KINGSTON, Jamaica:
FINANCE AND Planning Minister Dr. Omar Davies has said there would be no large-scale cutbacks in public sector employment and services, nor would there be any massive increase in taxes. These, he said, would be contrary to objectives arising out of recent meetings between the Government and union leaders.
"Our joint objective is two-fold. Firstly, not to have these dramatic cuts and redundancies, and secondly, to curtail the rate of growth of all wages and salaries," the Minister told JIS News in an interview. The Minister said he was pleased at how the discussions were going with the unions, in the effort to reduce the budget deficit, and he hoped to reach a concrete agreement leading to a social partnership, a goal, which he said, has been "somewhat illusive."
Dr. Davies pointed out that there were two ways in terms of trying to bridge a deficit. "You can try to continue spending at your previous pace and then seek to get revenues to grow to match that, or you can look at your major areas of expenditure and reduce that rate of growth. The talks with the trade unions are aimed at curtailing the rate of growth in terms of wages and salaries, and similarly, we are looking at the interest cost, because interest cost and wages are the two major components of the expenditure," he said.
PROPERTY TAXES.
The Minister pointed out that one area where there would be increases was property taxes. "Last year the Government decided to freeze property taxes in response to protests by certain sectors of the society. I think the Leader of the Opposition himself had pointed out that the problem was that we had waited too long in between. He made the obvious suggestion, and I think it is worthwhile, that what we should be seeking to do is to move property tax in line annually and that you never have these huge jumps. The rationale is straightforward, because the cost of providing the services which are supposed to be paid for by property taxes, will be increasing each year," he said.
The Minister noted that currently, property taxes did not cover more than about 50 per cent of the associated services, such as public cleansing.
