The current government of St. Lucia, led by the St. Lucia Labour Party (SLP), has been heavily criticized for its tax-and-spend policies, which have had devastating consequences for businesses and ordinary citizens. The manipulation of fuel prices is a prime example of the government’s ruthless and dishonest approach to governance. The massive increase in the price of gas in 2022 forced many citizens to choose between feeding their children and getting to work.
The debate over taxation is a fundamental one, and in small island developing states like St. Lucia, it takes on added significance. While proponents of higher taxes argue for increased funding for essential services, the reality is often that these funds end up in the hands of inefficient and incompetent managers, leading to waste, corruption, and a lack of tangible benefits for the people. Conversely, lower taxes put more money directly into the pockets of citizens, empowering them to invest in their own businesses, educate their children, and contribute to a more vibrant and dynamic economy.
The SLP government embodies the former approach: a relentless tax-and-spend philosophy that gives greater importance to government control over individual empowerment. The history of SLP administrations shows a pattern of increasing taxes, often with devastating consequences for businesses and ordinary citizens. The Environmental Levy, introduced by the SLP in 1999, targeted imported goods, including vehicles. In 2002, the Kenny Anthony administration increased the Environmental Levy on used vehicles by $1,000 to $12,000, depending on the vehicle’s age. This punitive measure priced many St. Lucians out of the used car market, making it almost impossible for them to afford reliable transportation.
The introduction of VAT at 15% sent shockwaves through the St. Lucian economy, dragging it to an almost standstill. Small businesses were particularly hard hit, with many forced to close their doors. The price of essential goods and services skyrocketed, placing an unbearable burden on ordinary citizens. Food prices soared, making it difficult for families to place nutritious meals on their tables. The cost of manufacturing increased, stifling local production. Transportation costs rose, impacting commuters and businesses alike.
Since assuming office in July 2021, the Philip J. Pierre SLP government has introduced a range of taxes, including the 2.5% Health and Citizen Security Levy, imposed on August 2, 2023. This levy was applied to imported goods and certain services, deceivingly foisted upon every citizen, regardless of their financial standing.
The Fuel Pass-Through Mechanism, introduced on September 28, 2009, was intended to adjust retail fuel prices based on changes in the international price of crude oil. However, the current government abandoned fairness and transparency, opting for a system of opaque pricing that benefits only themselves. The numbers speak for themselves: while international oil prices plummeted, St. Lucians continued to pay exorbitant prices at the pump. Despite a 36.36% reduction in the price of Brent crude, the government reduced the price at the pump by only 8.08% from $17.95 in June 2022 to $16.50 and to $16.00 on May 1st.
This egregious manipulation of fuel prices is just one example of the government’s broader mismanagement of the economy. The SLP administration’s policies have disproportionately harmed the poor and middle class, while showing a disturbing neglect of international governance standards. A recent audit reveals that much of the tax revenue is misappropriated for dubious projects, leaving essential services like healthcare and security in shambles.
The people of St. Lucia are not fooled by the government’s attempts to buy their votes with empty promises and temporary handouts. They know that a government that is willing to exploit its citizens through unfair taxation and manipulate the system for its own gain is a government that does not have their best interests at heart. As the situation continues to deteriorate, it is imperative that the people of St. Lucia demand transparency and accountability from their government. They must insist on a fair and equitable tax system, one that does not disproportionately burden the poor and middle class.
The SLP government would do well to heed the words of Alexis Tocqueville, who once said, “the most perilous moment for a bad government is when it seeks to mend its ways. Only consummate statecraft can enable a king to save his throne when, after a long spell of oppression, he sets out to improve the lot of his subjects.” The current government of St. Lucia must take a long, hard look at its policies and actions, and work towards building a more just and equitable society for all its citizens. This requires a fundamental shift in approach, one that prioritizes individual empowerment and economic freedom over government control and manipulation for selfish political ends. Only then can St. Lucia truly prosper and fulfill its potential as a vibrant and dynamic nation.
By James Stanislaus