(Excerpts of the National Address by the Hon. Dr. Godwin Friday, President of the New Democrat Party and Leader of the Opposition Pt.2)
Cost of Living
The ULP’s self-absorption and failure of governance have real consequences for our people. The government has failed to address the most urgent and pressing issue facing the country now, today: the cost-of-living crisis.
As cost-of-living increases, our standard of living falls. Life has become more difficult for families, many of whom are now forgoing essentials and cutting back in every way they can. It is a sad reality that those who have the least are hardest hit. Spending on necessities takes up a larger portion of their income.
Increase in cost of living is not just a challenge for today, but for the future as well. Rising prices, with stagnant wages, undermine our standard of living. They force persons to dip into limited savings, to postpone retirement (if possible) or to put off making big life decisions like getting married, building a home, or mortgaging a family home to pay for a child’s education. Many are forced to lose their dignity and self-respect to survive. For our businesses, it hampers the ability to invest, inhibits hiring of new workers and retards growth.
The shocks of the COVID pandemic have been exacerbated by the Russian war in Ukraine. The impact on food and fuel prices has been felt worldwide. The global trends impact us in SVG as local prices soar. I do grocery shopping frequently in Kingstown, — my own errands or when Mrs Friday gives me her shopping list, purchasing from the vendors and the supermarkets. So, I see the increases first-hand. And I, too, have questioned the cashiers from time to time to check if the price of one item or another was not an error, because it had increased so much.
Over the past 8 months, the prices of food, fuel and other goods have risen considerably. Current prices at a rural shop on the mainland show that a pound of chicken back has increased from $1.75 to $2.50, leg quarts for $3.00 to $4.00, turkey from $3.50 to $5.00, a small margarine from $4.95 to $6.50, 1 litre of cooking oil from $10.95 to $16.00, a bag of penny loaf bread from $2.00 to $3.00. The cost of electricity has risen a lot. The fuel surcharge was 28 cents per unit in March 2021 and was raised to 72 cents by July this year.
In a recent survey reported in a local newspaper, nearly 82 per cent of respondents said that the hikes in cooking oil, electricity and food prices have caused them to cut back on basic food items with many saying they are now paying $200 more for the same basket of goods bought before these increases.
Gasoline at the pump is now at an all-time high of $18.16 per gallon. Obviously, the high gas price makes things harder for all motorists and puts pressure on minibus operators, taxi drivers and fisherfolk who use fuel in their work daily.
High cost of living is not some fleeting phenomenon that will pass in another month or two; it is expected to be with us for quite some time. The government has a duty to do everything it can to cushion the blows of rising costs on households and protect our communities. Further delay in taking relief measures will only cause more pain and suffering for Vincentians.
Across the OECS and the wider Caribbean, governments have cut fuel taxes, reduced import charges, controlled the prices of basic goods, increased direct supports to those most in need and helped with utility bills. Wherever I go in the country, I hear the cry from ordinary people that they need help. “Why is the government not helping me with the high cost of living?” “Do they even have a plan to deal with this problem?”
Day after day, it becomes more difficult to make ends meet. I know of your struggle to pay light bills, to put food on the table, and to buy shoes, clothes, books to send your children back to school in September. A few days of road work might help a bit but can’t cover most of the bills. More relief is needed.
We in the NDP have a plan to immediately help to ease the effects of rising cost of living and ensure that we protect families. We urge the following:
Reduce VAT from 16% to 13% and ensure that the savings are passed on to ordinary consumers. This will help everyone across the board;
Increase the number of zero-rated VAT items. This will reduce grocery bills for everyone
Immediately repeal the Customs Service Charge increase to reduce import costs;
Increase support for lower income families by expanding existing support programs and ensure that the support is distributed based on need and not by political favour;
Provide import duty concessions for the transportation industry, which is to say minivans, buses, and taxis, and
End the unlimited increase in the VINLEC bill by putting a cap on the fuel surcharge and improve efficiency.
These measures are practical and realistic and can deliver benefit to everyone immediately. Remember, government’s revenue from VAT is boosted by the higher prices for goods and services. As prices go up, so does government’s revenue from VAT. We must put people first, not government revenues first. I said it early in the COVID crisis that we must put the money where the pain is. That is, in helping families who are being squeezed by the increase in prices.
We, Vincentians, have always known, that we are stronger when we stand together. We value community and look after one another. Everyone has a role to play in seeing us through this crisis: