By LEANDRA ROLLE
Tribune Staff Reporter
ECONOMIC Affairs Minister Michael Halkitis insisted yesterday that the government was not “callous”, despite its decision to approve price increases of certain breadbasket brands.
He explained that there was little officials could do to offset rising costs sparked by inflation among other factors.
While acknowledging food inflation as a vexing issue that plagues countries worldwide, he said the government continues to work feverishly on all fronts to bring some sort of relief to struggling Bahamians, adding the public can expect to hear “some things” very shortly.
This comes as many people struggle to make ends meet after feeling the economic pinch from a spike in food and gas prices.
On Tuesday, Mr Halkitis told reporters that some food retailers had applied to the Price Control Commission to seek approvals to increase their costs for certain breadbasket items, which includes cooking oil, corned beef, evaporated milk, flour and margarine.
However, according to the minister yesterday, only certain food brands carrying those items have been approved for price increases.
“There is no general authorisation in the increase in the price of breadbasket items,” Mr Halkitis told the Senate yesterday. “The situation operates like this – you have items that are in the breadbasket that have price control. For example, the store has corned beef. You have various brands, you have Libby’s, you have Bevans, you have Grace … you have all these brands and what happens is when an importer imports an item and if his price has gone up, in a nutshell, he applies to the prices commission.
“And so if he is importing for the sake of argument…he applies that his price has gone up on that item, he applies for the margin to be applied on his higher cost of that particular item so when it is said that government authorised an increase in the price of corned beef, it is not every single brand, every corned beef. It is a particular brand.”
Senator Halkitis also responded to critics who questioned why the Davis administration couldn’t just deny wholesalers’ request to increase the costs on certain breadbasket items.
He suggested that if the government was to take that course of action, many wholesalers may decide not to sell certain brands that are more costly to import, leaving locals with limited options.
“Well, two things can happen, over the years, it’s been the practice that that is the practice,” he said. “People import and apply for the margin to be applied at their higher costs and if you decide to not do it then … you might have to make it whole or do something else for them or they might decide that ‘Well I’m not importing it if I can’t get it’ and the government is not exercising good faith. This has been the practice since 1971 when price control was introduced and so you can either get individuals stuck with items that they have paid the cost (for) or they might decide well, I’m not going to import and we don’t have the item on the shelf so it’s a vexing issue, because nobody wants to see the cost go up.
The minister continued: “We are often asked, and I try to be as open and accessible as possible so I could provide these answers and the issue is we import so many things and we experience the inflation. Today, new data is expected to come out in the US, showing that perhaps it has peaked – hopefully and so we can see this matter starting to moderate, but I don’t want the Bahamian public to be left with the impression that the government is unconcerned or that the government is callous. We are limited in the tools in our toolbox to deal with this. We are exploring a number of things right now and the public will hear some things very shortly, but again, we have to be very measured in everything that we do.”
It is not clear by how much prices on certain breadbasket brands have increased, but according to Mr Halkitis it is only “a matter of cents”.
The government has frequently come under attack from the opposition for its decision to add value added tax on breadbasket items, which was zero rated under the previous administration.
The Free National Movement continued its criticisms this week, saying the government’s latest move only creates more economic hardship for the Bahamian people.
“The government’s announcement that approval has been given to increase prices on multiple breadbasket items continues to highlight the magnitude of the struggle of thousands of poor, working, middle class Bahamians. It brings even the need to eliminate VAT on breadbasket items urgently,” FNM Deputy Leader Shanendon Cartwright said in a recent statement.
“In the midst of skyrocketing food costs in an historic inflationary environment that shows no signs of relenting, the government remains defiant, refusing to bring much needed relief to the Bahamian people by saying VAT on breadbasket items is here to stay. The plight of the Bahamian people continues to be challenged by more ominous clouds of increased consumer prices, greater tightening of the global supply chain and fuel costs rising to now an average of $6.30 a gallon.”
Meanwhile, Senator Michela Barnett-Ellis said in the Senate yesterday Bahamians were waiting for the relief that the government had promised.