Economist’s budget concerns

McCarthy Marie
McCarthy Marie

Economist, McCarthy Marie, has indicated that there are a number of issues which surfaced during the presentation of the national budget which are grounds for concern.

He told DNO the fact that the Dominican economy contracted in 2012 is not a good sign.

During the presentation of the budget Prime Minister Roosevelt Skerrit, indicated that preliminary GDP estimates show Dominica’s economy recorded -0.1 percent growth last year.

This is in contrast to an estimated growth of 1.9 percent in 2011, according to records.

“This is not a good thing,” Marie said. “We are going in the wrong direction.”

Marie is worried that the amount of taxes the government intended to collect for the nation’s coffers did not actually materialize. “It seems that the government now understands that the population of Dominica cannot pay all the taxes to provide all the services that the public wants,” he noted.

He pointed out that the government was able to fill the gap with monies from the Economic Citizenship Program and this is now being expanded “with the intention of collecting more revenue from that source.”

“I think they are doing that on the assumption that the economy will remain weak, at least for this current fiscal period,” Marie noted.

Skerrit projected that the economy will grow by 1.6 percent in 2013 and although Marie described this as ‘weak’ he said it is feasible through a 45 percent increase in calls by cruise ship visitors during the tourist season. “If that happens, it should pump some extra money into the economy,” he stated.

Marie is suggesting that the government impose extra taxes on the import and sale of unhealthy foods such as sugar in an effort to prop up the economy. He argued that there is an explosion of non communicable diseases which is placing a burden on the nation’s health system.

“We have no taxes on sugar,” he noted, adding that if there were taxes on all the sweet products being imported, there would be an increase in government revenue.

Marie described the budget as “something that was expected.”

“I expected there would be no increase in taxes or no decrease either,” he noted. “No increase because the population cannot pay any more taxes and secondly, no decrease because the government needs all the revenue it can get, so they have no leeway to give any freeness to anybody

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  1. NRT
    July 28, 2013

    Lower customs duties on everything, especially for businesses, and increase duties or taxes on alcohol and cigarettes.

  2. July 27, 2013

    marie please tell the government to put in a land tax. much of the lands of Dominica in the fore sign hands…and lawyers and other “real massa-type-colonial”

    thank you.

    I am available to discuss more economic growth areas for the government. tell marie to contact me- brutish citizen on 1 acre

    oh last thing: tax the rich and wealthy differently than the middle class and lower classes. -assets-base tax!

  3. Glo Chaud
    July 26, 2013

    Marie some straight talk would help more now than skirting issues to remain in certain people good graces….Where Gordon Moreau nah….sometimes all the indigents have to give their children is sweeten water and you want to add to their pain? I think it was you who asked Dominican women recently to go make more children; now this eh? why not recommend an environmental tax on fast foods like KFC for all the containers their patrons throw in drains and valleys? why not ask the government to reduce the number of advisors or ministries that would probably add a great bit into their coffers to run the country with integrity. why not ask them to take a cue from Cuba and fix things before they actually break and be more proactive with the agricultural base of the country…

  4. July 26, 2013

    Skerrit, they stupid, they greedy, they lazy, you got them by their cohones, squeeze them a Little harder :-D

  5. Kay
    July 26, 2013

    Well if we increase taxes on high sugar foods, we should decrease taxes on the healthier options because a lot of people go for the unhealthy foods because they are very cheap.

  6. is me oh god
    July 26, 2013

    Finally I am hearing something that makes sense because prior to this all I was hearing from the government side is ” a surplus”. One thing though: Mr. Marie should be blunt and tell the government that they need to get a value of all properties and villas built in the last 14 years and if salries don’t match value of such property then the real owner should pay [email protected] of value in taxes to the country. Also, those who got monies in the name of housing revolution, should pay 50% of current value to the state. Too much of our tax money was dumped by them.

    • Michael Moses
      July 28, 2013

      Amen my friend,, truth, Hope it will be heard by those who should read and listen,

  7. T mama
    July 26, 2013

    Poor Management in Government, these guys do not know how to run the Country and they are not taking proper advise…we are importing so much and not exporting enough…even the boats coming in at Port Authority are less…..we need a change NOW!!!!!!!!

  8. BB
    July 26, 2013

    I believe that the idea of increasing the taxes on sugar and sweet products is am attempt to decrease the consumption of unhealthy foods, especially since obesity, diabetes and other lifestyle related illnesses are on the rise. This puts an even bigger strain on the government spending on the health sector……especially since it has become a free- for- almost- all system.

    Fair analysis of the budget…..Mr Marie should sit with the gov to give more suggestions of generating economic growth.

