National Meeting Hand

Submitted by Tee White

If it’s now going to be ‘national meeting hand’, then obviously the first principle would have to be that it’s voluntary. I have never heard of a meeting hand where you have to be in it even if you don’t want to. If individual public sector workers choose to accept the government bonds on that basis, then that’s their choice. If however, any individual is forced to be part of the ‘national meeting hand’, whether by the union leadership or government, then it’s not a meeting hand at all.

The government is persisting with this idea, claiming that its aim is to “carry as many Barbadians as possible”. But there’s a simpler and much fairer way to “carry as many Barbadians as possible”. That is that those who have benefited the most over the last 6 decades from turning the island from a sugar cane plantation into a one legged tourism economy must put their hands in their pockets and put some money on the table now that the wheels have come off the donkey cart that they, and the politicians they paid for, built to serve their own interests and which has now got the entire country in a predicament. They’ve become multi-millionaires and billionaires by changing agricultural land into residential land and selling it to developers, by signing lucrative contracts with the government to manage government owned hotels, by linking up with foreign tour operators and in a million other ways. They have full their belly for the last 60 years and now the bill has arrived, they want to pass it to the workers to pay. No way!

A special Covid 19 tax on those with deep pockets should provide the government with all the funds it needs. Remember if you tax a billionaire at 99% of their wealth, they would still be a multi-millionaire at the end of it. They still wouldn’t have to worry about where their next meal is coming from, how to pay their rent or  water or electricity bill.  That’s the way to “carry as many Barbadians as possible”.

https://barbadostoday.bb/2020/05/26/govt-signals-shift-from-forced-to-cooperative-savings/?unapproved=673434&moderation-hash=7f0f8d4337e5dcb6d1bf4a53d7a8055c#comment-673434

401 comments

  • @Northern

    Blatant expansion of the MS worries me for sure, especially in an economy where future earnings from tourism are unsure. But I don’t think a small level of controlled printing would be a problem and this is what I base that statement on.

    Our reserves currently stand at around $1.7B and we have taken a massive amount of local MS out the system over the last 2 years by reducing the rate on old paper from 7 % to 1% along with other measures . Remember too other taxation measures were also introduced over the last 2 years to restrict liquidity in the economy. If you look at our fiscal situation now, we have strong reserves today and a low demand for imports based on 40,000 unemployed so far due to covid. I say so far as I feel more layoffs will come when the private sector gets a taste of reality. The risk of sending too many bajan dollars behind too few USD is not there anymore. Remember when Sinkyuh was printing he only had like $300M in reserves and sent over $2b in New money to chase it! We also know the NIS in real terms is probably insolvent if you weighed their assets at market value against their liabilities, so count them out this going down.

    Is it the ideal thing to do? No printing money never is but based on where we are there is no other real option, however I feel they should also address their poor collection agencies as well based on the need for every tax dollar.

    Like

  • Miller
    “How many weeks of import cover do you have since Coivd19 knocked out the tourism forex-earning cylinder? If you really believe that construction projects do not ‘consume and involve’ large components of forex then you are living in a closed economy called La la Land.”

    If you would do some reading before painting the blog verbose, you would know how many weeks. Boss I asked what %? I don’t deal with speculation, provide evidence or shhhhhh. I also highlighted less demand in areas.

    “BTW, we have noticed you have ‘graduated’ from being a top-notch PR consultant and sitting in the chair of committees of multi-national agencies in NYC to a guru of economics and finance in Bim qualified “Enuff” to put the affected-speaking professor in bullshitery out of business in the red club of hangers-on.”

    You jealous? Everytime I catspraddle you, resort to referencing this mythical PR consultant in NYC. Have you read Hector yet, or are just calling words to sound informed? STFD do!

    Like

  • NorthernObserver

    @JohnA
    You seem to find comfort in multiple loans to bolster Fx. And similar in ‘massive’ MS reductions, which I do not share. Delaying vs Deleting are separate concepts.
    You are correct the options are few, at least for politicians, who need votes. And attempts to collect monies owed have been just beyond our imagination (pathetic). Dey mekkin mock sport.
    You need aid and grants, for that mirrors our public collection policy.

    Liked by 1 person

  • @ Enuff May 30, 2020 3:12 PM

    Seems you are getting rather hot under that ‘reddened’ collar, matey!
    Are you exposing your tail way too much as you climb the tree of double talk?

    We better get Mr. “Spot On” out of sunny London to put you in your box before you prepare yourself for sectioning.

    You are the one, “Enuff” who introduced the issue of weeks of import cover as per:
    “Enuff May 30, 2020 9:36 AM Miller Firstly, we don’t have 3 weeks of import cover.”

    Hence the request for an update to your snide remark which has its relevance under a previous administration which for all its incompetence, corruption and warts did not default.

    You have already been told that it is estimated that every $ spent in the economy has an 80% forex component.

    You can check with the adviser Dr. Mascoll for verification.

    How would anyone in their right mind be jealous of a liar cum hypocrite.?
    We are too old for that. Maybe some pity to offer you.

    Like

  • Greene

    “VAT not collected by Govt is not theirs to give away. if retained by the retailer and used in the course of business, that is theft. as simple as that.”

    According to the local newspaper, “[t]he taxes eligible for the waiver of penalty and interest in this tax amnesty programme are Value Added Tax (VAT), Land Tax, Income Tax, P.A.Y.E. and Corporation Tax.” Note it says penalty and interest.

    But hear this: “Barbados Minister of Finance, Chris Sinckler has announced an extension to the island’s Waiver of Interest and Penalties Programme (WIPP), until November 30, 2011. The programme is being extended following inclusion in the Budget, presented late in 2010. The programme enables taxpaying entities with unpaid value-added tax (VAT) balances in previous years to avail themselves of the chance to settle their arrears with the penalties and interest applicable halved.”

    Like

  • Miller
    Stupse!

    Like

  • @ Enuff May 30, 2020 4:30 PM

    You are arguing at cross-purposes with your sidekick the red Koolaid Kid called Koochie Koo.

