Ronald Mason | Making growth lasting legacy
The Government of Jamaica has entered into a new arrangement with the IMF. This is not a balance-of-payments facility, as any funds that would be disbursed would be triggered by unforeseen circumstances such as a natural disaster and any other catastrophic event. In addition, the benchmarks that underpin the most recent facility have been incorporated into this new agreement. It is refreshing to note that this relationship is founded on the intent to correct the macroeconomic indicators.
Let us take a look at some of the measures to be implemented in the new agreement. Property taxes are to have new rates and new bands using 2013 land valuation. This will be completed and submitted to Cabinet by 2016. I would have welcomed companion attention to the collection of property taxes. In the recent past, there has been a fair amount of public encouragement for people to pay on time. This effort has yielded some positive results, but we need to make it abundantly clear that non-payment of property taxes could result in a sanction along the continuum of penalties to the loss of the property.
Yes, one recognises that there are persons in society whose property values have skyrocketed as they have experienced a reduction in earning capacity related to their age and job accessibility. Comprehensive reform must take these factors into account, along with zoning laws. A storehouse of high-value properties grows exponentially every year and the tax collection lags. We will await the policy to be presented later this month.
Financial-sector taxes are to be streamlined and rationalised in financial year 2018-2019. This will include financial turnover taxes of stamp duty and transfer tax. We need clearly defined rules for stamp duty and transfer tax as it relates to real-estate turnover and the resulting capital gains and what it means for construction affordability.
The effect of construction activity in this society is not fully appreciated. Finance, labour, capital appreciation, long-term investment and real-estate development are all intertwined therein. The state of the economy demands that this be addressed.
Another reform area arising from the new IMF arrangement is public-sector transformation. For many decades during the tenure of both governments, the public sector has been utilised as a source of patronage jobs and every change of administration introduces the purging of those who are out of political favour.
While it is understood that economic development is influenced, in large measure, by the efficiency and skill base of the public sector, this has not been the prime thrust to date. The arrangements for employment in the public sector are so loose. That persons who are not appointed to positions but who work for decades without any pension benefits is just one of the many things wrong within the public sector.
It used to be that if you were to become a public servant working at Whitehall in the United Kingdom, you were a respected professional, valued to the nation. Not so in Jamaica. As a country, we now, more than ever, need professionalism, expertise, reduction in duplication and, for want of a better phrase, IT-based joined-up government.
To illustrate this, it is anachronistic, time-deficient and costly to have developed plans sent to 17 different agencies as a routine for their review and approval. That is why all the talk of a 90-day turnaround is pure wishful thinking.
We cannot continue to pay the public sector 10 per cent of GDP and climbing for its abysmal productivity. The IMF and the Government have pretty much set a 2017 timeline for public-sector transformation.
It cannot come soon enough, but we must be reminded that the bulk of the public-sector employees are to be found in health care, education and public safety, none of which sectors, at this point, is distinguishing itself by exemplary service to the country.
The Economic Growth Council, which has set the target for five per cent growth in four years, has done a creditable job in ensuring that some of these reform measures have made their way into structural benchmarks. The fact that these are defined and measurable is significant. I subscribe to the school that says, 'If you can't measure it, you can't manage it.' This is where sloganeering is debased, and where specific managerial steps must be taken to achieve desired results.
For too many years, we have allowed inertia to be the driver of this country's development. Now is the time to set targets, identify strategies for implementation, and hold of persons accountable. Every person who lives here can identify the major problems, but very few are taking concrete steps to solve them.
It is time for us to understand that we have been an independent country for 54 years - no longer 'a yute'. We are grown, and we have obligations to ourselves and future generations.
The party label is of no consequence. The difference in party leadership is inconsequential. The willingness and ability to make positive change is what matters.
Time come to build Jamaica.