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The government has a responsibility to do everything it can to cushion the effect of the cost-of-living crisis on households in St. Vincent and the Grenadines. Further delay in implementing relief measures will only cause more pain and suffering for Vincentians.
The President of the New Democratic Party (NDP) and Leader of the Opposition, Honourable Dr. Godwin Friday, is deeply concerned with the cost-of-living crisis in the country. He raised those concerns last year in his National Address on Cost-of-Living and made recommendations for the government to implement which would have provided relief for Vincentians but they were ignored. In 2021, when the government increased the Customs Service Charge, Dr Friday warned the Minister of Finance of the impact it would have on the prices of goods in our shops, supermarkets and stores but his warnings were ignored.
In his contribution to the Finance Bill 2021, Honourable Dr. Godwin Friday, made the following comments about the increase of the Customs Service Charge on the prices of goods. He said, “During the Budget address, the matter was raised and objections were mentioned from this side of the House; although, I think the full implications of the one percentage point increase which in the Budget address was written as one percent increase. In reality, the 1% increase amounts to a 20% increase in the Customs Service Charge because it goes from 5% to 6%. The other factor to be considered and to be weighed against the good intention that the minister pointed out to this tax; is the fact that this tax is going to affect a broad range of items.
We are a small open economy; virtually everything we consume especially manufactured goods, medicine, clothing, school supplies, food items, pasta, rice, cooking oil, corned beef, sausages, Irish-potatoes, automobiles, everything is imported. What it means, the Customs Service Charge affects a broad range of items and therefore its economic impact can be masked, by saying that its only one percentage point increase from 5% to 6% and it’s only the Customs Service Charge and not the custom duties themselves.
My understanding is that the minster hopes to raise between $8 and $9 million from this single measure that occupies his two or three lines in his Budget address and he virtually congratulated himself into saying that he didn’t intend it to be a Budget in which to raise taxes. Well, if you didn’t intend it to be, then don’t raise taxes. So, we have the increase and secondly it covers a wide range of items so that when you go to the grocery store and you full your trolley, everything you put in there would have been affected by this tax so that a basket of goods will now cost more to everybody who shops whether you are earning $100,000 or $10,000 a year.
You’ve got to eat, whether you are rich or poor, you’ve got to be clothed, you need shelter. Therefore, the cement, galvanize, plywood, ‘two by four’, that you use to build your ‘shack’ or the tiles, fixtures for the bathroom and paint, if you are building a bigger house, all will be affected by this tax.”
Remember, that 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 reiterate our plan to provide relief for Vincentians. The NDP’s plan include: reduce VAT from 16% to 13%; reduce the Customs Service charge, ‘the Big Tax on Everything’ : increase support for lower income families; reduce the impact of the fuel surcharge on VINLEC bills and review the list of VAT items with a view to increasing the number of zero-rated items.
Cost Of Living Tracker
The New Democratic Party (NDP) has launched its cost of living tracker to help persons get a clear sense of the cost of living and how it has been impacting people’s lives. The cost of living tracker is made up of the average cost of key foodstuff from across the country. The NDP will continue this tracker every quarter to track what an average family spends on food and the impact on family finances.
Last week, the NDP again called for targeted support to help with the cost of living crisis. Launching the cost of living tracker, Member of Parliament for East Kingstown, the Honourable Dwight Fitzgerald Bramble, said, “Families are crying out for support during this cost of living crisis. The ULP government response has been to turn a deaf ear and ignore the problem, showing once again this is a government tired and out of touch. The NDP will always put the people first, we have set out a 5 point plan to tackle cost of living and today we announce a new tracker.”
The cost of living tracker will catalogue the average cost of a basket of goods for a family and monitor on a quarterly basis. Our research shows that the average family spends $180.00 a week on food. Further, increases in food costs are only going to put more strain on families. Something must be done urgently. Dr. Friday has outlined the NDP’s plan. And, we call on the government to put aside any pettiness and take a real look at our plan, our people need support.
The NDP cost of living tracker will also track the average weekly shopping for a family in St. Vincent and the Grenadines. It is constructed by taking the average cost across 4-6 supermarkets of each foodstuff and then taking the weekly amount. The NDP believes that by showing the impact it will further show government and other stakeholders the need for action and at the same time helping families understand the impact on their household finances.
