As the Mia Mottley administration prepares to deliver its 2026 Financial Statement and Budgetary Proposals on Monday afternoon, two university economists have taken differing positions on what the priorities should be for the coming fiscal year.
At the same time, one of them has identified a number of measures announced in last year’s Budget, suggesting they have trickled down to the average man.
Lecturer in economics at the University of the West Indies at Cave Hill, Dr Ankie Scott-Joseph, said on Friday that top of the government’s plan of action must be generating revenue through the productive industries.
Dr Scott-Joseph told Barbados TODAY in an interview: “As it stands now, we have a lot of emphasis on tourism; and tourism is one of the most vulnerable sectors; and what we are seeing now, is a lot of uncertainties because of geopolitical and other aspects that affect our tourism. And we have also seen thus far, the exodus of [Trinidadian conglomerate] ANSA McAL.
“It means we are going to have a little struggle, when it comes to generating revenue. And with the absence of those, it is going to put pressure on a simple tax revenue generator, which is the VAT [value added tax]. And it is going to put pressure as well, on tourism income.”
She added: “We have to have a greater focus on how to build the resilience we have been trying to build. So, we have to put a lot of emphasis on renewables… speed it up. Speed up renewables and target the productive sectors.”
The economist argued that by doing this, the country would increase the levels of revenue from those areas because they are what are available.
She therefore advised against spending “too much” on tourism due to its vulnerability.
“With energy, energy carries up the costs of everything that we do. And once that goes up, everything else goes up. And when everything else goes up, obviously we want to get higher revenues… because, the more you spend, the more taxes you are going to have to pay. At the same time, that is going to have a multiplying effect back on the government’s spending. So, I would say, most urgent is the productive sector; manufacturing and building our resilience. In other words, dealing with our renewables.”
She then turned to the impact which last year’s budgetary proposals had on the average person and identified several areas of benefit.
“If I can look specifically at the Budget in different parts, and looking at the objectives that the government did mention, I would say, two to three of those incentives have really trickled down,” Dr Scott-Joseph said.
“Workers’ empowerment: we see that workers have had greater job opportunities, and the opportunities for higher wages, which gives the man at the lower end a stronger purchasing power… meaning, he has more available to him.
“The other one has to do with public health. The government has been spending a lot of time over the last year or so trying to address a lot of issues that are seen in public health. But most of them are more infrastructural, rather than dealing with health itself. But the infrastructure is also very important. But largely it seemed to have been more with infrastructure than disease control. So, those two would have trickled down to the average man.”
The priority for her colleague, Dr Antonio Alleyne is crime.
In an interview with Barbados TODAY on Friday, he insisted that if crime and violence are not arrested, then all the other economic and social initiatives would be of little effect.
“Priortising crime and so on… those are the linchpins for actually having economic growth. We also have to monitor what’s going on outside for such would definitely affect the finances… this would be key, because we need to buttress social programmes; we will need to fill in where necessary; probably prop up spending; we have to maintain the peg. All those basic things.”
He continued: “Anything that speaks to continually diversifying the economy in conjunction with tourism… and as I said, that crime issue, we need to get that handled from a social perspective. I can give you the commercial side, but if that doesn’t change, we will see much harder times, because it’s going to run tourists first, and then that is going to deplete any revenue opportunities, and therefore deplete any opportunity to diversify in any way.
“That’s basic common sense. You deal with the crime and those niggling issues first. Debt – and you know I am a big critic of debt – but I would say at this point in time, it is nothing that we should worry about. The Central Bank and those monetary authorities need to keep their eye on it for sure. But right now, it is below the hundred per cent [of GDP]; it has come down significantly. I don’t know if there are balloon payments to be paid at any point, but, as far as I know, having it down is a very good thing.”
While the debt is down right now and the country has a window of opportunity, the government should seek to exploit it and make things better at home, Dr Alleyne suggested.
The 2025 Budget – five key changes
- Resilience and Regeneration Fund: Catastrophe Fund in the National Insurance scheme replaced by a higher 0.25 per cent contribution on full salaries.
- Cost of living: New 20 per cent tax on popular salted snacks and zero-rated duty and VAT on selected fruits.
- Borrowing and home ownership: Corporation Tax on profits from residential mortgages cut to nine per cent (over $250 000) and 4.5 per cent (up to $250 000).
- Workers’ support: Union fee allowance up to $360, automatic minimum wage rises of at least two per cent a year from 2026, and extended maternity and new paternity leave.
Household bills and travel: Reduced VAT on the first 250 kWh of household electricity extended to March 31 and regional Airport Service Charge cut from $70 to $40 for one year.
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