    Here is what your ventriloquist dummy has to say about the ‘stolen’ VAT:

    “ Khaleel Kothdiwala @ May 28, 2020 11:43 AM
    The VAT written off for ’96-’00 simply was too unwieldy and costly to collect. The costs outweighed the benefits. It is important to note that the penalties and interest was not written off however.”

    You need to get your fabricated facts in order before you spit through your red windows of propaganda and confusion.

    The grist of the VAT matter is whether the net amounts of the VAT (not any accumulated penalties and interests) have been collected, yet.

    Liked by 1 person

  • Vincent Codrington

    @ NO at2:35 PM

    Very creative thinking. I was honed in the era when managers were advised to KISS i.e Keep it simple ,Stupid. But this is the New Normal.

    Like

  • @northern

    The problem is we can do no better now. We have close to 40,000 unemployed and more to come from the private sector no doubt. We therefore have to keep the economy going in the short to medium term. We can’t depend on the NIS now as they are in shambles and own alot of worthless paper, so what is the option other than to print a controlled amount in the short term?

    It’s not the ideal solution but we have no others especially in light of practically no income from tourism over the next quarter.

    Like

  • @Millsy May 30, 2020 5:09 PM

    Your ignorance is rather amusing. So to be abundantly clear and for the avoidance of doubt:

    For VAT owed between 1996 and 2000, the amount owed is waived but NOT the interest and penalties.

    For VAT between 2001 and for a period thereafter, the original amount owed remains, but the penalties and interest are waived. That incentivises more recent defaulters to pay as the amount owed would simply be the original amount without penalties. That allows for an increased chance of collection of VAT arrears for that period.

    The period before is simply too historical and thus too difficult to collect.

    As usual Millsy, when you are without the facts, you shall have to “wheel and come again”.

    Although Enuff seems to have perfected the method of annihilating you little guy so I might you leave you to her in future.

    Like

  • NorthernObserver

    @VC
    I take no credit sir, rather noted this vicious name from the past, appear in documents from the FED. I figure they went to Arlington Cemetery to find it.
    If business can flip A/R from one firms ‘allowance for doubtful accounts’ ledger to another as an ‘Asset”, one could do the same with public A/R? Not particularly honest but fairly simple 😉😉
    Credit card uncollectibles were a favourite.
    The FED were also buying junk bonds, I was hoping the GoB could sell them a few. I am guessing some of Trumps buddies must be ‘in play’ and hence the widened tolerance by the FED. Certainly a latent way to raise campaign funds.

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  • @ Khaleel Kothdiwala May 30, 2020 5:28 PM

    Lil boy KKK(K), the illiterate “Millsy” is only repeating what both you and your political Sancho Panza wrote in black and white.

    If you have a difference in interpretation of your own effusions then you ought to take up the conflicting matter with your man in political pederasty the Master Enuff who, as clear as crystal, is contradicting your concocted facts.

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  • NorthernObserver

    @JohnA
    The ‘lack’ of options plays into the other jester’s (@Tron) hands. What you term ‘a controlled amount’, is like when the fella from a year long AA Program decides to have a sip. Just one, mind yah.
    You know this is the first of likely several lil drinks. In monetary terms it’s called peg pressure. Buy Fx, never a bad position to be in.

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  • @ Northern

    Instead of the AA controlling them I depending on the financial arm of AA called the IMF to hide de bottle from them and just give them a little bedtime sip to help them sleep! Lol

    Once they in the IMF program they wings clip in terms of runaway printing. Although I had heard Sinkyuh was appointed to some advisory board by the MOF. Lord I hope they ain’t got a committee called the XEROX committee if so God help we if Chris is chairman! 😂

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  • @Millsy May 30, 2020 6:20 PM

    I really don’t like having to embarrass you all of the time. It’s a little churlish and mean-spirited but you insist on my teaching you various lessons, dear chap.

    You also don’t understand the LoO matter so I don’t hold out much hope here but let’s still try. Enuff spoke to a later time period and I spoke to an earlier time period. There’s no difference in interpretation. There can’t possibly be as they are two separate and distinct time periods. You do make me laugh. If you continue in this vein, you’ll supplant Piecey from his position.

    Anyhow.

    +++++++++++++++++++++++++

    With respect to the practise politicians like to call “printing money”, it’s not savoury and is certainly harmful when its usage becomes wild. However, necessity makes the unthinkable fathomable. Additionally, The fiscal circumstances presently are substantially different to that which obtained previously. More than that there would be IMF oversight. Of course this discussion is presently academic as they have indicated they have no appetite for printing presently but that could change.

    The idea that government could change the terms of the bond to make them subject to any future, unlikely debt restructuring doesn’t intersect with reality. Not only would that be incredibly dishonest and a breach of basic human conduct, it would more importantly represent a breach of contract of sorts and thus not possible

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  • Miller…what a thing, the big countries saw the light real fast, it did not even take them a whole year…..lol..the ignorant house negros of these halfassed parliaments deserve nothing less.

    https://www.forbes.com/sites/sarabrittanysomerset/2020/05/30/aphria-aurora-and-other-big-ag-cannabis-companies-pull-out-of-jamaica-and-latin-america/?fbclid=IwAR3N1IsjkW6RULtTpI2pXqf5MKgI7wvZvBpRURc99z1mtGz5-oyqTcgeQCQ

    “Canadian Licensed Producers (LP) of cannabis are leaving Jamaica in droves, due in part to stalled governemental decisions on export licenses.

    Aphria (TSE: APHA), is “halting all further investments in Latin America and the Caribbean,” said a former employee exclusively to Sara Brittany Somerset for Forbes online. Approximately 200 former Aphria employees were laid off last week in an effort by the company to downsize and restructure.”

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  • Shifting balance sheet items back and forth, however, does not help to overcome the fact that productivity and forex inflows outside of tourism (apart from the offshore financial sector) tend towards zero.

