Most public employees are sincere when they say they can’t afford a cut in salary, nor an increment freeze, and they are spot-on when they say that implementing such measures wouldn’t be productive, that they would cause the economy to shrink even more. However, the government insists that what it has proposed to its employees is necessary.
As we all know, our economy has collapsed, and the government is trying to find money from every corner it can, so that we can survive. Among the measures proposed by the government are a 10% wage cut and increment freeze for its employees for three years, and the leaders of the government’s employees have countered that our leaders and their select appointees should stop living so high, and that our leaders should move to recover stolen assets, and should look into tightening the administration of the tax system.
The pandemic has caused turmoil all over the world, especially in the poorer countries; in Belize, thousands who were living on the margins have joined the ranks of the impoverished. The new government is about to present its first budget and it is being very careful in going about this exercise. Next door, to our west, thousands of Guatemalans took to the streets in November last year because they disapproved of a budget which they felt served the wealthy and disregarded the conditions of the masses.
Government employees feel that our leaders need to cut the fat. Generally, you want your leaders to sleep in soft beds with clean sheets, for the reason that you want them at full capacity to deliver on the giant task of growing the economy to better the lives of the masses. Generally, only altruists, and they tend to be left or center-left, can function at full capacity in an environment that doesn’t have the perks. Our public servants and teachers well know how much a comfortable environment enhances production. It’s tough, but our leaders might have to find it within themselves to persevere in less than ideal conditions, for a time.
In respect to the relatively high standard of living our leaders enjoy, Deputy Prime Minister, Hon. Cordel Hyde said, almost immediately after the PUP took over government on November 11, 2020, that government’s finances were in a terrible state, and that it was his view that ministers would have to take a cut in pay and allowances. In December the Prime Minister announced a 10% pay cut for ministers.
The PUP did far better than the UDP, which did nothing. Despite the pandemic bringing our economy to its knees, UDP ministers, their friends in government, and their favorite contractors continued along the same merry path they were on when the oil wells at Spanish Lookout were gushing and the Petro Caribe was rolling. We later learned the UDP’s rationale for that was that their favored friends needed the largesse to help them prepare for November 11, when they would be out of doors, at the mercy of the world.
It seems everyone agrees that increasing taxes is not the way to help make up our massive shortfall in earnings, though the government isn’t giving up on taxing fuel. The cost of fuel impacts every industry, and it’s no news to our leaders that increasing the cost of this commodity makes Belizean producers less competitive. Our governments have junkie-like dependency on fuel taxes; whenever there’s a shortfall in income the Ministry of Finance increases the take on fuel, our governments’ favorite cash cow.
Determining the tax on goods and services is a very delicate exercise, with overtaxation quickly leading to diminished returns. One fallout from too high taxes is that people turn to the underground economy, contraband, and the result of that at this time wouldn’t only be a loss of revenue, but would also be increased exposure of our people to SARS-CoV-2.
Many experts have opined that we can improve on the collection of taxes at the Customs and Excise Department, but calculating how much we can make there is no easy exercise. Many vehicles and top- shelf liquors would remain in warehouses if the government collected the full taxes. Corruption isn’t the only reason for the massive dodge of taxes by friends and family of our previous leaders, as is being revealed at the ongoing Commission of Inquiry. The fact is that taxes in Belize are extremely high.
It has been suggested to our leaders that they must aggressively pursue the recovery of assets that were stolen from the country. However, while we desperately need our money back, asset recovery is no overnight solution to a situation that is extremely urgent, and then, only a third party would be very energetic in going about such an exercise.
The PUP is smarting. For thirteen years UDP leaders and their appointees/special contractors lived off the fat of the land, and they veered not from their excesses when the pandemic struck. They persevered in their voracious feeding, cutting deals to advance themselves almost up to the day before the general elections, and now the PUP takes over and the cupboard is bare.
Those who helped finance the PUP’s election campaign are chomping at the bit. We are promised campaign financing reform, but as the third parties can attest, in our present system you can’t win without money, lots of it. We might as well not have elections if the incumbent can use the government’s resources to fund their campaigns, unchallenged. The more the UDP abused public resources, the more the main opposition party became beholden to its financiers.
The government’s employees have indicated that they are not about to budge from the position that our leaders must cut the fat from the system and implement the other measures they recommended. Given the state our economy is in, any kind of strike action taken by public employees would be packed with the potential to cause our country grave harm.
The state of our economy is what it is. It looks like our leaders can’t dodge this one. Four months ago, the ministers and the party’s appointees/financiers weren’t profiting off the system anyway, and while some can argue that they were out in the cold for almost thirteen years, what’s a few months more to help the country get through this very difficult period?
We all know that cutting the fat and the other measures won’t be enough, so the next big question is what comes after that? The money has to come from somewhere.
