Daily Archives: November 18, 2006

I Can’t Possibly Be Out Of Money. I Still Have Cheques Left!

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I Can’t Possibly Be Out Of Money. I Still Have Cheques Left!

BFP reader “Akabozzik” provided the above caption to the photo of the Father of First World Barbados, Prime Minister Owen Arthur.

Robert and I laughed till the tears came.

Thanks Akabozzik (what kind of a name is that?)

Clive

See the original BFP article and photo here.

UPDATE: BFP Readers Provide Additional Captions To Prime Minister’s Photo

See the comments section of this article for some other photo captions provided by BFP readers. Perhaps you have an idea for a caption too?

43 Comments

Filed under Barbados, Politics & Corruption

Barbados Airport Exit Tax Now Hits $60 Per Person!

 

More Evidence That Barbados Is Running Out Of Money

No matter how the politicians try to hide new taxes… by breaking them down into smaller “license fees” or by setting up government corporations to construct or manage infrastructure, and then letting the corporations charge “service fees” – its really all just taxes.

And you ain’t seen nothin’ yet, folks – because the piggy bank is empty, but the government just keeps on spending!

Our friend Adrian Loveridge isn’t fooled though – and he again questions the wisdom of a government that tries to shake-down tourists who are the very life-blood of the Barbados economy. He also questions the apparent inequity and inconsistency of government subsidies that favour large corporations over smaller, independent tourism businesses.

Take it away, Adrian…

Of course a privatised company, Grantley Adams International Airport inc., could not collect taxes, that is a Government prerogative, so the name has to be changed to a ‘service fee’.

But I wonder again if the announced increase of 140% including the additional BDS$5 (US$2.50) security charge has been thought through?

To maintain visitor arrival numbers, the Barbadian taxpayer has over the last five years been forced to pay massive subsidies of up to US$300 in the United States and UK Pounds 150 in the United Kingdom for every person booking the Best of Barbados package.

Just in the fall period of 2006 alone the 15,000 stated Brits that were expected to book this package would have cost the taxpayer BDS$8.4 million (US$4.2 million).

Based on declared average stay and spend by the Barbados Statistical Service, each subsidised Best of Barbados arrival would have had to spend more than four times what the normal visitor does for Government to recoup these subsidies in taxes.

As the mass of visitor arrival numbers are largely driven by Tour Operators or Wholesalers, I wonder if the policymakers have really thought through this massive ‘service fee’ increase?

Will those thousands of holiday makers that have already booked (and paid) for their package happily accept the departure fee increase or will they expect the tour operators to absorb it?

Based on the viability and lack of profitability of tour operators in our largest market, the UK, these companies will be very reluctant to absorb yet further costs.

And to add insult to injury, we are told this more than doubling of a departure tax is necessary to help pay for the improvements to the airport.

Huge amounts have also been spent on Bridgetown Port. Only last week a big fanfare was made over the official opening of berth number five which cost a quoted BDS$12 million (US$6 million) alone.

Will the privatised port authority also be raising ‘service fees’ to users of that facility by 140 per cent?

This would certainly assist in repaying the vast additional investment in the port and possibility help cover the recently announced additional subsidies given to the world’s largest and most profitable cruise ship company, Carnival Corporation, to prop-up passengers arrival numbers.

Adrian Loveridge

Story Links

The Nation News: From $55 To $60!
Barbados Free Press: Barbados Tourism Killer – Airport Departure Tax To Double

Photo: Grantley Adams Airport, Barbados – via MicroSoft Flight Simulator. Soon, this will be the preferred method of visiting the airport. 🙂

18 Comments

Filed under Barbados, Barbados Tourism, Politics & Corruption, Traveling and Tourism

Barbados Government Double-Talk: “International Loan To Prop Up Foreign Reserves Is Not To Prop Up Foreign Reserves.” …Huh?

Like an uncontrollable spend-thrift spouse, the Government of Barbados has been a shopaholic credit addict for years. And just like a spouse who cannot resist shop signs offering “No Money Down – No Payments Until Next Year!”, the Government is having to juggle the books more and more to conceal the truth from the rest of the family.

