2014 can now be declared as the Year of Pain and Sacrifice for the people of Grenada, Carriacou & Petite Martinique.
Prime Minister and Minister of Finance, Dr. Keith Mitchell often used the words “pain” and “sacrifice” and stayed clear from, “we will deliver” as he presented the budget last Tuesday for the upcoming fiscal year.
This newspaper was not taken by surprise at the many austerity measures being taken in light of the financial crunch facing the cash-strapped government and description of the island’s economy by a Team Leader from the International Monetary Fund (IMF) that Grenada is virtually bankrupt and in dire need of chemotherapy treatment for the cancer now eating away at its financial soul and foundation.
What might have been surprising to many persons is the number of increases on existing taxes which would undoubtedly impact negatively on the spending power of the Middle Class in the country.
It is apparent that the Keith Mitchell/Timothy Antoine combination in the Ministry of Finance has embarked upon the building of the so-called “New Economy” by seeking to rewrite economic history.
There is absolutely no evidence in any part of this world to point to a country that has succeeded with a policy in which fiscal adjustments based more on revenue increases and tax hikes as opposed to expenditure reduction has ever worked to stabilise or stimulate an economy.
In other words, the measures as announced in the 2014 budget by the Minister of Finance and Prime Minister can never achieve the desired objective of growing the Grenadian economy because it simple cannot work that way.
The Mitchell government is clearly taking Grenada along a similar path that Barbados has now found itself under Prime Minister Frundel Stuart who is presiding over an economy that is not growing and leaving the administration with no other choice than to lay off thousands of public workers.
A few days ago, Donville Inniss, the Minister of Commerce and Business and Industry in Barbados announced publicly that the government in Bridgetown is too big and it has to be down-sized.
Prior to the 2014 election in Barbados, Prime Minister Stuart and his Democratic Labour Party (DLP) administration was publicly declaring that there would be no lay-offs in the public service.
Today, the same Prime Minister is singing a different tune and making the bold statement: “Who ever told Barbadians that there will be no lay-off in the public service”.
It is sounding very much like Dr. Mitchel and NNP in Grenada – “We will deliver” prior to the February poll but changing the tune after getting into office and now calling loudly for “shared sacrifices”.
In his budget presentation, the Prime Minister made no mention of the level of unpaid claims in the Treasury which the THE NEW TODAY understands is now in excess of $EC 100 million.
Whether the figure is true or not, the fact remains that the true deficit in the 2014 budget would have to include whatever is the amount of unpaid claims held by the Treasury.
The reality is that these are cheques that have already been generated by the system in the Ministry of Finance but cannot be given to the payees due to lack of funds on the part of the Mitchell government.
The proof of the lack of funds is the EC$20 million taken from the state-run National Insurance Scheme (NIS) just over two weeks ago to pay salaries for November and December and back-pay owed to public officers.
This newspaper also sees a certain level of deception by the Prime Minister and Minister of Finance in the Property Tax that is being increased as part of the austerity measures to be implemented for fiscal 2014.
It was stated that the tax is being doubled from the current rate. This is very questionable in light of developments taking place within the Ministry of Finance with respect to a new Valuation being taken of people’s property on the island.
The Prime Minister and PS Finance need to come clean with the nation based on reports coming out from within the Ministry of Finance itself that the Technical People are currently re-assessing the values of property with a view to increasing them.
It is our understanding that home owners can find that their properties which were previously valued at $250, 000.00 could now be assessed by the Ministry of Finance at $300, 000.00 and even $325, 000.00.
As such the doubling of the property tax will not be done at the old valuation rate of $250, 000.00 but at the new valuation which is much higher. In plain and simple language, the people will be getting a double hit from the 2014 budget on their properties – an increase in valuation plus a doubling of the property tax rate.
Finally, the 2014 budget as presented by the Mitchell/Antoine team in the Ministry of Finance is certainly not reflective of the binding commitment of the New National Party (NNP) in its manifesto for the February 2013 general elections.
On every page of the manifesto, it is stated that, “We will deliver”. There was no mention in the document of the need for “sacrifice” and for any “pain” on the backs of the people of Grenada, Carriacou and Petite Martinique.
The vote for the NNP was on the basis of the promises made in the manifesto and on the campaign trail.
It is the view of THE NEW TODAY that any major deviation from the policies sold to the people for the elections should seek the permission of the same people in keeping with the best traditions of the Westminster system of government that we follow in this part of the world.
As such this paper is advocating that Prime Minister Mitchell should call fresh general elections in order to get a mandate from the people as regards the “pain and sacrifice” that he is about to inflect on the nation in the coming new year.