    As soon as tourism picks up again, we should re-prioritise on the island, i.e. punish the lazy unproductive masses in the public service (e.g. through massive tax increases or salary cuts) and reward the top performers in the tourism industry (e.g. through tax exemptions).

    We must finally cast off the human ballast in the civil service, which has disrupted progress for decades. It is true that the state administration is now working a little more effectively again, but it is consuming too much money compared to output.

    As the example of Chris Sinckler shows, the civil service has so far been the refuge for such figures who were either psychologically or physically unsuitable or too lazy for the private economy. This must change. We must no longer see the public sector as an employer ultima ratio, but as a high-performance machine that has to lose weight constantly and where parts are replaced. We must not put social considerations before the common good.

    All successful companies make merciless personnel cuts. We cannot drag all underperformers along for decades.

    Like

  • @ Khaleel Kothdiwala May 30, 2020 6:58 PM

    You appear to be a new kid on the block not yet weaned on the milk of business finance and accounting either of the private sector or public sector kind.

    Let us spell out the weakness in the crux of your argument.

    Why would any entity- either profit-oriented or statutory (providing public goods)- write off the principal amounts of its receivables (1996 to 2000) but still leave the attached interest and penalties as ‘long overdue’ collectibles on its books from those very early periods (1996 to 2000) whereas the interest and penalties on the more recent (VAT) collectibles (2000 to whenever) are written off leaving the principal amounts of the VAT as still outstanding?

    If the ‘original’ amounts of the VAT debts have been written off because they have been ‘proven’ to be totally uncollectible, don’t you think that obvious commonsense and with reference to the guiding principle of conservatism or the doctrine of prudence should dictate that a similar approach should be employed to the definite “uncollectibility” of any associated long outstanding interest and penalties?

    Could you, in your fantastically ignorant puerile mind, ask someone more knowledge to explain on your behalf?

    So the question still stands to be answered by your more enlightened proxy: Have those long outstanding amounts whether in the form of penalties and interest for the period 1996 to 2000 or the VAT amounts due for the period 2001 to say 2018 been collected; and if not why not?

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  • @Miller

    Once the principle is written off the interest can not exist on a zero priciple balance one could easily argue. Now had they forgiven the interest only, the principle balance could still be owed.

    Uncollectable principle and uncollected interest go together. If I forgive your loan as a bank for example In May I can’t collect interest on you in June. Plus if you carry me to court for the interest the case will be laughed out as the first thing the judge will ask is what is the loan balance. ” oops sorry judge em is 0 cause we forgive it.” He would probably say ” wunna left my blasted court do.”

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  • @Miller
    You have the patience of Job.

    It seems as if we have now invented four-card-monte where sums or money will be placed on the table and shuffled around. The unsuspecting public will guess at each card and find that they are all blank.

    It is interesting that government can keep track of penalties and interest but not the originating amount.

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  • They blowing warm air up the pooch of the young lad and then pushing him on stage. The fine words are nothing more than farts.

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  • NorthernObserver

    @JohnA
    The IMF will get their money back. The ultimate downside of excessive printing is devaluation, and the IMF are not anti devaluation? In the past they have promoted devaluation. I wouldn’t be too complacent about the IMF’s concerns or controls.
    You will recall in late 2019, some including yourself, were hopeful, but skeptical, re Bdos meeting economic targets in 2020. We now appreciate a poss 6% surplus, will be a double digit deficit.
    To Trons point, how does Barbados avoid devaluation?

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  • “They blowing warm air up the pooch of the young lad and then pushing him on stage. The fine words are nothing more than farts.”

    lol…..we figured that one out in his first week of talking utter shite that could only have come from unscrupulous adults with no moral codes…

    ….that is why i told the minor Kootchie Koo…don’t bring his unknowledgeable programmed self up to me when he don’t even know what is really going on….nor what the hell he is talking about..

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  • Wuhloss….Vonda got bail….but there are still accusations with proof of more client’s stolen money, so now what..

    https://barbadostoday.bb/2020/05/30/bail-for-jailed-attorney/

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  • To Trons point, how does Barbados avoid devaluation?
    Go after banking deposits. Cyprus style. With no opposition it can do what it wants.
    Even so, the peg has been promoted as the holy grail and is viewed as sacrosanct by many on the island.
    I think even the deep pocketed local oligarchs would pitch in to help stave off that eventuality.

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  • @Northern

    At this stage I don’t see a threat of devaluation even with a small increase of local MS.

    The reason I say this is we have 40,000 people unemployed with more to come. Even if a small level of tourism returns by winter that can not absorb the level of post covid employment. The private sector will by the end of June no doubt be adding to this. Car sales are basically at zero and their bonds have stock in them, so no further imports will be added to their inventory either. In this environment I don’t see a large demand for FX over the next 6 months or so. Now I agree our FX earnings will also be slashed and we will have FX loans to service, but many of these institutions will have to make allowances for the covid effect on their borrowers.

    As I said this is not the perfect solution in terms of controlled printing, but in this environment what is our option? I keep asking those that object to it to table an alternative and none are able to do it.

    Like

  • KK
    Ignore Miller. Let him continue to create strawman, after strawman to deflect, divert, conflate, elide, mislead etc when it is necessary to save face. You know when a person is genuine by the way they respond when floored.

    Like

  • @ Enuff May 31, 2020 9:48 AM

    The only face being saved is that of yours now exposed as the one of sheer hypocrisy right up the koolaid kiddy’s rear end and not able to smell the difference between your written-off VAT elbow from that of keeping your uncollectible old penalties and interest arse on the books marked “Provision for actual bad debts already written off’.

    When it comes to matters of this nature just stay away.

    It’s neither up PR lying and bull-shi**ting street in NYC or the co*lie-kool-aid kiddy’s salesman forte on a penny farthing lane.

    You are not ‘dealing’ with the Salemite or the warrior WURA whom you can pretend to pi*s all over.

    We have shooed away before your brand of political yard-fowls blinded by the light of ignorance and downright partisan stupidity.

