BASSETERRE, St. Kitts - HON. SHAWN RICHARDS, Parliamentary Representative for Constituency Five said that there is no doubt that the cost of living is high but with many persons working for minimum wage, one has to wonder how they are surviving.
Richards, in an interview with SKNVibes yesterday (August 15), said that since the economic downfall and the implementation of Value Added Tax (VAT), the cost of living has skyrocketed and the persons who are really 'feeling the heat' are the ones who do not work for a large amount of money - the minimum wage workers.
"There's is no question about the fact that the cost of living in St. Kitts and Nevis is rather high. This has been caused by several factors. As we are aware in 2010 the government introduced a Value Added Tax of 17 percent. This had impacted the cost of living in that persons are now required to pay 17 percent on just about all items that they purchase," he said.
He also said that this circumstance is compounded by the fact that businesses also pay VAT and that no business is going to absorb that cost and so it is passed along to consumers.
"Prior to the introduction of VAT a number of food items, such as some meats, were either exempted from customs duty or extracted a customs duty of just about five percent but what has happened since the introduction of VAT is that these very same items now attract a VAT of 17 percent and as a result the cost of these items have increased to the poor people in particular," he explained.
Richards said that he recently walked through a supermarket and took note of the prices of eleven items that persons use on a regular basis and was surprised at the total when calculated.
"I went to the supermarket recently and checked the prices for eleven items and those items came to $131.93. If you take someone who is living on minimum wage of $320 per week, even without taking out Social Security, it means that that person would be left with just about $100 from that week's pay check. One has to wonder how these persons actually survive," he said.
The items he noted were:
Tang - $12.89
Chicken Wings (1.87lbs) - $10.29
Kraft Dinner - $2.67
Carnation Milk - $2.60
Cornflakes - $13.99
Cooking Oil - $15.87
Tin Beef - $15.98
Rice (3lbs) - $8.99
Red Peas - (2lbs) - $6.22
Soap Powder - $8.93
1 pk pampers - $33.50
TOTAL - $131.93
The Parliamentary Representative said that the food items were not the only issue minimum wage owners had to deal with, noting that the high cost of electricity, mortgage, bus fare, and even doctor fees are also issues they have to face.
He went on to say that apart from the price of food items, if that person has to buy a tank of gas or if that person has children and has to take those children to the doctor, pay bus fare, if you working at the Industrial Site and let's say you live in the Sandy Point area, you have to pay $35 per week –then life becomes unaffordable.
Richards said that the government offers minimum wage workers "affordable houses" which attract a payment of some $800 per month which is an average $200 per week "so again even if you look at just the price of the house for somebody who is living on minimum wage, you have to wonder how that person is actually surviving".
He went on to state that the high cost of electricity is another issue which Richards said has skyrocketed to the extent that a number of persons have had their electricity disconnected.
"The government came up with a programme whereby persons who are in arrears can take up to three years to pay off these arrears so electricity has become so expensive, it is like a hire purchase account in order for one to pay off arrears," Richards said.
Richards said that the high cost of living also comes at a time when the economy is in a recession and so, persons are not getting increases in their salaries; in fact, persons have been laid off or have had their hours cut back while some are without jobs.
He went on to say that, apart from minimum wage workers, those who are affected most are the elderly persons, women and children.
"I say those particular three classes of persons because women tend to be the head of the households in St. Kitts and Nevis and so with the state of the economy, those are the ones primarily affected in terms of the layoffs, the lack of jobs and not being able to get any increase in salaries but yet they have the increase cost of living to face," he said.
He explained that most women working for minimum wage have children and so they [children] are also affected.
He further explained that another issue that affects mothers is lack of child support by fathers. Because of the high cost of living coupled with the economic downturn, the support is not forthcoming as frequently; it is not as much as it ought to be or it is not forthcoming at all "so again you have the mothers and the children being affected from that".
Richards said that the elderly are affected in a major way because they are living on fixed incomes. He explained that they also have to deal with medical bills, the increase in food prices as well as medication which does not leave them with money to spare and "because of the fact that they are retired, they too are very much impacted".
"We have also heard that there is the possibility of an increase in the price of cooking gas and I have been privy to a memo from a gentleman who previously worked at the Electricity Department. In that memo he indicated that the Electricity Department is contemplating a further increase in the tariffs that one pays for electricity so even though the fee is already very high, one could very well be seeing further increases in the price of electricity," Richards claimed.
The Parliamentary Representative gave a number of suggestions which he said the government can take into consideration when tackling the high cost of living.
These suggestions include decreasing VAT, especially where food items are concerned and decreasing electricity rates among other things.
"They may want to take a second look at the electricity rates because the gentleman also pointed out in the memo that one of the reasons why the Department would be experiencing a loss is due to the fact that the government itself which is one of the largest consumers of electricity does not pay for the consumption of electricity," he suggested.
Richards also made claims of a hotel not making its tax payments.
"Additionally you have a hotel here in St. Kitts which we have been told collects the restaurant tax and it is not passed over to government, that needs to be reviewed. The government in general needs to look at its operations to see where wastage can be cut.
"Also, the businesses in St. Kitts and Nevis need to be offered incentives to expand and to make further investments so that rather than being in a position of sending home persons, they would be looking at employing more persons," Richards suggested.
Richards said that something needs to be done to combat the high cost of living, even with the understandable economic downfall, because the poor people are the ones that are feeling the brunt of this.
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