Burke announced a reduction in Value Added Tax (VAT) and a five per cent salary reduction for government legislators as the Tillman Thomas administration seeks to revive a struggling economy.
But in his two and a half hour response, Mitchell, whose New National party (NNP) was removed from office in 2008, brushed aside the planned salary cut as well as a reduction on overseas travel by state officials as a scheme to hoodwinked voters.
The next general election in Grenada is constitutionally due in just over a year.
“Why are they cutting ministers salaries at this time? The minister of finance tells us three and a half years we were in serious economic trouble and now the recession is over… but why are you cutting minister’s salary now,” Mitchell asked.
“It should be cut then and give them back now because things are nice. If I was a minister I was not accepting that now. Then it should have been done”.
In his delayed estimates of revenue and expenditure Burke said that a five percent cut in Minister Salaries will take effect from April and that the budget for overseas travel by Government officials will be slashed in half.
Mitchell has consistently criticised the Tillman Thomas administration over its spending on overseas travel, adding that the announcement to cut back was a political gimmick.
“That is electioneering to hoodwink the people that you are making sacrifices. It is a political gimmick, this announced cut in the budget for travel by government officials at this time.
“We were asking the government to stop this and telling them it was going to be difficult. They never listened to us. Pre-election time they announced big cut 50 per cent. I am not sure it’s going to happen.”
The budget which was delayed by three months also outlines plans to amending the VAT to assist investors purchasing goods and materials, extension of a 7.5 per cent tax reduction on construction items as well as an extension of a ten percent rebate to manufacturers on vat exclusive sales.
Mitchell said he was strongly challenging the Burke’s claim that the recession is over and that the local economy is recovering.
“The opposition challenges this statement vigorously. Everybody except the minister knows otherwise. The fiscal situation is neither stabilized nor are we on the path of fiscal consolidation.
“This economy is moving further and further away from fiscal sustainability because of the policy choice that the finance minister has made,” he added.
The government said that the local economy had grown by one per cent and that it is proof that the local economy is expanding.
While the Ministry of Finance estimate unemployment to be around 30 per cent, the opposition said the real figure is closer to 40 per cent.
“How can there be growth when there is less business, less employment, less investment and less economic activity in general,” Mitchell questioned.
“Speak to the vendors, the tax drivers, shop keepers, manufacturers all the stakeholders … and they will say I do not know where the minister gets the impression that the recession was over.”
The Opposition Leader also blamed the loss of two international airlines – Condor from Germany and Monarch from the United Kingdom – on the “government’s inability to manage its financial commitments”.
Mitchell’s comments were in response to a reduction in the money allocated for airlift which has been reduced by EC$1.2 million (US$444,400) this year.
“If airlift is the life blood of our tourism industry then why it is this government is failing in what it needs to do to ensure that airlines continue to service our destination. The question is which one is next? Are we to lose further flights to Grenada?”
Last year, a number of airlines including British Airways and Virgin Atlantic threatened to pull out of Grenada over Government’s failure to make timely payments.
The debate on the budget is continuing.