    Listen up, you poor little man, you are beginning to smell like a blow fly. Go look for a DLP carcass in which to lay your intellectually addle eggs.

    Like

  • NorthernObserver

    @JohnA
    I sense you know the path/pattern?
    Are we not now doing exactly what we criticized CS & Co for. Applying a band aid and ‘hoping’. Then again ‘wha else ya want muh to do’?
    We could do the bank-levy thing in Cypriot speak, as Dullard proposed. Nationalization? Unlike our climate, those too have limits. When you grab local savings then what. What is to be nationalized, rum? What is the challenge?
    Balancing inflows and outflows over a period of time.
    Ever considered what the Debt to GDP might be in Jan 2021 talking about the IMF.
    The concept of devaluation, just like balancing money flows, and defaults, strays from the economic/financial, into the political.

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  • Milluh
    Here we go with the PR NYC tale again. You need help! 🤣🤣🤣

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  • @Northern

    Yes I agree with you that is my concern too when the financial road has to meet the political road what will happen then?

    Will financial prudence rule over the power of the vote and fear of re-election?

    It Is that fear that caused Sinkyuh to over print last time and put us in the toilet.

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  • @ John A May 31, 2020 9:18 AM

    A rather cynical but accurate analysis. If everyone is unemployed, the consumption of Forex will decrease noticeably. So if our government is artificially driving employment with the BOSS program, this could have the undesirable effect of increasing the outflow of Forex.

    @ NorthernObserver May 31, 2020 11:23 AM

    Nationalization is impossible. We don’t have enough foreign currency to compensate for that. Also: Barbados has signed investment protection treaties with numerous countries. Canada, for example. The case would end up in international arbitration and destroy us.

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  • @ Tron.

    We between the need to maintain some level of employment verses and not over printing.

    Remember those Sinkyuh years were different. He sent $2B bajan dollars to chase reserves of $300M. This scenario is not in that league.

    Like

  • @ Enuff May 31, 2020 11:26 AM

    You are the one in need of help.

    The miler’s son has never been known to tell lies by embellishing any CV or making claims of preparing to chair upcoming high-level meetings in some metropolis full of real-real high-rise buildings.

    You are just one low-class yard-fowl cackling in the pen painted red.

    We now see how easy it was for Mr. Spot On out of London to spot your type of compulsive liar. Here is one of your more recent fabrications:

    “Enuff May 25, 2020 6:57 AM
    Miller
    “Since you now have a lot of time on your multi-tasking hands why not investigate the reason for the cessation of the preparatory work at the Hyatt Lighthouse site?”

    I told you already I am busy preparing to chair my first of four meetings next month with the white people–a 35+ storey building. Hyatt is child’s play so you should be right at home investigating the reasons for inactivity. Plus am I not a liar and bluffer, so why look to me for answers?”

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  • @ Tron

    But remember they are printing to try and not lay off more and add to the unemployment. Those that are already unemployed will not benefit from the printed money, as we have been told the NIS is capable of handling the benefits. Not my words but theirs. By that I mean don’t be surprised to hear that government does not buy back some of Sinkyuhs paper from the NIS. Remember iF this is done they are not printing money but buying back paper already in the MS.

    With Sinkyuh he was trying to keep the entire civil service untouched to elections. We have already laid off a percentage of that public sector over the last 2 years. The problem is our economy like all others, has an implosion value under which we risk a collapse or depression. Government must ensure that we never get there, as recovery then is impossible without serious pain like Jamaica and Guyana had to endure. At that point the dreaded D word starts getting whispered.

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  • Miller
    If I were you I would hush. Remember I told you the same thing just before imploring David to repost my comment? I always have my receipts. Trust me, you would get mek shame. I have no more time to waste with you.

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  • @KK. I think you threw your “facts” in the blender with a good serving of conjecture in an attempt refute Greene’s post and it didn’t work. It really devalued any point you were trying to make and from what i see you are better than that.

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  • @Ric

    What I said on May 27 at 7:05 in response to the Greene chap was either direct quotation and where not, two sentiments reflected in the public record for all to see?

    Where is this blend of conjecture which you seem to see?

    The point was and still stands, buttressed by those immutable and incontrovertible facts, that any comparison between the present government and the last two DLP Administrations is absurd.

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  • NorthernObserver

    @Tron
    I’m not promoting it. Yet we have US$50M+ to pay WO for success fees, (tell me how the local bond restructure could have failed) and that French group MF paid $25MBds for WIRR, including 32% of National Runs in Jca. Government’s can “find”money whenever they want.

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  • quote] PUBLIC SERVANTS are getting more time to hear details and put in their two cents worth on the Barbados Optional Savings Scheme (BOSS), but even if they all reject the plan, Government says it will still achieve its objective of shaving $110 million per year off the public sector wage bill.

    This is according to Government’s senior economic advisor Dr Kevin Greenidge, as he again touted the Mia Amor Mottley administration’s proposal for public workers to surrender a percentage of their salaries in exchange for short-term bonds.

    “In the extreme scenario that every public sector worker says that they do not want this bond, it has been so cleverly designed that the objective is still achieved,” he said on Starcom Network’s Brass Tacks Sunday call-in programme on May 31.

    “So if the public sector worker says that they do not want this bond and that they want their cash, at the beginning of the month that person indicates their preference, behind the scenes Government pays the worker still while at the same time issues instructions to take the bond to Central Bank, which purchases the bond immediately,” Greenidge explained. [unquote

    https://www.nationnews.com/nationnews/news/245871/denying-boss

    things that make you go ummmm

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  • “So if the public sector worker says that they do not want this bond and that they want their cash, at the beginning of the month that person indicates their preference, behind the scenes Government pays the worker still while at the same time issues instructions to take the bond to Central Bank, which purchases the bond immediately,” Greenidge explained.

    So all this BOSS talk was just a big foot move to help cover up the gov’t printing money?

    I wonder how long de peg will last.

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  • @Dullard

    Only if the secondary market is not active.