  9. July 26, 2013

    “It seems that the government now understands that the population of Dominica cannot pay all the taxes to provide all the services that the public wants”

    Policy makers probably do realise this, but the solution to this isn’t more taxes, it’s less spending. Countries all over the world are finding out that government cannot act as a fairy godmother, and Dominica is no exception.

    Negative growth is a matter of great concern. The only solution is to have an environment conducive to entrepreneurship and foreign direct investment, and nothing dampens those faster than taxes and regulation.

    • doh do dat
      July 27, 2013

      That’s a neo liberal view there.

  10. Just Reading
    July 26, 2013

    I agree 100% with Marie that more taxes should be put on non-healthy foods. Dominicans once live in an environment where most of the food consumed came from the soil…now it is rice and spaghetti Dominicans want to eat…our import bill surpass our export bill and no economy can survive with such an imbalance in trade

  11. Jail-corrupt-leaders
    July 26, 2013

    Marie the Govt should put more taxes on villas, modest homes that appear with unknown incomes :lol:

    • Intransigent one
      July 26, 2013

      My sentiments are similar. You left out Throw away the Keys.

  12. AP
    July 26, 2013

    I think Marie is not saying raise taxes on sugar and sweet products just for extra revenue. It is to offset extra burden created with the high consumption of these types of products since they are linked to many non-communicable diseases (like diabetes, cancer, heart disease, etc). Caring for people with these diseases strains the health system – which in effect causes alot of spending on healthcare. That to me is the rationale for taxing sugar and high-sugar products. The government cannot afford for too much longer to pay for the bad habits of its citizens… it will bankrupt the country. And while Skerrit has been doing good in terms of building infrastructure, he will do best to lure high impact investors to Dominica. The more jobs created, the wider the tax base created.For example, if the govt leases land ($99/yr/acre) for investors to come in and build, then it’s a win win for Dominica. Once they have built, it will spur competition, additional investments and jobs galore. The way Skerrit has done it (grants and loans) will not sustain DOminica and can only perpetuate the beggar mentality. Dominica must drive its own success and guarantee its survival.

    • JAGOTS
      July 26, 2013

      While we at it, increase the taxes on fast foods, like KFC, Pizza Hut etc….claims can be made as well that these foods contributes to NCD. And press for a bigger cut of the budget to go to education so that persons can be educated and sensitized that because these foods are sold it does not mean they have to be purchased because of the health risked and factors.

      Now how does an increase in taxes on these foods help the economy? I don’t know so am asking. In my limited mind I would think higher taxes would mean higher prices to the consumers, and if they cannot afford it then the sellers/suppliers at a lost. Now would that create a domino effect, like cutback on staff etc….
      These are questions an ordinary man on the street would ask.

  13. Unbelievable
    July 26, 2013

    How can you recommend increasing taxes on Dominicans for sugar? These people cannot afford more taxes,the country is suffering,salary is low and living standards are low.The government are paying post office workers 300-500 dollars a month and teachers get paid less than $2000.EC yet a good pair of shoes cost 500EC.On another note who am I to talk when is them same Dominicans that are so blinded by looks and talk that they continuously elect a government that are saying things are happening but not visual..When will Dominicans wake up and small the coffee beans before Skerritt sell allu?

    • Unbelievable
      July 26, 2013

      Correction…smell the coffee(not small)

  14. Joeble
    July 26, 2013

    Dominique tros dou. Put taxes on the suga….Lol!!

  15. Observer
    July 26, 2013

    Good analysis. A few questions though. Is there any example of any economy anywhere in the world of similar structure like Dominica’s to have recorded a resugence in its economy. Is it true that the major economies in the world are yet to realize any improvement in their economy. How will the present state of economies in Europe, USA, Britain etc (traditional donors and major trding partners) impact Dominica’s economy? I am now listening to Spaggs in his response to the budget. What a show of inconsistencies, disjointed thought process, irrelevance, serious lack of coordination in the presentation!! Spaggs is jumping here there and everywhere in a dubious search for cohesiveness in presntation. Is that Dominica’s best version of a Leader of Opposition?I am waiting for the point in the presentation where I will a budget of a working man – who has lost the support and respect of his very own colleagues such that they have moved to replace him in the position.

    • looking
      July 26, 2013

      Spaggs only had yesterday to to prepare his response. The budget took most likely months to prepare…

    • July 26, 2013

      There are quite a few examples of small economies going from malaise to prosperity. Nearby examples include the Caymans and Bermuda, but others to consider would be Iceland, Mauritius, Singapore, and Hong Kong.

  16. voir dire
    July 26, 2013

    Thanks mr.Marie for your in lucid and candid piece.Your suggestion on increased taxes on sugar and sugar products is quite relevant.I suggest that you sit with this incompetent government and look at ways to grow the economy.

