Bring the stimulus up to $110b
THE EDITOR, Madam
THE MINISTER of finance announced, with much fanfare, the delivery of a stimulus package of $25 billion to support workers and businesses from the effects of the COVID-19 pandemic.
In the Budget presentation for fiscal year 2020-21, the minister also announced that the rate of general consumption tax (GCT) would fall by 1.5 per cent to 15 per cent. This would take effect in April of this year. The reduction would realise a loss in revenue for the Government of approximately $14 billion.
Maybe I am wrong, but it appears that this reduction in GCT is actually factored into the stimulus package. This means that, in fact, the actual stimulus for offsetting the pandemic effects is $11 billion. I say this as the reduction in GCT is only useful to those who are able to purchase goods and services. If you have no money, you cannot purchase anything. The reduction in GCT means nothing to those people who are in greatest need.
May I suggest that the Government consider the US$3-billion (J$408-billion) foreign exchange reserve that is available. Yes, this reserve is meant to provide a surety to the international community that we can take care of our credit for a number of weeks. However, these are not normal times. Forget the reduction in GCT. If the Government were to add a zero to the current $11 billion stimulus package without the GCT reduction, and expand that to $110 billion, we may be able to avoid social unrest as our people will be able to survive.
Each person holding a voter ID should be eligible to receive $10,000 weekly for the next eight weeks. Assuming that we have 1.6 million voter ID card- bearing persons in Jamaica and 80 per cent of those would look to accept this payment, this means approximately 1.3 million persons would receive the payout each week. This amounts to $104 billion.
I will not dwell on the logistics required for such a payout. When we consider support to small businesses that need to stay open, another $5 billion is required. Support to students would mean another $1 billion, while the health sector will require another $1 billion.
If we leave our citizens to fend for themselves, chances are we will turn on each other to survive. The Government must step up to keep our country operating in some order during this unprecedented catastrophe in modern history. Better to calculate, prepare and implement now rather than to be scampering around in four weeks’ time when the effects of the pandemic become extreme. These are not normal times anywhere on the planet.