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  • @Dullard Only if the secondary market is not active.

    Fair enough. But who exactly will be buying these bonds? The people that got burned year before last? The banks that burned too? Or the 50K unemployed?

    Wait…let me guess…The NIS.

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  • @Dullard

    That is the 64k question. There will be an interest, the question is how much of the 110 million will the government acquire from the offering.

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  • How are the BOSS economists reducing salary expense in this time of accrual accounting in the public service even if part of the salary bill is paid by a government security? Is this what they are doing or something else?

    Basic-1
    Credit cash $100 million
    Debit salary expense $100 million

    Basic-2
    Credit cash $80 million
    Credit bonds payable $20 million
    Debit salary expense $100 million

    Basic-Magic
    Credit $80 million
    Credit bonds payable $20 million
    Debit salary expense $80 million
    Debit cash $20 million

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  • It looks as if this is what is calked a callable bond. If so, the arithmetic is simpler: every month deductions are made from public servants salaries, unless they have opted out. But at anytime the government may call the bond and return the principal, if you are lucky, withholding the coupons due to maturity.
    For a government that has defaulted on ALL it s debt two years ago, this is a high probability. A five percent interest is far too low for a high risk bond. This is theft. If government had to borrow the same amount of money on the financial markets, interest rates would be no less than 15 per cent.
    Further, in a system in which people have to opt out, it means that those who do will immediately be known to government, outing their future career prospects at risk. This is the perverse system union officials have bought in to. Barbados is a failed state. It will end in tears. How can anyone in all honesty support BOSS. It is vile.
    Come back @Mariposa, this government, led by a despot, is doing everything you have said.

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  • This is how it will play out if the worst should happen.

    Let’s say $100M in bonds offered to civil service and only $20M taken up.

    Then the $80M offered to private sector and $50M taken up.

    That leaves $30M on the central bank hands.

    Government then “buys ” $30M in sinkyuh paper back from the NIS and then the NIS then uses that money to buy the $30M left in the bond offering.

    End result covid offering is a success, Sinkyuh worthless paper held by the NIS reduced and we will find another way to get back the $30M. May send home a few from the civil service 3 months from now or raise a new tax with a fancy name like ” national recovery tax” or something so.

    The point is if they need $100M to make this bond offer successful they will find it! Who you think the money will come from to make the NIS solvent again but me and you? Right now they holding nearly $2B in worthless paper, which I would bet you are going to see government ” buying back early” over the next few years in pieces. In other words everytime the NIS need money government will buy back some of Sinkyuhs worthless paper using we tax dollars. Truth is as sad as it is, at least the NIS will be getting a little refinancing every time that happens.

    And to think this government take that clown and put him on an advisory board ! Stupes

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  • @John A

    You are speculating?

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  • @David

    Yes one could say that I am. I personally don’t see it coming to that though as i believe the private sector will buy what ever bonds are left. They will risk it as these are short term bonds. I would not tell you if they floated another $100M offering behind this one the same would happen though.

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  • from the outset i made the following observations-

    Greene
    May 29, 2020 12:28 PM

    @David
    thanks for posting that power point-

    “Some persons may need up to all of their salary in cash now to meet current needs:
    1.Workers can seamlessly convert partor all of their bond into cash each month.λAt the start of the process, each worker will indicate to the Ministry of Public Service (MoPS), what portion of their bond, if any, they would wish converted into cash each pay period. MoPS will send those instructions to the Central Bank who would then each month sell that portion of the worker’s bond to a willing buyer and deposit the cash into the worker’s account ”

    it seems to me that there is no option. at least not at point of sale. workers have to buy the bonds then indicate how much they want converted to cash. i wonder who or what is considered a willing buyer.

    appears to be a major flaw in the plan and a needless complication. probably inserted hurriedly to say it is optional which is an illusion. i would just mandate they buy the bonds and the earliest they can sell them would be the early redemption date

    Greene
    May 29, 2020 2:13 PM

    ok so i was right, the worker has to allocate or rather some % of the worker’s salary will be allocated to bonds. afterward the worker can indicate if all or a portion is to be converted to cash.
    that is the only way this would make any sense.

    the option is really an illusion and comes after point of sale. if the central bank doesnt get them sell isnt that like printing money?

    Greene
    May 29, 2020 4:34 PM

    @CA,
    i have no issues understanding the bond idea.

    i never ask a question to which i dont know or likely have an idea of the answer -lol

    the problem with the opt out is that if all or a majority of workers opt for cash the Central Bank will end up with the bonds until they are sold, which is like offering the bonds to certain members of the public with civil and public servants given the first choice to buy

    Like

  • Econodini June 1, 2020 9:13 AM

    Glad to see that someone else has spotted the “Creative Accounting” techniques being employed in the fiscal ledgers.

    How can payroll costs be deferred in an environment where the revenue-generating base of the ‘People’s Business’ has been severely eroded with very little chance of ever returning to its pre-Covid levels?

    What is going to happen to those statutory bodies which were so heavily, and in some cases totally, dependent on revenues directly generated by the hotel and hospitality sectors of the economy so overly reliant on that one forex-earning cylinder?

    Where is the money going to come from to underwrite the payroll / operating costs of the likes of the BTMI and the GAIA?

    The country’s policy and decision makers need to take their financial numbskulls selves out of the sky and deal with current and pending ‘realities’.

    Just cut the former big-living coat to suit the current money cloth available and ‘force’ the country to live within its income-earning means.

    Like

  • @Miller

    What about the plan to fund capital projects to create jobs in other sectors of the economy? Enough of the criticisms, solutions please.

    Like

  • solutions-

    offer the bonds to the public with the same guarantees. or simply mandate the public/civil servant buy them with the 4 year maturity date at 5% interest, and an early redeemable date at market price. they should be able to borrow against the bonds

    Like

  • @Greene

    How will your solution create the so-called fiscal space the government wants?

    Like

  • the same way Greenidge and MAM argued that it would

    he also contemplated offering another bond issue to the private sector, didnt he?