The Truth About The New “Foreign Reserves” Loan

The Government of Barbados is borrowing money to make payments on previous loans. That is the truth.

Oh… government says this latest US$65 million dollar international loan is to “strengthen foreign reserves”, but why are the foreign reserves so low? Where did the money go?

Think about that.

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Barbados Is A Family – But Father Is Out Of Control With Chequebook In Hand

Think about your family finances – because despite all the smoke, mirrors and gobblety-gook talk of the spend-thrifts in government, managing a country’s finances isn’t much different than managing your family’s money. Yes, everything is on a larger scale, and “Father” has the ability to sign a loan that commits all family members to make payments forever, and to pledge all family assets against the loan – but in the end, it is only the scale of things and the power of the head of the family to tax all family members that is different from your family’s finances.

Foreign reserves are like the normal reserve in the family’s working account – maintained so we don’t hit a zero balance and to show the world that we have enough cash in the kitty to be credit-worthy.

But our reserve balance has been pillaged to make payments on all those previous loans that Father took out, and the bank is calling to warn that cheques will start to bounce unless we put a little more into the account.

A New Loan To Make Payments On Previous Loans

So what does Father do now? He commits the family to yet another loan on top of all the previous loans. That buys some time, but to keep up with the ever-increasing payments, the family members will have to work harder (more taxes). Father keeps borrowing and family members will have to continue making loan payments long after he retires.

Sometimes Father borrows to pay only the interest on the loans – so the family is paying interest on the interest on the interest…

If Father’s irresponsible behaviour continues, it is possible that sometime in the future, family members will even have to contribute what little savings they have (devalue the currency).

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Mommy Helps To Deceive The Rest Of The Family

From The Nation News…

Griffith: Debt under control

GOVERNMENT is properly and effectively managing its debt situation.

That point was made clear yesterday by Minister of Agriculture Senator Erskine Griffith, during debate on a resolution to approve the borrowing of BDS$130 million on the international capital markets to strengthen Barbados’ foreign reserves.

Griffith told the Senate the loan was not to prop up the reserves since they were not in a state of collapse. He suggested that those who criticised Government for its borrowing regime, simply did not understand…

… continue the entire article at The Nation News (link here)

Photos

Father of First World Barbados, Prime Minister Owen Arthur

Mother of First World Barbados, Senate Leader Erskine Griffith

Photos courtesy of The Nation News. Fair trade for the link.

29 Comments

Filed under Barbados, Business & Banking, Offshore Investments, Politics & Corruption

New US – Barbados Tax Treaty Excellent For Barbados

After rumblings last week that the Canadian government is targeting Barbados for some tough new tax laws, we now receive news that the United States has cut the witholding tax in half for dividends.

What do I know about international investing? Nothing… but the CBC says that this is good for Barbados. Congratulations to the government and our negotiators…

From the CBC…

Barbados has been made a more attractive jurisdiction for investment by companies doing business in the United States.

That is because the US Inland Revenue Service has now deemed the island a “satisfactory” jurisdiction, allowing local firms to benefit from a reduced withholding tax of 15 per cent on dividends. That is half of what it used to be.

Barbados’ lead tax treaty negotiator, Francoise Hendy, says the outcome is a direct result of the successful re-negotiation of a 1984 Barbados/ US double taxation treaty.

… read the full story (link here).

Previous BFP Story: Canadian Government Targets Barbados Offshore Banking

2 Comments

Filed under Barbados, Business & Banking

Stunning News Coverage By The Nation News…

Will The Nation News be nominated for this year’s Pulitzer Prize? Speculation builds that a small newspaper from a developing island nation just might be in line for journalism’s most prestigious award…

Just Kidding.

Update

BFP reader “Wondering” commented..

“I am surprised that BFP would devote time to such utter rubbish,”

BFP Answers…

The point is not that the Barbados Free Press would devote time to such rubbish – the point is that the Nation News would devote time to such rubbish. Our post is a sarcastic comment upon the state of professional journalism by “Barbados’ Leading Newspaper” – as The Nation News declares on its banner.

Was our point a bit obtuse, or does Wondering need his coffee this morning?

10 Comments

Filed under Barbados