CASTRIES, St Lucia – Delivering comments at the United Workers Party (UWP) press conference, July 7, 2025, Tommy Descartes, UWP spokesperson on finance and the economy, established that “after four years in office, four years marked by rising food and fuel prices that eroded real incomes of the average Saint Lucian, but more importantly, the poor and vulnerable in our country and a government who repeatedly claimed to have had not policy tools in its arsenal to respond to spiraling inflation – [in fact] the constant refrain, however, has been that it is imported inflation and therefore there is little that the government can do.”
Descartes outlined: “ We know now that it is not that the government could not do, but rather it deliberately chose not to do. It is not just imported inflation, but policy inaction and inertia on the part of the government. He continued. “In fact, we remember vividly when asked about inflation, the minister finance, repeatedly scoffed at reports suggesting that they were acting as if the sky was falling – no policy options were offered then, except for excuses.
Last Thursday in parliament, the government belatedly on the advice of its political advisors and after conducting several polls, realised that ordinary Saint Lucians are reeling under the pressures of the high cost of living, and that the handling of the cost-of-living crisis will come under widespread scrutiny and will be a key issue on the ballot ticket in the upcoming general election, have suddenly found the policy creativity and ingenuity to zero-rate some 70 food items.
Descartes said that his response is, and that Saint Lucians response to the government should be – “too little, too late.”
He explained: “If this government took so long to respond to the inflation crisis, one can only imagine how long it would have taken them to respond to the COVID-19 pandemic. Thank God it was the UWP who was in power back then, because an SLP government response would have been that COVID-19 was imported and therefore there is nothing they can do.”
The late and inadequate policy response to the cost-of-living crisis reveals two things about the government.
Firstly, the government is indeed living in a different reality – because they have not had to go to the gas station and face the high prices of gasoline and diesel, nor have they entered the supermarkets to purchase groceries over the past four years, which is the lived reality of average Saint Lucian. They are out of touch and tone-deaf. And it’s you, the taxpayers of this country, who have been subsidising them and shielding them from inflation while you bear the brunt of the high prices.
Secondly, it reveals a government that is clueless, careless and incompetent. A government, who rather than dealing with the bread-and-butter issues that you the Saint Lucian public are confronted with every day, prioritizes taxing you upfront and dishing out handout in the form of vouchers to you the citisens.
Customs service charge and health and security levy
The government generated $1.38 billion in tax revenues in 2024, which is an 11.8 percent increase – the highest in Saint Lucia. The government introduced a 2.5 percent Health and Security Levy, at a time when inflation was ravaging households. A levy that was not needed at this time. The levy generated $18.8 million in 2023 and $38.8 million in 2024, equivalent to $57.6 million that should have been kept in the pockets and bank accounts of ordinary Saint Lucians.
The government generated on average between 2022 and 2024, $107.0 million in Customs Service Charge (imports), compared to an average of $76.4 million between 2017-2021. This is equivalent to an additional $31.4 million in additional revenue generated on average annually, which corresponds to $94.2 million over the three-year period. If we assume that the government took decisive steps to keep import duty at the pre-pandemic average level of $76.0 million and that the Health and Security Levy was not introduced, then Saint Lucians would have paid $151 million in less taxes between 2022 and 2024.
Insurance premiums and gas prices
The government generated on average $12.8 million in insurance premiums between 2022 to 2024, compared to $9.6 million between 2017-2021. This means persons are paying more for motor, health and house insurance. The reality the government has not managed inflation, and Saint Lucia is now substantially more expensive to live and work.
Fuel prices
Data from the Economic and Social Review reveals that the landed cost for gasoline fell from a high of $11.7 in 2022 to $10.30 in 2023 and $9.62 in 2024. Simultaneously, the excise tax rose from $2.12 in 2022 to $3.6 in 2023 to $4.17 in 2.24.
“The government captured all the reduction in landed cost via a higher excise tax,” said Descartes. “ Whereas, I am aware that the government needs to run a country and would need tax revenues to do so. But a government also needs to shield the country from high fuel prices.”
Fuel pricing policy of OECS countries – realise three policy options:
Antigua and Barbuda has low fixed price policy, which means that the Gaston Browne administration prioritises lowering fuel prices even if it impacts the government’s fiscal position.
Grenada, Dominica, St Kitts and Nevis, and St Vincent – have either a full or partial pass-through, which allows fuel prices to adjust to international oil prices.
Saint Lucia has a high fixed price policy – which abandons the fuel pass-through mechanism and is perverted into a revenue maximisation tool. The government collected $80.8 million in excise tax – the highest ever.
“A caring government could have shared the reduction in fuel prices, using either a 50/50, 75/25 sharing mechanism or 100 percent if it so desired,” said Descartes, as summarised in Table 1.
Government policy – VAT removal on construction
“This is yet another failed and ill-conceived policy that foregoes revenue and does not provide the necessary relief to the construction sector,” said Descartes, UWP spokesperson on finance and the economy. “ I urge the government to tell Saint Lucians how much has been foregone to date on this program. The reality is that the persons benefiting from the VAT removal on construction items are seated in the cabinet of Philip J. Pierre.”
Descartes cautioned: “ The notion that this policy is being used to stimulate tourism construction is misleading, because tourism construction attracts tax incentives, and so the construction stimulus package is not designed for the tourism sector.”
“A UWP government” says Descartes, “will design policies to stimulate the construction sector and put monies directly in the hands of Saint Lucians,” and noted that “ the singular most impactful disinflationary policy in recent history was the reduction in VAT from 15 percent to 12.5 percent initiated by the previous UWP administration.”
Food vouchers for vote buying
According to Descartes, the UWP spokesperson on finance and the economy, we found out last Thursday that a major disinflation policy of the St Lucia Labour Party is the handing out of vouchers.
“I have looked throughout the estimates of revenue and expenditure in search of a National Food Voucher Program, but could find none. I want the government to tell me which agency is leading on this programme, and how much is allocated annually and disaggregate it by constituency, please.”
Descartes further submitted: “What are the eligibility criteria for accessing food vouchers in Saint Lucia?”
However, he re-joined, stating: “We all know it is the parliamentary representative who decides who gets food vouchers. This is not a national program, but a political program to secure the votes of the poor and powerless in Saint Lucia. It is time to return dignity to social programming in our country.”
The cost-of-living crisis in St Lucia is the cost of leadership failure
The SLP government is now chastising and threatening retailers to ensure they pass on the reduction to consumers.
Descartes advised: “ What this government should do is sit with stakeholders and ascertain what the prices will be after the intervention and post those prices island-wide to ensure consumers know the prices they should be paying. Instead, the government is burdening consumers to report retailers who are not passing on the reductions. This is a lazy and clueless administration – #make it make sense.”
“ This SLP government has failed on many accounts where inflation is concerned, food and fuel. They introduce taxes when inflation is ravaging the average household, and introduce disinflationary policies when the economy is experiencing deflation – this is a confused government.”
“A clueless government need not occupy nor benefit from the status of public office,” UWP spokesperson on finance and the economy, Descartes, concluded.