    Like

  • The pandemic bond offer promised from his explanation is to satisfy private and institutional demand. BOSS is positioned to cut governments salary bill to create fiscal space. Please help the blogmaster to understand Greene. Maybe Vincent or NO will assist. The blogmaster is confused.

    Like

  • Every time government talk about these bounds thay are confusing the issue more with the civil service.

    Just make the dam offer to all and done. This is a simple matter which you all are making very confusing to all involved. You have an offering of $100M @5 over 4 years, set the conditions and offer them. In other words smallest sale is $1000 and maximum sale to any one person or entity $250,000.

    Thank God wunna ain t airline pilots the plane would never left de tarmac!

    Like

  • But how do the economists reduce salaries and not reduce salaries – is it economagic?

    Like

  • More specifically, how do the economists reduce the wage bill and not reduce salaries – is it economagic?

    Like

  • @Econodini

    They can work magic if the government worker agrees to a salary deduction to pay for the bond.

    Like

  • @Greene

    If public workers forgo first bite at the bonds they will be floated to the individuals and businesses so what is the issue? We have become bogged down in the details?

    Like

  • David,

    i am truly confused by your questions bearing in mind i said this-

    solutions-

    offer the bonds to the public with the same guarantees. or simply mandate the public/civil servant buy them as a percentage of their salary with the 4 year maturity date at 5% interest, and an early redeemable date at market price. this reduces the wage bill. they (civil servants) should be able to borrow against the bonds.

    i included some words that may clear up any issues

    Like

  • They seem to be reducing salaries and issuing a bond together but separate.

    Like

  • @ David June 1, 2020 10:10 AM

    Aren’t these same capital projects long in the pipeline which were to be funded from loans from the IADB and CDB as previously announced?

    What has become of those sources of low-cost financing?

    Come off it David!
    This is just another guise to print Mickey mouse money.

    The government and by extension the people has to bite the pandemic-discharged bullet.
    Pure and simple!

    Like

  • A wonder if the little nobody leaders in the Caribbean are taking note that the tide is also turning on them..

    “PLEASE SHARE WIDELY AS THIS COMES FROM A CARIBBEAN WOMAN!!

    “Caribbean people are a joke. Which people would allow a despicable thief and rapist to be their leader? Only jokers in SVG. Which people would allow an incompetent criminal to lead them? Only the fools in Dominica. Which people would allow a Delilah to cut off their hair to achieve her money laundering ambitions? Only those enablers in Barbados. I am so tired of your useless talk.” –

    Thank you, Rebecca Theodore!!!!”

    Like

  • @Miller

    We are trying to have a serious discussion. How long will Barbados be in shutdown mode because of Covid? Is there a problem with planning to deal with worse case scenarios?

    Here is another question. Public sector jobs are guaranteed while at the same time private sector employees are being severed or suspended?

    Like

  • @Greene

    That is what I keep saying stop confusing the issue and put the offer out there for all. The market forces will take it from there.

    What’s the difference if the public buys the bond and you use that to pay the workers, or the workers buy it directly? The end result is the same, workers paid and bonds sold.

    Like

  • @John A

    If public workers do not want the bonds because they have no money or not interested then they do not buy. Let us focus our energy to more important issues.

    Like

  • Given the comments from the BOSS economists, the difference is recording a reduced wage bill.

    Like

  • This the point. The government wants to reduce the wage bill for the ‘books’ to look good.

    >

    Like

  • David

    the govt is adding consultants to the civil service left, right and centre, how do they cut the civil service under those circumstances?

    if there is any confusion over the bond issue, you are creating it yourself. it is pretty easy to understand.

    “So if the public sector worker says that they do not want this bond and that they want their cash, at the beginning of the month that person indicates their preference, behind the scenes Government pays the worker still while at the same time issues instructions to take the bond to Central Bank, which purchases the bond immediately,” Greenidge explained.

    Like

  • @Greene

    Then what is the problem if the public worker has choice?

    Like

  • @ David.

    To he honest as far as I am concerned it’s not even worth discussing. If the government want to play slide of hand with their balance sheet all at them. If the problem is finding money to pay workers to avoid unemployment hitting 45,000, then let’s deal with that. What is clear to me is they are using one argument to address another issue. This is not a reasonable approach to come to the public with.

    To me the elephant in the room is how will we maintain our current civil service if government revenue falls say 25% monthly between now and Xmas? Yes we can do a bond offering say to help us limp through the next 3 months but what then? We have a much bigger issue that no one wants to address and it’s this.

    How will government function based on its last estimates if it’s revenue falls by 25% over the said period?

    That is what I want to hear discussed but no one wants to touch it as yet it seems.

    Like

  • @John A

    This is the point. How long can we keep the civil service employed if government revenues keep falling, indefinitely?

    Some hard decisions to come.

    >

    Like

  • @ David June 1, 2020 11:07 AM

    Why are you evading the kernel of issue? Aren’t the private sector workers’ pay being cut and some losing their main source of income?

    Are you saying those loan commitments from the IADB and CDB- to fund the same capital projects now to be replaced by the savings of the ‘BOSS’ programme- were figments of the MOF’s (and the many consultants) imaginations?

    There is absolutely nothing wrong with printing money as long as those foreign currency loans are drawn down and disbursed as intended, i.e., towards CAPEX for national development.

    Why are public sector workers being asked to carry ‘alone’ the cost of financing these nationally-beneficial capital projects through the ‘voluntary’ reduction of their emoluments via some ‘creatively imagined’ bond issue?

    Like

  • @Miller

    The government has to manage an economy for the next several months in a climate of uncertainty. One does not wait until the well runs dry before taking steps to protect the situation.

    Like

  • @ David.

    My point is avoiding the situation will not make it go away.

    Ok I understand the $100M bond offering as a short stop position but they have to start speaking to the people about reality. Do not give us a sense of false safety to then come back and drop the hammer.

