Shaw, Davies urged to provide more
Chairman of the Jamaica Association of Young Professionals, Junior Rose, has chimed in on the Budget debate now being hosted in Jamaica's Parliament.
The presentations of the Finance Minister and the Opposition Spokesman on Finance on the Budget for fiscal year 2010/2011 have been found wanting.
They have both failed to give Jamaicans a sense of hope, reco-very and growth for the economy.
Dr Davies merely responded to Minister Shaw's presentation, while raising a few concerns.
The Jamaican economy is highly susceptible to outside influences reflected in the fallout in bauxite and tourism among other sectors. However, there is no clearly defined path to recovery. The suggestion of improvement in collecting taxes of over $280 billion is cause for concern. There are some assumptions that are not accurate in the finance ministers presentation; one such is that companies and individuals are pocketing the extra tax dollars and that the tax department will be able to collect.
Trying to survive
While in some cases this is so, many companies are only trying to survive (paying staff and other overheads) and as more people are being laid off as a result of a contracted economy, their disposable incomes are shrinking. Many persons are therefore purchasing less, hence less General Consumption Tax.
The focus on multilateral organisations such as the International Monetary Fund is also a concern as the repayment period for the standby loan agreement with them may assist us in the short run, however, it will not benefit us in the medium term when we have a $13 billion retroactive payment for public servants to pay in three years.
Public sector salary negotiations are quite untidy (nurses, teachers and policemen). This has to be addressed and all parties involved should exercise understanding. The $2 billion of the $13 billion owed to public sector workers is not sufficient settlement. The Government should look at issuing bonds as a part of its settlement, with or without interest, depending on the maturity dates of these bonds.
The opposition spokesman merely responded to the presentation of the finance minister, rather than a clearly outlined alternative policy direction.
Concomitantly, the level of productivity and the propensity to spend in the country have to increase as these will improve business, increase employment and increase tax revenue. The revenue centres such as Tourism and Agriculture should be targeted for improvement. There is a need to explore competitive advantage in these areas.
There also needs to be tax incentives/moral suasion to companies not to further layoff workers, rather examine shared hours among workers where appropriate, furthermore companies should be encouraged to employ persons when it improves its bottom line.