The $1000 stimulus and the waiver of the duty and CPF on basic bread items are good initiatives but we also need to do the same for fuel

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The $1000 stimulus and the waiver of the duty and CPF on basic bread items are good initiatives but we also need to do the same for fuel

The distribution of stimulus needs to be fair, and the people need to feel the impact of the waiver

Introduction

I know there is mixed reaction about the Government’s recent initiatives particularly the $1,000 stimulus. Initially, I had concerns about the stimulus as well, but my thoughts have changed. The more you interact with people, you realize that many people are hurting and need help. Even the people we think have money are also hurting. Too many of us assume that people that make a lot of money do not need help, but the truth is the more money you make, many times you end up with more expenses. Furthermore, the prices of good and services continue to escalate, and the income of individuals has not increased and so people need additional sources of income.  Therefore, I support the payment of a third stimulus because every dime helps. It is not a long term solution but it will help on a short term basis.

I also support the waiver of the duty and CPF on basic bread items, however, the Government must ensure that the consumers feel the savings. I also think the Government should waive the taxes, duty and CPF on fuel on a temporary basis. The high cost of fuel is the one of the driving factors for the high cost of living in the Turks and Caicos Islands. Fuel impacts everything. The fuel impacts the electricity cost and if the electricity costs are high, merchants need to recover their costs and they will do so through the increase in their prices to the consumer, also when the fuel price is high, it impacts the disposable income for individuals. Therefore, the landed cost of fuel needs to be reduced and this can be done through a complete waiver of the duty, taxes and CPF.

The Stimulus

I know there are concerns about whether, Government should be paying stimulus. The truth is, that is our money. If the parliamentarians can get all sorts of allowances and hefty pensions for life after serving two terms, then why can’t the people get an additional $1,000. The issue I have is that should everybody get $1,000. Of course, that is the easiest and simplest approach but there are some people that need more than $1,000 and some people don’t need it at all. There should be system in place whereby the allocation can be link to your pre disposable income. With that said, those that don’t need don’t have to apply for it like what I did during the second stimulus payment. I did not apply for the $500. Perhaps, I should have applied for it and give it to someone that needs it. Consider this, a household with two adults can get $2,000, a household with three adults can get $3,000. If the members of the household combine their $1,000, this will help them to alleviate their financial burdens.

One of the concerns that persons addressed is that the stimulus is a handout, and we need to provide opportunities for the people.  Honestly, there are so many opportunities in this country and the expatriate community recognize this and take advantage of it. The Government provides funding in the forms of grant to locals through Invest TCI. How many of us are embracing this opportunity?  Recently, there appeared to be an increase in the takeup but more people need to access these funds.  While this is a great opportunity it appears that some people do not know about it and don’t know what to do so I think Invest TCI needs to be more visible and go in the communities and ensure that assistance and awareness are done so that there will be more applicants.

Another opportunity is that there is a significant reserve category in the business licence for Turks and Caicos Islanders.  Rather than some of us embracing this opportunity, we are selling our birth rights by “fronting for individuals”

Finally, people are claiming that need access to financing.  I agree that access to financing is a valid concern, but do you know if you prepare a convincing business plan, have good record keeping and have some sort of savings or collateral, the banks will provide you with access to finance. I know many of us may not want to hear this but sometimes it is not the banks that are at fault, it is us.  We are not keeping financial records and we are not saving. For those individuals that are having issues with access to finance, there is hope though because the Government announced at the most recent Invest TCI conference, that they are in constant dialogue with the banks about more access to finance. The Government also said they are exploring providing access to individuals through the development of a Corporate Fund. Of course we need to see actions on this initiative.

The Waiver

Many of us including myself have complained that the Government needs to exempt the duty and CPF on basic bread items. They are doing so now until November. However, the Government needs to meet with all vendors and relevant stakeholders and come to a written agreement that they will pass the savings onto the consumers, and they will not increase their profit margin.  In fact, the Government should ask the stakeholders to reduce their margin like what the Government of Barbados has done.

Currently, fuel suppliers must pay a fuel tax of 64 cents, an import duty of 44 cents on the gallons of fuel imported and then the CPF of 5%.  I think the Government should remove the the fuel tax, the import duty and CPF on fuel.  I believe the consumers would see a significant change. Again, this needs to be monitored as the Premier mentioned that one of the reasons the Government is providing the stimulus is since the Vendors are not passing the savings onto the consumers.  I was very surprised with that the statement because the Government has the power to ensure that the vendors passed on the savings even if it means implementing a price control on a temporary basis.

Another thing the Government needs to do is the construction of deep water ports. This of course is a long term solution. My understanding is that deep water ports will facilitate the accommodation of larger ships which in turn can increase the capacity of imported items such as fuel. It is believed that a deep water port can reduce the cost of imported items significantly as much as 30%.

Conclusion

I believe by now most people know that I am heavy critic of Governments, but we must give credit where credit is due. The stimulus and the duty and CPF exemption on basic bread items are good initiatives. People can use and apply the stimulus how they want to do it. Of course, the grant of stimulus on a continuous basis is not sustainable but then again, the payment of pensions to our parliamentarians is not sustainable either.

These initiatives are not a waste of our money. It will be only a waste if individuals are using it on things they want rather than what they need. The waiver initiative can be a waster if the savings are not trickled to the consumers. The Government therefore must step in and ensure that this is done.

Finally, we must not assume that everyone is aware on how to access the grants from Invest TCI.  It is necessary to meet the people and guide them on what they need to do to ensure that they can get access to the grants. This will require face to face meetings with the citizens. Trust me the opportunities are here. Let us embrace them.

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