Expect Cost of Living Increase as Short-Term Government Measures End, Warns DLP Vice President

Expect Cost of Living Increase as Short-Term Government Measures End, Warns DLP Vice President

August 17, 2023

Bajans are warned of an upcoming cost of living increase as temporary measures implemented by the Government, such as reduced VAT and social compacts, come to an end.

Bajans are being told they will start to see and feel the effects of a cost of living increase over the next couple of weeks as a number of short-term measures implemented by the Government come to an end.

The caution has come from the Democratic Labour Party (DLP) second vice president Ryan Walters who urged residents to brace themselves for the inevitable.

“Have you noticed the increases in the supermarket over the past few weeks? You know why? It is because social partners’ Food Prices Compact came to an end. When we [were] jamming a couple weeks ago, the prices were going up, they were jamming too.

During the hype of Crop Over, these things were happening under our noses,” he said at a political meeting in Deacon’s Farm, St Michael on Sunday night.

“It ain’t over. That reduced VAT [Value Added Tax] on your light bill comes to an end in a couple of weeks.”

In February this year, the reduced VAT on electricity bills which went into effect from August 1, 2022, to January 3, 2023 was extended for eight months, and is therefore due to come to an end at the end of September.

Domestic customers are paying 7.5 per cent VAT on the first 250 kilowatt-hours rather than the usual 17.5 per cent rate. A second six-month prices social compact giving consumers an ease in prices on 47 items, which followed the first one implemented from July 21, 2022 to January 31, 2023, has also ended.

“When we are out there buying new shoes, new bags, school clothes and hoping for the best for the new school term, these things will be happening and we have not heard a peep out of this Government,” Walters asserted.

He chided the Social Partnership for not speaking up for consumers.

“We have not heard a peep from the Social Partnership that is supposed to be looking out for our interests. This is not a Social Partnership; it is a Government and private sector partnership. It is time for permanent solutions, not a six-month extension, not a three month here, a four month there. We have permanent problems and we need permanent solutions,” he said.

Walters, who will this weekend contest the party’s presidential elections, lamented that the cost of living had increased since 2018 when the Barbados Labour Party (DLP) was returned to office.

“Before 2018, we used to say, ‘let’s talk about cost of living’. Now we gotta say, ‘let’s speak about the high cost of living’. Your dollar in 2018 was worth a dollar. Today it is 77 cents,” he charged.

“Since this government took office in 2018, . . . the cost of goods has risen at a rate of at least three times faster. Cumulative inflation for the five years before 2018 totalled 8.5 per cent. Cumulative Inflation for the five years since 2018 totalled 23.2 per cent – three times more than the usual rate of inflation. But what is remarkable about this, is that it is against a very strange backdrop…. $1 billion of VAT was written off by the Government.

Businesses that take in your money when you go in and patronise them supposed to hand it over to the Government so they can do their business.”

Walters said the “runaway inflation” was happening amidst the tax breaks and concessions to the private sector.

“The National Social Responsibility Levy removed; less taxes for businesses again – a reduction in corporation tax from over 20 per cent down to 5.5 per cent and below. Cost of living gone up by 23.2 per cent and we giving away bout $2 billion to corporations in this country.

“I have not added in the $300 million- BEST [Barbados Employment and Sustainable Transformation] programme during COVID. You don’t even know the terms under which these businesses got that money,” Walters added.

The business executive contended that the Government was in a position to fulfil its promise to reduce VAT.

“Government consultant [Clyde] Mascoll said in March that Government has excess. How did they get excess and we have a deficit in our pockets? Their campaign promise in their manifesto is that they will reduce the VAT. The Government is earning too much money while we suffer. It is earning on our backs. We deserve an ease and they have proven that they can give the ease by the numbers,” Walters said. (BT)

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