  17. Top cop
    July 26, 2013

    The Government should impose more taxes on RUM and CIGARETTES

  18. IPO
    July 26, 2013

    Hector is on alas

  19. Anonymous
    July 26, 2013

    So selling passports is the only way we can improve the economy???? Come on !!! for God sake!!!! all the economist in government some of them take every opportunity to remind people that they are economist and have masters and doctorate degrees but they have not proposed or implemented any concrete initiatives to develop the economy and create jobs for young people ………they are all a waste of time!!!!!

    Have we identified the growth sectors and potential growth sectors of the economy? What are the plans for those sectors ……..plans to generate increased revenue and jobs !!! We should stop this nonsense of just quoting GDP figures and percentages in growth of the economy because those of us who are real practical economist know that growth in GDP does not necessarily translate to an increase in well being of the average citizen unless people have JOBS yes JOBS and decent paying JOBS in order to benefit from it.

    Using grant money and soft loans to inflate GDP figures and generate growth that does not benefit the average citizen is like handing a hungry man a well sealed BEAUTIFUL SWEET SMELLING bowl of food only to find out that there is no damn food when he opens it. This is so disrespectful the way the so called know its all’s of our society think they can full educated young people with this bull shit.

    The government, the opposition and senior citizens who claim to be qualified and experienced have all disappointed the youth and young adults of this country !!!! Again i will say as i usually do SHAME ON YOU and YOU GUYS DON’T GIVE A SHIT ABOUT THIS GENERATION OR OTHERS TO COME. SHAME ON YOU!!!

  20. Mc's student.
    July 26, 2013

    “We have no taxes on sugar,” he noted, adding that if there were taxes on all the sweet products being imported, there would be an increase in government revenue
    Interesting to be noted here by Mr. Marie.
    If some Health economics could be added here,taxing sugar would not only raise taxes.Look at the implications on health.In addition the vast import bill on Chicken and excessive BBQ-ing, an iincrease in Alcohol taxes and cigarettes by extension could go a long way in boasting taxes and health on Island.(as groovy B would say.-the on island partonly not the!Adding a tax on sugar Mr. Marie wouldn’t it lead to a decrease in demand and or substitution for vizoo? These are some of the facts I learned at 6th form college and at university later back in the day.
    It is with respect for my former teachers at SMA and the 6th form college. Including Mr.Marie who taught commerce then and van Leblanc. Mrs Marie also taught me french in 4th form.

    • Mc carthy MARIE
      July 26, 2013

      The entire point about taxing sugar is to make it more expensive so that the population would consume less of it, not to raise revenue as such. revenue would be raised because sugar like tobacco is addictive and some persons would pay the higher price rather than reduce their intake. We could consider the tax they pay on sugar a down payment on their later hospital bill!!!A healthy population is critical for a healthy economy. I agree with you that increased taxes on alcohol could raise some additional revenue, but not on cigarettes since Dominica might actually have the distinction of being the first place on earth where tobacco use has for all practical purposes come to an end although we still have a tobacco factory. I wonder who is using their products

  21. Lougaoo Mem
    July 26, 2013

    Problem #1. Dominica has the biggest government per capita in the region.
    #2. Agriculture has been on a down-turn and the people are less enthusiastic in working their lands due to the lack of facilitating overseas markets for their produce.
    The high VAT is no help or comfort to the poor who are unable to meet their basic commodity needs.
    And there’s much to be done in order to enhance our tourism industry. We continue to have robberies and attacks against the few tourists who visit or beaches.

  22. Robo
    July 26, 2013

    very objective review, my country man.

  23. Debull
    July 26, 2013

    I expected there would be no increase in taxes or no decrease either,” he noted. “No increase because the population cannot pay any more taxes and secondly, no decrease because the government needs all the revenue it can get, so they have no leeway to give any freeness to anybody… SO what are you suggesting adding taxes to sugar for…. You must be one of the few people that can afford to pay more taxes…. Economist,it’s all about the numbers for them but no regards to the sufferers.

  24. Views Expressed
    July 26, 2013

    Marie,…it is clear we have an inexperienced Prime Minister in office, who before taking this mantle position was not engaged in any developmental work, strategic planning that we now of nationally. The budget is just to please party faithful’s and blind loyalists’. The country is broke, has no effective plan for sustainable development, we are a begging country and this government performs the art of beg and ask well. You conclusion on taxes is so correct, and this government has no ideas, never had, and are destroying this country to more poverty.

  25. linky
    July 26, 2013

    people canot aford sugar but put tax on it i wounder if that would save the unemployment problem we facing in dominica

  26. crying
    July 26, 2013

    Alas poor Dominica!! You talking about population if Skerrit comes back in power Dominica finish cuz young or old going to run away !!! Lord put hands on us and remove this dark clouds we have above us!! Smh

  27. LOL
    July 26, 2013

    In your mind they will not give freeness. They thive on Freeness especially since there is talk of elections.

