Sat | Oct 1, 2016

'Not credible'

Published:Sunday | March 28, 2010 | 12:00 AM
Dwyer
Nicholson
Hopkins
Manning-Henry
McLaughlin
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University students dismiss budget as woefully inadequate

Daraine Luton, Senior Staff Reporter

A group of university students is expressing grave reservations about the Government's Estimates of Expenditure tabled in Parliament last week.

Days before the standing finance committee of Parliament begins its examination of the document, Dane Nicholson, a University of Technology (UTech) student who studies at the school of business, told a Gleaner forum at the school's Papine, St Andrew campus that, on the face of it, the numbers were not credible.

Nicholson reasoned that the Government's $499 billion planned spending would be woefully inadequate to carry out the country's affairs, especially in light of the expectation of massive job cuts this year.

He predicts that not long from now, Finance Minister Audley Shaw will return to the country with a Supplementary Estimates of Expenditure.

"When we are in a recession, you normally increase spending to increase aggregate demand, which will drive an increase in collectable taxation. The Government did the opposite of that. It means that like they did in the last fiscal year, they will have to come with a supplementary estimates and say, 'We could not stand by this one'," Nicholson said during The Gleaner forum on Friday.

Last fiscal year, Shaw tabled a $556 billion package, which the Opposition People's National Party (PNP) then said was not credible.

By September, the Budget ballooned to $562 billion, and then $593 billion by year end.

less resources

Nicholson argued that inflation, which could come out at 13 per cent, will mean the administration will have much less money to spend in the new fiscal year.

"Essentially, Government is going to be running the country with less resources and with the economy contracting, they will have to review the figures," he argued.

Shaw's sculpted budget reflects a proposed spending of $499 billion, down from $593 billion presented in the second Supplementary Estimates for the just-concluded fiscal year.

Government allocated $72.3 billion to education, $39.7 billion to national security, and $33.2 billion to health.

However, the UTech students argued that not only are there misplaced priorities, but also an underfunding of some critical areas.

Dahlia Dwyer, a fourth-year finance major, argues that the Government should have backed up its rhetoric about its support for agriculture by pumping more money into that sector.

"Agriculture could be one of the primary drivers of the economy during these trying times. Agriculture can also spur industrial production, and I do believe that more money should have been allocated to this sector," Dwyer said.

"There are many Jamaicans who are considering it as a viable option, and it should be encouraged," she added.

opportunity for investment

In the Throne Speech delivered on Thursday, Governor General Sir Patrick Allen noted that agriculture production increased by 12 per cent last year.

He said, "With improved extension services, marketing and integration with the manufacturing sector, agriculture offers significant opportunity for investment and further growth."

However, another UTech student, Tayvonne Hopkins, argued that while an increase in output by the agricultural sector was possible under trying conditions, it was foolhardy of the Government to cut capital expenditure in that area.

The Government has indicated its intention to spend $210 million on capital projects in the agricultural sector, down from $400 million last year.

Among the casualties of the cut is the grant to the national irrigation commission for the construction of irrigation facilities.

That grant has moved from $50 million in 2008-2009 to zero this year. Last year, $28 million was spent in this area.

On Friday, Tanesha Williams, a fourth-year finance major at UTech, noted that it was cuts like those in agriculture and education which strengthens the claim that the Budget is not credible.

Karen Manning-Henry, of the Faculty of Education and Liberal Studies, argued that as much as we are required to tighten our belts, we are also required to tighten the Budget based on the requirements of the International Monetary Fund.

"These numbers are definitely not tight; we will soon have to revise them," Manning-Henry argued.

Nyron McLaughlin, a third year Faculty of Science and Sports student, said he did not have much hope for a credible Budget.

"The last time the country was told of a tax package, and then within three weeks there were revisions. In terms of them putting out a Budget now, I don't have enough confidence in this Budget, considering the number of new projects that are on stream," McLaughlin said.

Hopkins, an education and liberal studies student, said he, too, based his opinion on the leadership being provided at the finance ministry.

"Given the question marks on the minister's ability to manage the country's purse and the myriad of supplementary expenditure presented in the last fiscal year, I doubt that this Budget is credible," Hopkins said.

"This is an estimate and I would want to see how the minister will detail how he will finance this Budget. We know that revenue drives expenditure, and I am waiting until April 8 to see how he will acquire funds to finance these estimates," Hopkins said.

daraine.luton@gleanerjm.com