Prime Minister Tillman Thomas has defended his National Democratic Congress (NDC) government against charges from some elements within the local private sector that it is not doing enough to rescue them in the face of hardships brought on by the worldwide recession.
He has joined finance Minister, Nazim Burke and Christopher De Riggs, Head of the Office of Private Sector Development in the Ministry of Finance in rejecting criticisms of the four-year old government.
Both Burke and De Riggs pointed out that the criticisms are politically motivated and hinted that it came mainly from sources known to be supportive of the main opposition New National Party (NNP) of former Prime Minister, Dr. Keith Mitchell and want to see regime change in the upcoming general elections.
Speculation is rife that the two were pointing fingers specifically at Agricultural Economist, Dr. Patrick Antoine, a former top official with Mitchell’s NNP government and Senator Christopher De Allie who is believed to be politically aligned to the NNP.
Government officials have singled out the Trinidad-based Dr. Antoine as working behind the scene with the NNP to try and influence the outcome of the poll expected some time in the New Year.
While Prime Minister Thomas stayed away from the political name and blame game, he rejected suggestions that the government was giving a deaf ear and not listening to the concerns of the private sector.
In a speech delivered November 27 to a Joint Meeting of membership of the Grenada Chamber of Industry and Commerce and the Grenada Hotel & Tourism Association (GHTA) held at Flambouyant Hotel in Grand Anse, the Prime Minister made the following remarks:
“I consider it important to have this engagement with you in light of the recent debate that has developed over the level of Government support for the Private Sector. I specifically wish to address some of the concerns expressed at the press conference staged by representatives of the Private Sector on Thursday 15th November.
Dissatisfaction was expressed over what was described as a lack of responsiveness on the part of Government to the pleas of the Private Sector. Specific reference was made to Manufacturing, Tourism and the Auto Dealers. Concern was also raised over the rate of implementation of Government projects.
It is already known that we, as a Government, understand and identify with the plight of you, our business community in these very challenging times. It is also well known that we are constrained in extending all the help we would like to give. It is quite a different matter, however, to say that we are indifferent to your pleas.
In addressing the concerns that have been well ventilated in public by your representatives you will discover that we indeed have a difference of opinion on some matters. It is my hope, however, that this dialogue will lead to a meeting of minds and a more common platform for action.
Let us, first of all, talk about this lack of responsiveness.
We have said and demonstrated that, for us, partnership with the Private Sector is an essential pillar of Governance. This inclusive approach to Governance was laid out in our Party’s manifesto and we have honoured this promise to the nation.
That is why we engaged the Private Sector organisations early in the life of this administration in dialogue around the crafting of a Social Protocol on Productivity, Wages and Prices.
After months of intensive discussions this initiative fell through, not for want of trying on our part, but it should be acknowledged there was indeed a shared commitment between the Government and the Private Sector in this matter.
During the last four years we have endeavoured to work as closely as possible with the Private Sector in multiple areas of national development. Private Sector representation has been a critical ingredient in the composition of our Committees and Advisory bodies.
Here are a few examples:
(1). The Advisory Body on Trade and Investment that outlined the key elements of the Investment Promotion Act
(2). The Steering Committee that guided the implementation of the programme of Doing Business reform at Inland Revenue, Customs, the GIDC and Bureau of Standards
(3). Consultation on a Nutmeg Industry Plan for Grenada
(4). Extensive Dialogue on the issue of the viability of An Economic Citizenship programme for Grenada
(5). Dialogue on a Tourism Master Plan
(6). Briefing and Consultation on the Replacement Hospital with Teaching Facilities
(7). Dialogue on Energy leading to the creation of a National Energy Policy
(8). Dialogue on ICT
These are examples of Government and the Private Sector working together in a purposeful and productive manner.
Government has responded to Private Sector Advocacy
We do not practice empty rhetoric or lip service as has been implied in some quarters! In fact, Government has embraced the advice of the Private Sector and acted on this advice.
Here is more evidence:
(1). The very introduction of the Value Added Tax: This was a tax reform that the Chamber advocated for over many years. Some of this would have been informed by the Tax Reform and Administration commission led by Sir. Alastair McIntyre. We had the courage to introduce VAT when others did not.
(2). The adjustment to the rate of VAT upon implementation in response to the advocacy of specific interest groups within the Private Sector: for example, the zero rating of VAT on exports, the reduced rate of 10% VAT on accommodation, the 50% retention arrangement with hoteliers during the off season, the removal of VAT on Service Charge, the slashing of VAT on the big ticket items in construction
(3). The zero rating of VAT on capital goods and materials purchased by an approved investor during the implementation phase of a project
(4). The removal of Excise Tax on vehicles as a direct result of representation made by the Auto Dealers to the Government
(5). The much talked about 10% Rebate on VAT Exclusive Sales to be used to offset non-VAT Tax obligations
I can give you further examples of concessions and indeed, special institutional arrangements made by the Government in direct response to the efforts of your dedicated advocates from the Private Sector. But the facts speak for themselves.
This is certainly not the picture of a Government that is deaf to the pleas of the Private Sector.
Learning to Get Along while disagreeing
I wish to emphasise that these concessions have a cost. Government has foregone revenue collection in order to preserve the cash flow position of companies.
Further attempts to pressure Government into giving up additional revenue can lead to greater fiscal pain and would be, in fact unsustainable.
Naturally, we have to find creative ways to give even more support to not just Manufacturing and Tourism, but indeed all other economic sectors. This will involve give and take. It will require self-reliance and open mindedness.
A proposal has been put on the table by the Manufacturers which we have frankly and with the greatest respect said does not represent a viable proposition for us at this time.
Any attempt to construe our response to mean that we are deaf and unsympathetic flies in the face of all that has been done to support this sector by this Government. We expect to continue candid dialogue to work out mutually acceptable solutions. We are mindful that the pressure is on and businesses are feeling it.
While we respect the right of any organisation to go to the public with issues we wish to point out that we will not resolve these matters at press conferences. In the final analysis we have to sit around the table and talk to work things out. This is what the nation expects of us.
We are counting on the understanding of you, our partners in the Private Sector, of the real fiscal limitations which the country faces. Show us how we can help you in new ways that are sustainable.
Ladies and Gentlemen, I wish to draw your attention to comments made by CDB Governor Warren Smith at your recently held Banquet and Award Ceremony. In commenting on the challenges faced by the Business Community in the region, Mr. Warren Smith cautioned against an over reliance on Governments to take us out of the current crisis.
Similar sentiments have been expressed by the Governor of the Eastern Caribbean Central Bank, as well other regional figures.
Partnership, understanding and realistic expectations is what must guide our continued engagement”.