Thu | Aug 17, 2017

Audley will know what to do

Published:Sunday | April 3, 2016 | 4:00 AM

Does the thinking public need any more proof that the $18,000 vote-buying scheme was hatched to manipulate the gullible, then, without due diligence, rushed to the consumer?

The country was assured, repeatedly, that the plan had been carefully thought through and that the numbers had been studied by "the team". Voices of caution were dismissed as bad-mind Cassandras, partisan nattering nabobs of negativity.

Now the inevitable is unfolding. And although we can anticipate Herculean efforts at evasion, cynical attempts to blame others for bad policy, and an eventual fudge so that it can be claimed as a "commitment fulfilled", the reality is that the fantasy economics can't and won't last. To do what they promised to do, the administration will blow the IMF targets, raise taxes, and/or slash important spending.

Careful observers will have long since noted that 'the' plan was, in fact, three or four different plans that kept "evolving" every time Holness or Shaw spoke. It began with a determination that the minimum wage should be doubled. That got a stony reception, so it seems to have been quietly abandoned, or put one side. That promise is hard to hear about nowadays. Maybe they're hoping people forget.

The second iteration was a plan to simply raise the income tax threshold to $1.5 million. That plan premiered with great fanfare, but when confronted with its exorbitant cost, more than $30 billion, a more nuanced, but still deeply flawed, plan (Plan 3) was hatched. That is the current model, wherein earners up to $1.5 million annually are tax-exempt, those between $1.5m and $5m get $592,800 exempt, and those over $5 million suffer the full force of the tax guillotine.

There are problems with Plan 3. Those earning between $1.5 million and $1.8 million are better off earning less. For the first time in history, workers will line up to demand a pay decrease so that they can take home more money. Plus, imagine an experienced teacher getting paid less than a newly minted one?

But Plan 3 met with electoral success, so naturally, having created Frankenstein, the temptation is to fix the beast instead of killing it entirely, proving once again that bad ideas are more easily created than abandoned. Hence, creativity and fixes are being applied to this man-made problem, with the added complication that fixes are likely to be costly and confusing.

At least partially in response to the inequities caused by it, Mr Shaw has seemed to be fudging towards yet another plan (Plan 4), which would include "tax relief" for those earning between $1.5m and $1.8 million. Or so he has announced.

You would be forgiven for thinking that this is quite enough 'ketchy-shubby' policy for a short period, but now the Jamaica Civil Service Association (JCSA) has proposed yet another plan (Plan 4), it seems, to rescue the Government. In this one Government would simply raise the income tax threshold to $1 million and make it deductible for everyone. It could happen.

 

SERIOUS MATTER

 

That's because last week, the JCSA requested that Government abandon its plan. Now I know this is supposed to be a serious matter, but is there a face that didn't smile at the absurdity? I learned of it in a Gleaner headline that read 'Civil Service Association recommends that Gov't abandon income tax plan'. The headline reminded me, only because of its lexical closeness, of RJR's headline on February 5, 2016 that 'Civil Service Association supports JLP leader's tax proposal'. Clearly, this is another example of careful study and consideration before making grand policy announcements.

Anyway, the JCSA's O'Neil Grant now says: "Some workers are not looking forward to a 3% increase in salary", and that the plan could cause "stagnation in the public sector as workers reject promotions", "could be bad for them in the long run", and "could also impact productivity as workers avoid overtime". But alas, there is so much riding politically on the implementation of Plan 3 that it will have to be accomplished in some form or another.

Initially, April 1, that is, Tom Fool's Day, was set down as a hard deadline. Well, one solemn promise, repeated and reaffirmed, has already been broken. Really, they really should have given the postponement to Damion to announce: "Tricked you!" Now we're told that by April 1 we will have ... wait for it ... an announcement.

Then came the inevitable charge (weren't you waiting?) that "PNP used up funds earmarked to finance $1.5m tax break". I read this with tears of joy.

As chairman of the Public Accounts Committee (PAC) Audley might've done his job before advertising that there was "more than enough to cover the cost of this plan", or pouring "scorn" on doubters, and "earmarking" funds already spent and not yet collected.

At another level, though, let's breathe a sigh of relief. At least he's being responsible enough, now, to admit, in a roundabout and messed-up way, that those like Messrs Matalon and Hyman, who said it couldn't be done as advertised, were, in fact, correct. If, as I suspect, Audley knew this all along, it's the cynicism that impresses me.

News flash! At a PSOJ event, Shaw himself is now talking about a Plan B. Does he mean that morning-after abortion pill that hookers are swallowing like jujubes? Probably not, but it would make more sense. Because good tax policy could NEVER emerge from this carnival of confusion.

So let's be clear: If the Government is forced to accept the JCSA's proposal, or otherwise fails to implement its central campaign promise because it's a complete dud, surely Mr Shaw will do the honourable thing! No? Even after failing to design a workable tax package after "careful study"?

All right! Well, at least it goes without saying that should Mr Shaw fail the next IMF test, he will finally have an unequivocally clear policy direction and will know what to do. I mean, imagine a team manager retired for losing and dodging games, who then gets unretired to lead a team fresh off of 10 straight wins. He can't lose the next crucial game and say it's the former winning manager's fault. What? In our banana-republic politics, he can? Oh boy! Maybe Audley won't know what to do.

- Daniel Thwaites is an attorney-at-law. Email feedback to columns@gleanerjm.com.