What's time got to do with Budgets?
Publication: Daily Nation
Date: Tue, Jun 3, 1997
Page: 16
Byline: Terry Ally
BY THE TIME Prime Minister Owen Arthur delivers his 1997/98 Budget, it would be the latest ever delivered by any Barbados Labour Party (BLP) Minister of Finance.
His first Budget was delivered in the month of April, second in May last year and according to sources, his third could be as early as June - June 17th, and as late as after the VAT review in September.
Previous BLP Administrations tended to stay mainly within April.
The Democratic Labour Party's (DLP) Errol Barrow presented Budgets from as early as April 5 to as late as September 30.
He holds the distinction of not presenting a Budget in 1975 but having instead a "fireside chat" on the direction of economy.
Former Minister of Finance Erskine Sandiford declared his intention to merge the Budgetary Proposals and the Estimates of Revenue and Expenditure into one presentation.
There is no legal requirement for a Budget, only for the Estimates.
Section 108 (1) of the Constitution mandates that "the minister responsible shall, before the end of each financial year, cause to be prepared annual estimates of revenue and expenditure for public services during the succeeding financial year, which shall be laid before the House Assembly."
Though the Budget is not a legal requirement it is an integral part of the economic management of the island and people, especially business people, have come to rely on it for planning and wait for that familiar phrase "With effect from . . ."
The first Budgetary Statement, in 1962, was not without opposition.
Barrow told Parliament: "One honourable member has referred to the fact that there has never been this procedure before. That is not difficult to understand, because there has never been a Budget."
"What has happened in the past is that the Leader of the House or the Premier brought in a confirmation of statistics which glorified in the name of the Colonial Estimates, and in passing, mentioned that certain fiscal measures be carried out."
And with that Barrow introduced the first Budget.
On the occasion of his first Budgetary Proposal, Adams too saw the Budget as an integral part of the economic management of the country.
"Mr. Speaker, to this Government a Budget is much more than a mere recital of
fiscal measures designed to raise revenue to meet the cost of Government services," he said.
"We view this Budget as a major vehicle for implementing a package of policies which will harness the human and financial resources of the community to the task of eliminating poverty and unemployment."
Constitutional lawyer Ezra Alleyne argued for the Budget to be made law.
As it stood, he said, the minister must take a resolution to the House of Assembly asking for the chamber to "take note" of the proposals and if the House did not assent, then there was no debate.
"Taxation and financial matters are too important a part of this country's political and constitutional heritage for these matters to be left in limbo," he wrote in 1988.
"Just as the Constitution commands the Minister of Finance to present Estimates by a particular time, so also should there be rules providing for the presentation of a Budget early in the financial year."
There then, was no doubt about the importance of a Budget.
The timing of it is another matter.
Former DLP Prime Minister and Minister of Finance Erskine Sandiford came under intense criticism in 1988 when his Budget was "late".
He had announced his intention to bring the Budget and Estimates Debates closer together and eventually merge them into an eight-day debate, something with which then Opposition Leader Henry Forde agreed.
His first budget was April 7, 1987, and by the second week of April 1988, Sandiford was being criticised for a late Budget.
The private sector was complaining about "uncertainty", the Press was dubbing it as budgetary "suspense".
Sandiford said that when Barrow did not bring a Budget in 1975 he too faced criticism, both inside and outside of his party, including from "some of the people who are now defending the non-appearance of the Budget today."
"If you are going to raise taxes, that is where you come in and say 'I intend to do this in order to raise so much revenue, but not a word'," said Sandiford of Arthur's late Budget this year.
Adams also desired early Budgets "following as soon as possible after approval of the annual Estimates".
"I continue to regard this as important, not least for the purpose of ensuring the minimum delaying implementing any Budgetary measures," he said during his second Budget in 1978.
Like Sandiford, Arthur also supported a move to bring both the Estimates and the Budget into one process.
Many key people in the past were all agreed as to the importance, necessity and timing of a Budget and for some reform so as to make it part of a single financial package with the annual Estimates.