear in the country that 2014 could be one of the toughest years in Grenada given the signals coming out from the government about the need for sacrifices to be made – a radical departure from the noises being made nine months ago on the campaign trail of, “We will deliver” on the many promises that were made to get the Electorate to throw out Congress from office.
On Tuesday, Prime Minister and Minister of Finance, Dr. Keith Mitchell will be spelling out to the nation the entire package in the long-awaited 2014 budget that is coming against the backdrop of a Structural Adjustment Programme (SAP) that is looking to get critical help from the International Monetary Fund (IMF) to try and address a critical financial crisis facing the island.
The government has been giving bits and pieces in recent weeks of the austerity measures that are expected in the budget as it tries to sell the concept of “shared sacrifices” to the population.
THE NEW TODAY understand that the key REVENUE MEASURES in the budget are:
* Lowering the Income Tax threshold to $36, 000 from $60, 000
* Increase Property Tax on land from 0.10% to 0.2% and residential buildings from 0.15% to 0.30% (exemption on first $100, 000)
* A Property tax on idle agricultural lands
* US$5 per night levy for stay-over visitors
*Small business levy (on sales up to $120, 000) instead of 30% tax on profits
*Widening the withholding tax base to include lottery winnings
*Restore VAT rate on construction materials from 2014
* Reduce Manufacturer’s Rebate
Against this backdrop, this newspaper is doubtful whether the Mitchell government is on the correct path to successfully tackling the problems associated with the country’s finances and economy.
The 2014 budget needs to spell out in clear terms not only to the people of Grenada but to the IMF, World Bank and others the measures that would be taken by government to reduce expenditure rather than focus on the guessing game of raising revenue from additional or new tax measures.
All credible economists agree that the correct path to be followed by government is to reduce expenditure and not “contain expenditure” in dealing with the EC$15 million deficit as articulated by PS in the Ministry of Finance, Timothy Antoine, while at the same time looking at creative ways to grow the economy.
If the budget fails to unveil plans that will grow the economy then questions would have to be asked about the seriousness of the Structural Adjustment Programme at the end of its 3-year period.
Within weeks of the return to power of Dr. Mitchell and his NNP, this newspaper in an editorial stated quite clearly: “To whom much is given much is expected”.
This is clearly the hour for Dr. Mitchell to show that he is made of the right stuff that can arrest the ills of the Grenadian economy and to build the much-talked about New Economy that was promised in the build-up to the February 19 general elections.
The Prime Minister is not one to be written off easily since many had done so after the NNP was badly beaten 11-4 in the July 2008 poll.
The incoming National Democratic Congress (NDC) of Tillman Thomas imploded due to the posturing of a faction that raised its ugly head similar to what took place in the New Jewel Movement (NJM) of late marxist leader Maurice Bishop and his People’s Revolutionary Government (PRG).
The people brought back Dr. Mitchell to the fore and all signals coming out from government circles is that the Prime Minister is very much committed to building this New Economy – with or without any serious input from the architect of the plan, Dr. Patrick Antoine, who from all reports is holding the name only on paper as Chief Policy Advisor but has been relegated down the batting order to being almost a spectator as PS Timothy Antoine takes centre stage as the de facto Finance Minister and fully in charge with the Structural Adjustment Programme.
THE NEW TODAY is not concerned too much about internal battles within the NNP camp for influence. Our concern is about putting the national interest first and foremost in the scheme of things.
However, this paper is not convinced that the Ministry of Finance has the necessary leadership and experts with the technical skills and competence to seriously grapple with the structural deficiencies affecting the Grenadian economy.
The Prime Minister as leader of the ship of State needs to reach out to the sons and daughters of Grenada in and out of the country to come to the rescue.
This country has enough competent economists the likes of Gregory Renwick, Dr. Brian Francis, Dr. Arnold Mc Intyre, Dr. Wayne Sandiford, Dr. Carlisle Mitchell and other experts in the field of Government Finances who can make a serious input in terms of helping the country to weather the storm.
The Prime Minister needs to take the high road and become more Statesmanlike and seek to heal the deep political divide in the country because one senses a greater polarisation between the Green and Yellow Camps , and this does not augur well for the future of the country.
The Congress supporters are still angry and smarting from their loss in February and while being more affluent than the “little man” on the street who is a nominal supporter of the NNP, the Yellow folks have “locked their purses” and showing signs of not being prepared to lend a hand to those Green folks who might be in distress.
If this situation continues without a coming together of all of us in Grenada in the national interest then the country can kiss good bye to SAP and all the talk about “shared sacrifices” and new economy.
The Yellow Folks are suspicious of the SAP since they see the tinkering with the Income Tax structure as aimed primarily at the Middle Class and most of them fall into that category in Grenada.
The so-called “small man” who benefitted significantly from the “largesse” that was always on the table for them between 1995 and 2008 during the previous stint of Dr. Mitchell must also make his fair share of the contribution as part of the process of “shared sacrifices”.