Barbados Prime Minister Mia Mottley Unveils 'No New Taxes' Budget Focused on Economic Growth and Resilience
"Prime Minister Mia Mottley unveils 'no new taxes' budget for Barbados, emphasizing economic growth, resilience, and sharing prosperity. Plans include tax credits, job creation, and focus on partnerships and modernization."
Prime Minister Mia Mottley on Monday offered Barbadians a “no new taxes” budget that she said will secure “our Barbados of today and our Barbados for tomorrow”.
In a more-than-four-hour presentation before a full House of Assembly, Mottley told residents to expect an increase in the price of natural gas but announced a raft of tax credits, and an additional 250 new jobs at the Queen Elizabeth Hospital (QEH) over the next three years to reduce waiting times and expand available services.
The Financial Statement and Budgetary Proposals reflected three themes: growing the economy by four to five per cent; creating a resilient nation and people and sharing a larger slice of the economic pie in a people-centred country.
The prime minister said the creation of a new commercial enterprise to be known as Business Barbados is one of the strategies that the government is to pursue with the public and private sectors to remove blockages and to propel the pace and scope of economic growth.
She also identified increasing public and private sector partnerships; reviewing tax structures and new investment funds; further modernising the tax system; digitisation and re-engineering business processes; unlocking the mortgage market; increasing access to financing for the private and public sectors; unblocking renewable energy investment; and addressing the demographic challenges by population and skills management.
Other strategies outlined included “monetising illiquid and derelict assets in the public and private sectors; exporting capital to diversify investments given Barbados’ limited size and vulnerability, starting of course with the CSME and the wider Caribbean and Central and Latin America basin; establishing the pharmaceutical industry to aid in the protection of citizens’ health as well as export and the earning of foreign exchange.
Mottley disclosed that work is well underway for the launch of Business Barbados.
“This will be a commercial state-owned enterprise directed by a board of directors drawn predominantly from the business community and run by a CEO at the helm. It will have three divisions under it and it will be positioned strategically in the middle of the local trade and investment architecture by ensuring that all services required from pre- to post-incorporation of companies will be vested in and provided by the operations of that entity,” the finance minister told the House of Assembly
To ensure long-term growth and well-being, the government will prioritise its scheduled national development projects.
“To facilitate the establishment of these public-private partnerships, I propose with the effect from the 1st of April 2024 to establish… a 50 per cent refundable tax credit for investments in projects identified and approved by the government in the context of our national development strategy. The specific areas you will hear throughout this presentation that will benefit from these tax credits that support national development,” Mottley revealed.
She also informed the legislature that the government will be reviewing the tax structures and introducing new investment funds.
The budget also addressed allegations of unsustainable national debt; the cost of living; the state of the roads, particularly pothole repair; access to jobs especially for young people; and managing education reform.
The prime minister was also harsh on commercial banks, describing as madness the length of time they take to approve a mortgage compared to a loan for a car which, unlike real estate, depreciates on day one of its use.
On the issue of renewable energy, she was also heavily critical of the pace at which getting storage into the energy system was happening, citing the matter as one of urgent national energy security.
The long delay in settling the Barbados Light and Power Company’s request for a basic rate hike also attracted Mottley’s wrath even as she announced plans to review the electric light legislation and the operations of the utility regulator, the Fair Trading Commission.
She suggested that immediate solutions are now needed to get storage on the grid.
“We need as a matter of urgency, the Fair Trading Commission’s decision on the current Clean Energy Transition Rider by the BLPC to be delivered so there is clarity and predictability in the market on storage investments by the utility. It is clear for all to see that this country cannot continue to hold strain.
Mottley continued: “Unless Barbadians say to me, and they have not, that they want to see load shedding, power outages and all the negative outcomes that go along with grid instability, we need to take immediate steps to introduce Barbados’ first Battery Energy Storage System (BESS) for the utility.”
The prime minister argued that the number of power outages in the last 10 years has been too much a part of this country’s landscape.
The work of visual artists will also be getting a boost with the introduction of a new tax incentive. With effect from April 1, 2024, a 50 per cent refundable tax credit is introduced for the purchase of local art up to $1 million for the outfitting of investment projects.
Non-gazetted police officers will be regraded to allow them to qualify for duty-free loans while detectives are in for a new allowance that aligns with the dangers of their duties.
Nurses are also to benefit from increased vacation similar to what teachers get, and that much-anticipated Teaching Service Commission will be implemented this year.