    We need to start discussing openly how does government plan to run in fiscal year 2020-2021 on 25% less than budgeted in the estimates?

    Let us open that can of worms and forget the slide of hand temporary patch bond issue.

    Liked by 1 person

  • Even harder decisions still to be made…it looks like they are planning on reopening the schools soon, i can remember posting about Suriname and their low rate of Covid deaths and elimination of infections just last week…well they reopened for one week for the elections and now their plague infections have SHOT UP…..

    the arrogant in the parliament would do well to try to understand the reason why most countries are keeping their schools closed until September or January…

    but dont mind me…ah like to tell lies the fowls said..

    Like

  • @John A

    Does the average person understand the gymnastics of financial accounting at play here? The government will have to find ways to protect jobs although holes have appeared in the revenue bucket. At a time the country needs to be creating opportunities in a world that will transform how we have to do business , we quibble about a non issue.

    Like

  • @ David June 1, 2020 11:35 AM

    Well, then, do like Sir Sandie and step up to the ‘leadership’ plate of economic realities which today are much more daunting that in 1991.

    There are no grand ole Dukes of York (except Caswell) to throw any spanners in the 29-1 majority works.

    Like

  • @ David.

    No most people will not understand playing snakes and ladders with the government balance sheet. Thing is though it all comes to nothing in the need for cash in the end.

    So they can postpone the decisions by short term bonds issues etc, but they can not avoid the inevitable. They have to address how will government run on 25% less of projected revenue going forward.

    The sooner these questions are addressed the soon we can move forward. To me that is the issue we should start addressing as a matter of urgency.

    Like

  • @John A

    This is the point, in the short term government will try to ride it out by being creative however as you correctly stated future planning will be called for to sustain the existing.

    Like

  • David,

    you argue in circles, mate. you confused me. i hope by design

    why do you think Greenidge had to explain himself in today’s nation?

    Like

  • @Greene

    Can you quote the article? Greenidge was quoted on the front page of the Nation newspaper referring to his participation on Brasstacks yesterday. If there was something new mentioned please quote it.

    Like

  • William Skinner

    @ John A
    I think we all know the BOSS proposal that I endorse, is a temporary fix. Quite frankly, a 5 percent sales tax across the board could have been considered.
    We really need a comprehensive twenty five year plan to save the next generation from inheriting a failed socio economic society.
    We have been tinkering and escaping by a neck from total collapse. Unfortunately and through no fault of our own COVID has technically destroyed the economy because of our total dependence on tourism.
    I have to wait and see how not only the government responds but the entire society.
    My main purpose for defending BOSS is that we as Black people need to invest in any opportunity to create savings/wealth and public servants who can afford to invest should see BOSS as a start. The added national benefit is that it will assist with the capital works program.
    If the government and the so-called social partners cannot devise a workable , sustainable , 25 year socio economic plan, we would be basically finished as far as real change is concerned.

    Like

  • Disgusting Lies and Propaganda TV

    @John et al SHORT TERM is the key.. This is a “delaying action”. Economic activity can’t be decreased and at the same time the numbers in the public service be maintained. People can’t be allowed to “do nutting” and be allowed the “same pay”.That just worsening the perception of the public service.
    People must remember that the IMF has allowed most governments wiggle room in the SHORT-TERM so it isn’t just the “sleight of hand” that govt is using. BOSS itself is still a pretty attractive proposal though in itself in the long term….people tired of banks’ small interest on the savings accounts….to be honest the only reason people use savings accounts and not putting their money in “shoe boxes” is for the convenience and security having an ATM card allows.

    Like

  • @ William

    I too support the bond issue but only as a short term measure. This approach can not be used as a fix or we will be back in the Sinkyuh years in a flash.

    The discussion must turn to how can we run a country on 25% less revenue than planned over the next 2 years. It does not have to come to layoffs either. It can come from improved tax collection, greater efficiency etc. It does not have to be a case of just “sending home people.”

    Like

  • Critical Analyzer

    No wonder so many bajans are financially illiterate and in debt. Why all ya trying to confuse a simple math problem with all the economic and accounting mumbo jumbo?

    It is simple. Government’s biggest cash drain that cannot be delayed each month is salaries. Government currently has the cash in the bank but they don’t know if they will be continue to get enough revenue coming in to keep enough cash in the bank to pay salaries. All the government is doing is giving its employees first option at buying a bond with some of their salary and if they don’t want to buy it, they are selling that same bond to the central bank who will resell it on the open market.

    Government is slowing down the rate at which it burns through the cash in the bank giving themselves more time to come up with and implement strategies to get revenue levels back to normal, reduce expenses and get things running more efficiently.

    At the end of the day, all that matters is if you trust the government enough to buy the bonds or not. The same decision you must make as to whether to buy shares, mutual funds or lend your family/friend money to start a business.

    Liked by 1 person

  • Critical Analyzer

    What ya all should be talking about is what projects and policies government can wisely use this money to push for to get revenue back on track and reduce expenses.

    Like

  • Critical Analyzer

    I say we start by taking a serious look at where our foreign exchange goes and reduce that foreign exchange drainage by replacing with locally produced products.

    Like

  • “…but even if they all reject the plan, Government says it will still achieve its objective of shaving $110 million per year off the public sector wage bill.

    This is according to Government’s senior economic advisor Dr Kevin Greenidge …”

    Like

  • @ critical

    That is my view as expressed in my above comments. We need to start looking at a medium term SUSTAINABLE plan that will take into account a 25% fall off in income while ensuring viability.

    It’s useless avoiding the discussion further

    Like

  • David,

    that has been cited by me at Greene June 1, 2020 7:55 AM

    maybe the same as you referenced

    Like

  • @Greene

    David,

    you argue in circles, mate. you confused me. i hope by design

    why do you think Greenidge had to explain himself in today’s nation?

    The point you made is incorrect, the article in the Nation regurgitated what Greenidge stated on VoB yesterday.

    Like

  • Greene May 31, 2020 8:24 AM

    On the face of it, BOSS is a very good sell to the public. It was well presented and has a lot of upside.