  28. Pedro
    July 26, 2013

    The real problem of Dominica is poor management and leadership. The people are lead to believe that they could sit and wait for manner from the loving Farther. The Government spread free money so that they could win elections and the people believe they should sit and wait for free money to take care of themselves and their families. Rather than invest the countries resources in the creation of wealth, it is being used to feed a selected few with egg, butter and milk.

    • .
      July 26, 2013

      Thats what they doing. Investment in the country’s resources – the geothermal plant for example

  29. IluvmyPm
    July 26, 2013

    Upside down inside out, Marie saying the people cannot afford to pay more taxes then u saying the Govt should impose taxes on sugar.

    • Peacock
      July 26, 2013

      You have to see the benefit in what he says –leading to a healthier lifestyle. Therefore the less sugar you use, the less tax you will pay, and the healthier you will be as we will see a significant reduction in the non-communicable diseases and obesity which are currently sending Domiicans to their early graves.

      • Anonymous
        July 28, 2013

        people tend to eat poorly when all they can afford are the unhealthy choices. imagine a bottle of water costs more than a bottle of soft drink much less the cost of a similar capacity box/can juice. you buy the lower cuts of meat,the more fatty parts of the chicken etc, you eat less vegetables cause those cost way more than rice or bread… so the health concerns may be correlated to our increased poverty over the years. however i think Mr Marie is way off, and it may be indicative of his age and the era he trained in.Right now , nothing but increased production and diversification of the economy. we need to start adding value to the vast amount of local fruits and other tree species we have, with emphasis on export but a product of increased shelf life and improved packaging. we need to think about sustainable use of our forest resources,i.e selective harvesting of trees, use of non timber forest products, such as the gum and the liens and wild fruit.
        now these small and micro enterprises creates jobs along the value chain with farmer to bulkers to processors to marketing firms to shipping making money of the various products. then you know what, the government will benefit two fold, increased importation of capital both foreign exchange and monies from taxes and fees. there is also the fact that some of thses are good quality jobs which promote the use of science and technology which will help modernise our society.. and imagine one would have thought that our alignment with China would have brought this approach to be born here, with the importation of new manufacturing plants scaled to fit our production levels and so on… this is why this present group of individuals are poor leaders of our country and we need a change in our approach.

    • DA Love
      July 26, 2013

      My thoughts Exactly, it’s not like disposable income of Dominicans have increased so much that they can afford to pay more taxes to appease sugar addictions. I could agree with higher taxes on the imports of LUXURY/unnecessary sugars to discourage their importation..but as he rightly said Dominicans can’t afford any more taxes..

    • Mc carthy MARIE
      July 26, 2013

      That is precisely the point. Since we cannot pay more taxes we would reduce our consumption of sugar and become healthier. No contradiction there.

  30. Truth be told
    July 26, 2013

    Well observed Mr Marie. Dominicans will soon understand that nothing is free and that all the government freeness to supporters in the past will come home to bite our backsides in the future – interestingly it seems to have started already, if this budget is any guide to go by the trend is worrying! I feel sorry for any government that have to come in after this government to fix this mess. Dominicans will forget who did that to them and they will blame the new government. I would just leave Dominicans with their labour government and when the destruction begins to hit home they will feel it and understand that this is not a joke. The future social and economic stability of Dominica is now at risk under this Labour party government. We have gone too far back under this Labour party government! ‘Sa ki pa ka tan yo kay copon’!

    • D A
      July 27, 2013

      you are soooovery right you said exactly what I would have said.Thank you so much. Dominicians doh start to see MISERY yet LATTER WILL BE GREATER

  31. the economist
    July 26, 2013

    Can’t we realize the economy in is in an a recession : Increase umemployment, reduce consumer demand and lack of Investments from businesses. We are in a deep hole. Wake up people

  32. the economist
    July 26, 2013

    I blame Mr skerrit for the present decline in the economy. Bad policies of china has lead to this contraction of the economy. Expansionary fiscal policies is design to increase GDP, Increase Demand from consumers and to increase employment. This can only occur when localls are employed on the various projects. When a dominican man is employed: a job is created, he is now able to go by courts and buy a tv hence consumer demand is increased, he can build a house, he creates employment and our GDP increases. But when the chinesse come and do everything, this doesn’t happen, and hence no money flows into the economy and we doesn’t get the multiplier effect. We need to change those polices, and apply Marco economics in the way its suppose to be apllied. Mr skerit u can’t change the rules and expect it to work. We are in a recession and we have no expansionary fiscal policy which is design to correct this. Either u increase government spending and decrease taxes. But government spending does reach the poor man who is unemployed, unless he was chinesse. We need to produce more stuff to be able to finace our budget, not tax an economy in recession

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