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Hard to say, LPM told you so: 'VAT off course'

MELANIUS ALPHONSE

Published: Oct 01, 2013

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On this occasion it is hard to say: the Lucian Peoples Movement (LPM) told you so!

Leading up to the implementation of the value added tax (VAT) the Saint Lucia Labour Party (SLP) administration, including some local bureaucrats, had very little regard for what the LPM had to say on VAT.

Regrettably, we have heard from the Saint Lucia Employers Federation (SLEF) in recent weeks, calling on the government to lower the one-year old VAT from 15 percent to 10 percent.  It is very clear that they are having a very difficult time, and would like some “some breathing space” in the face of job losses and business closures.

In reference to the upfront collection of 15 percent VAT from business, the executive director of SLEF, Joseph Alexander said, “This reduction will provide members some breathing space as the slowdown in the economy continues to bite deep into their cash flows.”

Can anyone remember Paula Calderon, president of the manufacturers association of Saint Lucia, making the plea, before the introduction of the VAT?  Well, her recommendations were emphatically turned down.

What has happened, albeit the upsurge in violent crime, murder and suicide?

The National Workers Union (NWU), one of the major trade unions in the country, isn’t happy either.  They too are expressing concern over the failure to grasp timely opportunities to structure a plan aimed at job security and economic stabilization.

“Over the last 24 months we at the National Worker Union have been monitoring the situation in the country, especially since the financial crisis of 2008 and we are very concerned about the direction we see the country heading as it relates to job losses, and redundancies.”

“We have seen the trend via our membership and there is also evidence at the national level.  So our concern is related to the future of the country and its workforce, what exactly will happen to the increasing number of persons on the breadline,” said NWU’s deputy president general Solace Mayers.

I will not bore you with too much detail at this time, except to refresh your mind with historical facts as outlined in the VAT policy of the LPM, including an article dated April 18, 2012: “VAT mixed with low-skill jobs and low wages is a stalled economy”.

Back then, this was my observation: “At this time, with the current economic outlook, a VAT would hurt the economy, kill jobs, grow the size of a liberal government, push small business in the underground economy and permanently reduce family’s wealth and incomes.”

The other view point worthy of consideration was outlined in the article entitled “VAT or turning point?”, pertaining to readiness, cost compliance, the threshold of EC$180,000 and the rush to the implementation of 15 percent VAT.

“Already, I can hear the response from the government and their overzealous supporters.  ‘Keep quiet man.  The implementation of 15 percent VAT will take care of things.  We will have enough money to pay down on our debt, and better days will flow like milk and honey in the country.’

“Sadly, the truth is so very clear for all to see.  The implementation of 15 percent VAT will increase the cost of living, hurt the poorest among us; and without hesitation drive the next generation of Saint Lucians into greater poverty.  We now stand, at the crossroads of love of party and love of country.  You decide!”

Then there was a follow-up article dated June 20, 2012, entitled “Options to Growth” stating the following: “That’s why the options to grow Saint Lucia’s economy must comprise an affordable and deep-seated module to re-position Saint Lucia’s future economic success.  With regards to the arguments and the status quo of business as usual, the current course of economic growth and development in Saint Lucia is not going to reach the goal of sustainable jobs and economic growth.”

Sadly, a lot has changed since that lone voice in the wilderness tried to impress upon Prime Minister And Minister Of Finance Dr. Kenny Anthony of the need to have certain measures in place before the implementation of VAT.

Moreover, if the thinking back then was to impose VAT (a mere eight months after a general election), with hope that the people would soon forget, then that strategy may have gone belly up.

Therefore, it is time for the finance minister to stop ignoring the economy and the pressing issues facing the country, and support a broad plan of civic engagement in business and industry to create jobs and economic growth.

With approximately 24,000 Saint Lucians out of work, the minister of finance and his administration are out to sea, and missing in action.  Meanwhile, proclaiming that the country is ‘on course.’

However, most Saint Lucians know that the country is ‘off course’ with an SLP administration that is unable to create new and sustainable employment, and to allow the people and their families to keep more of their hard-earned money.

It would have been a great sign of relief for the finance minister to use his competence to fix the current and fiscal deficit, with modest reform measures that would reduce the food import bill and the trade deficit, in order to correct current and projected deficits.

However, the SLP administration must first desist from its economic policy of high taxes that encourage job losses and a stagnant economy!

And to embrace the realism that agriculture is the economy!  It speaks to every aspect of the economy, from employment, exports, foreign exchange, health care cost, food and nutrition, poverty alleviation, through to rural service improvement, farm technology and strengthening of the rural economy, into the middle class.

It is way past the allotted time frame to restore the Saint Lucian economy to better health.  The SLP administration of doctors has proven that they cannot get it done!

We in the LPM know that we can guide a government along, and help end the senseless politics, driven by a ruling party that places more emphasis on distracting people, than working in their collective interest.

But if truth be told, paving the way towards economic prosperity does not require obstructionism.  We need leaders who are capable of acknowledging the problem, and wise enough to adopt a novel approach to solving it!

• Melanius Alphonse is a management and development consultant.  He is an advocate for community development, social justice, economic freedom and equality; the Lucian People’s Movement (LPM) critic on youth initiative, infrastructure, economic and business development.  He can be reached at malphonse@rogers.com.  Published with the permission of caribbeannewsnow.com.


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