    Caught between a rock and a hard place by the downturn from COVID, although the Govt had warned pre COVID, that harsh measures were coming, the only way that Govt could cut its expenditure was via its wage bill, which is a large portion of the said expenditure.

    The wage bill outlay is for the most part civil and public servants’ pay, and the pay of Govt representatives which now are not only substantive MPs but the numerous other junior MPs, gurus, czars, consultants and hangers on. We understand that recently Govt hired VAT Refund consultant, another at the Ministry of Social Services and another as a Skills Retraining consultant.

    most if not all public / civil servants knew they were going to take a hit- it was just a matter of what kind. the govt could not cut salaries that needed a legislative change and firing public/ civil servants was a hard sell.

    This BOSS bonds started out as Forced Savings when that was not palatable it then morphed into National Meeting Turn and finally BOSS.

    BOSS represents saving bonds that mature in 4 years with a 5% interest rate attached. There is an 18 month to 2 year early redemption date where holders can sell at what the market offers.

    Instead of salary cuts this is what is being peddled to Govt workers as a percentage of their salary. There is a sliding scale % according to the level of salary. We have no issue with this. Those who are cash strapped and want a larger cash salary have an option.

    The Govt has made a big song and dance about the option and that workers can opt out. This seemingly gets rid of that ticklish problem of it not being forced and that of whether bonds can be deemed legal tender or not, as Govt is mandated by law to pay its workers in legal tender. Therein lies the rub.

    A percentage of the salary of every eligible Govt worker and I believe this includes MPs and the various hangers on will be allocated to bonds. Afterward the worker can indicate if all or a portion is to be converted to cash. the Central Bank buys or keeps the bonds, to be sold in the secondary market for which there is a record/register of likely purchasers. The bonds are guaranteed by Govt-it is written into the bond contract. Therefore, there will be very willing buyers- a 5% interest rate is better than anything being offered by commercial banks nowadays

    The much-touted option is really an illusion and only comes after point of sale. That is the only way this would make any sense as there would be no point in having the worker decide at point of sale whether to buy the bonds or not- remember the object is to decrease the wage bill.

    The problem with the opt out is that if all or a majority of workers opt for cash the Central Bank will end up with the bonds until they are sold, which is like offering the bonds to certain members of the public with civil and public servants given the first choice to buy.

    That notwithstanding we applaud the Govt for devising a strategy to cut its expenditure in a humane manner. We contend then that Ministers, gurus, czars, advisers, consultants and other hangers on should covert about 30%-40% of their salary to bonds. That would give public/ civil servants a lot of confidence in the efficacy of the bond proposal and who knows, it may spur production

    Like

  • Disgusting Lies and Propaganda TV

    For what its worth fact that Dr. Kevin Greenidge, a Bajan, was able to work with the IMF and able to turn around govt’s DIRE economic position in May 2018 to have Bdos receive several upgrades from default in less than 2 years and now devised this BOSS program tells me we have an “extraordinary” person at work here. Further credit to all Bajans here and worldwide.

    Like

  • @ Disgusting Lies and Propaganda TV June 1, 2020 1:13 PM

    For international investors only the naked numbers count, no history books or patriotic feelings. I personally feel sorry for Mr Greenidge because he is faced with an impossible task. He can only fail.

    We were indeed able to remedy the financial situation from June 2018 to February 2020, i.e. first slow down the further crash and then stabilise it at a low level. However, economic growth was not expected in February 2020 for the foreseeable future due to low productivity, high taxes and an unfavourable exchange rate. At least not if one doesn’t constantly see things through rose-colored glasses.

    The forecast of continued zero growth is now a thing of the past. The fact is that revenues are falling away and therefore expenses have to be cut. Everything else is either new debt or printing money, directly or indirectly.

    A completely different question is whether the current government is responsible for this mess. Here I am rather sceptical. It has inherited huge debts from Big Sinck, OSA has left the idiotic ban on wage cuts and the IMF determines financial policy. COVID19 is a global catastrophe that has also hit Barbados. Our options for action approach zero.

    The important thing now is to tell the people the truth. That’s why we need a great communicator like our leader Mia Mottley. The more openly the true situation is made clear to voters, the fewer disappointed voters will vote for the wrong party, i.e. the DLP, in 2023. In particular, we should not give the wrong impression that the economy can be diversified just like that. We lack the foreign currency capital to do this. So our only hope is that the tourists will come back as soon as possible.

    A first step would be, so to speak as a welcome to the tourists, to abolish the tourism taxes introduced in 2018. Also the property tax for foreign villa owners on the island. Unfortunately, this group is currently unable to enjoy their swimming pool in the gated communities and on the ridges and therefore deserves tax relief as compensation from 2020 to 2025. We must not always think only of the “most vulnerables”, but must also keep an eye on the top performers, who bring many millions of foreign currency into the country every year.

    Like

  • The “bond issue” is a joke. It will not – can not – achieve the aims for which it was ostensibly set up to achieve. It may fulfill some other objectives but not the ones that it says on the tin.
    Expect to hear rumblings of more taxes by year end.

    Like

  • @Dullard

    What are the objectives as you understand them to be?

    Like

  • NorthernObserver

    The point is, the GoB isn’t laying off/firing it’s direct employees, at least for now. BOSS eases the pressure on the unions, and that sticky ‘legal tender’ issue. Plus other options are less attractive.
    The GoB has a continuing liquidity problem, which is being exacerbated by revenue declines. The ‘financial system’ is liquid, it just isn’t govt owned or controlled ‘liquid’.
    The recurring ‘threat’ to the priv sector is devaluation. Yet, I cannot see 5%, being adequate to attract them beyond patriotic emotions.
    I ‘believe’ the GoB can extract liquidity, but going forward it has to be collateralized. Or seized.
    I expect (hope?) they have nightmares re A/R write-offs, pardons or whatever word is chosen. That is liquidity they need. And we’re owed.

    Liked by 1 person

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