Time now for a comprehensive safety net - Golding
People’s National Party (PNP) Spokesperson on Finance Mark Golding is calling for the Government to put in place a comprehensive safety net to protect vulnerable Jamaicans from the severe economic contraction now underway as a result of the Coronavirus crisis.
While supporting the thrust of the various measures announced in the Government’s CARE programme, Golding says it must be acknowledged that they total $10.65 billion, or about 0.5% of GDP.
He argued that other countries have recognised that to protect their economies and societies from lasting damage and improve the prospects of recovery after the health crisis subsides, public resources in amounts which are many multiples of 0.5% of GDP must be expended.
“The Governor of the Bank of Jamaica has initially projected a 3% contraction in GDP. The Inter-American Development Bank’s analysis of the economic shock from the Coronavirus crisis to tourism in Caribbean countries, projects that, depending on the duration of the crisis, the direct and indirect impact of the downturn in Jamaica’s tourism industry alone could result in economic contraction closer to 6% of GDP, and this is without factoring in the layering effects of reduced remittances, falling bauxite/alumina exports and overall reduced domestic spending,” said Golding in a statement today.
“Jamaica has moved rapidly into a completely new paradigm, and the former fiscal targets must be put to one side so that adequate resources are found to tackle this existential crisis head on. The Government must be willing to take a courageous fiscal stance and fund a comprehensive safety net to protect our society from unravelling and our economy from lasting damage, so that Jamaica can emerge from the crisis as well positioned as possible to resume sustainable growth and development,” he said.
“Jamaica’s informal economy, which exists largely among lower income groups, comprises over 40% of the national economy, so the $1 billion allocated for informal business operators is woefully inadequate,” he continued.
The opposition spokesman took issue with the government’s COVID stimulus package.
“The design of the announced CARE programme, with its emphasis on bureaucratic verification of the eligibility of beneficiaries, builds gaps into the safety net, leaving many vulnerable Jamaicans exposed and unprotected. These informal business persons, such as many of the 10,000 bar owners who have been shut down without any prior notice in the interests of public safety, cannot comply with the verification procedures which have been made a hurdle for accessing benefits. Creative and flexible ways of including them must be put in place, as a matter of urgency.”
He is also repeating the PNP’s call for a $50,000 per family grant for PATH beneficiaries, an increase in the CDF welfare allocation to $5 million per month per constituency for the duration of the crisis, to protect needy persons who will not be able to access the other elements of the CARE programme.
Golding is also calling for:
· A moratorium on student loan payments to the Student Loan Bureau for the duration of the crisis as has already been announced for NHT borrowers;
· Measures to support Jamaica’s small farmers, who are badly impacted by the demise of the tourism industry and should be facilitated to feed the society and reduce the country’s food import bill; and
· A special upfront grant of $15,000 for NIS pensioners, to supplement their normal pension benefit and assist them to survive this crisis.
Overall, the opposition spokesperson is calling for a substantially larger fiscal programme to be put in place to fund a comprehensive programme, which must include at least an additional $5 billion of upfront support for the informal sector.
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