Barbados PM announces economic stimulus

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Mia Mottley, Prime Minister of Barbados

(Barbados Nation) With the Government of Barbados set to lose more than $450 million in revenue over the next year, Prime Minister Mia Mottley announced a $2 billion plan designed to stimulate business and provide relief for the most vulnerable over the next two years.

Mottley said in the wake of the COVID-19 pandemic, which has brought economic activity to a virtual standstill, the difference in what Barbados earns and what it spends “would initially worsen by near $700 million”, “without doing anything”.

She addressed the nation for almost two hours on Wednesday night and announced Barbados was moving from Phase 1 to 2 in the national recovery plan, with new measures being implemented.

Mottley said revenue will be down from income tax, corporation tax, Value Added Tax, excise tax, duties, fuel and air transport levies. Meanwhile, Government would have already spent more than $100 million on health, including the isolation and quarantine centres, new equipment and supplies (one ventilator costs about $100 000) and the National Insurance Scheme (NIS) will pay out $200 million in benefits.

Here are some of the measures in the stimulus package:

* The Prime Minister said the first part of the plan will include $1.7 billion in capital works projects for both the private and public sector in various areas and this did not include the $50 million public works project to be undertaken by the Barbados Water Authority.

 

* Government will soon be launching its Homes For All building programme and in about three months’ time, Barbadians should see a $360 million Green Energy Park supplying 30 megawatts of renewable energy, among the initiatives in that sector.

* More than 750 acres will be brought back into cultivation as Barbados moves towards greater food security and to provide jobs in agriculture. New legislation will also be coming to address praedial larceny.

* A Pandemic Solidarity Bond will be issued to provide cash for the NIS and $210 million will be made available to the most vulnerable households.

* Government will pay out $131 million in personal income tax and VAT refunds and $89 million in corporation tax later in the year.

* Self-employed people who make NIS contributions but are now not eligible for unemployment benefits will access $1 500 for April and May only through a Business Cessation Benefit.

* Through the Household Survival Programme, $20 million will be evenly split between welfare and those households which do not receive NIS benefits. This will be in addition to the Adopt our Families Programme which has received almost $900 000.

* Funds will be set up for businesses, but they must commit to keeping 75 per cent of staff.

* The Barbados Tourism Facility will be established with $200 million for hotels to improve their plants and provide investment capital.

* Banks have committed to providing relief for customers, including no maintenance account fees for the senior accounts, no over the counter charges for seniors over 70 and no maintenance account fees for the youth accounts.

Finally, the Mottley said private sector projects to the tune of $800 million are still scheduled to go on stream this year. Next week, work should resume on Sam Lords Castle ($400 million), while 75 apartments are to be built at Crane Hotel and improvements to the Apes Hill Golf Course should cost $75 million.

Similarly, by the end of June, Government hopes the $60 million expansion of Sandals Dover, the Sagicor Retirement Villages project ($200 million) and the Hyatt Ziva ($400 million) in The City will have commenced, though demolition work on the latter may begin sooner.