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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


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401 responses to “National Meeting Hand”


  1. 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.


  2. @Miller

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


  3. 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


  4. @Greene

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


  5. the same way Greenidge and MAM argued that it would

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


  6. 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.


  7. 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!


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


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


  10. @Econodini

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


  11. @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?


  12. 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


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


  14. @ 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!

  15. WURA-War-on-U Avatar

    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!!!!”


  16. @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?


  17. @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.


  18. @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.


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


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

    >


  21. 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.


  22. @Greene

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


  23. @ 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.


  24. @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.

    >


  25. @ 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?


  26. @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.


  27. @ 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.

  28. WURA-War-on-U Avatar

    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..


  29. @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.


  30. @ 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.


  31. @ 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.


  32. @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.


  33. 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?


  34. @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.

  35. William Skinner Avatar
    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.

  36. Disgusting Lies and Propaganda TV Avatar
    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.


  37. @ 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.”

  38. Critical Analyzer Avatar
    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.

  39. Critical Analyzer Avatar
    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.

  40. Critical Analyzer Avatar
    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.


  41. “…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 …”


  42. @ 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


  43. David,

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

    maybe the same as you referenced


  44. @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.


  45. 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

  46. Disgusting Lies and Propaganda TV Avatar
    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.


  47. @ 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.


  48. 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.


  49. @Dullard

    What are the objectives as you understand them to be?

  50. NorthernObserver Avatar
    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.

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