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EDITORIAL - Inclusive approach to crafting Budget urgently needed

Published:Thursday | March 18, 2010 | 12:00 AM

In a week's time, Audley Shaw, the finance minister, will table the Government's annual Budget, which he and his boss, Prime Minister Bruce Golding, say will set the tone for the country's economic recovery.

This newspaper hopes that they are right. We are, however, concerned that the process being employed by the administration runs the risk of weakening the consensus that has to be sustained if Jamaicans are to imbibe willingly in the bitter get-well medicine.

Our major complaint is that Mr Shaw has not adopted the openness and transparency for which we had hoped and which the administration had led us to believe would happen.

A dozen years ago when Jamaicans rioted over former finance Minister Omar Davies' imposition of higher taxes on petrol, the government of the day declared its acceptance of a far more inclusive approach to budgeting and tax-policy formation.

Market instability

Broadly, it was agreed that there would be pre-Budget presentations by the minister and/or finance ministry technocrats on the parameters within which the budget would be shaped. These briefings would produce little, except perhaps for specific tax measures whose premature announcement might lead to market instability.

That, at least, was the implied intent. Unfortunately, it has never quite worked that way, except for the fact that the Budget's raw numbers now come earlier and parliamentarians get more time for discussion of the line items. Except for the cut and thrust of the actual debate, with its usual partisan divide, there is not an opportunity for critical and independent players to discuss the philosophical frame within which the Budget numbers are crafted before they become set in stone.

We had hoped that things would change this year. The circumstances demand it. And, indeed, there were hints, if not outright promises, of a shift.

For instance, the administration promised fiscal accountability legislation, for which it has taken the first step. And in February, when Prime Minister Golding asked Jamaicans to reschedule over $700 billion in government debt by taking lower rates and longer repayment periods, he promised that the Government would take people into its confidence about the state of the economy and the route to recovery.

Performance tests

That is a promise which, in this environment, the government would do well to fulfil. The economy, after the retreat in 2008, contracted an estimated 3.5 per cent this fiscal year. The government is borrowing US$1.2 billion from the International Monetary Fund for which it has, over the next two years, to undergo stringent performance tests.

The first of these tests will be at the end of this month, and already the fiscal data suggest that it will be difficult for the targets to be met. For instance, at the end of January, the deficit, at $105 billion, was $25 billion ahead of the target and revenues were 10 per cent below budgeted levels. And with an additional $31 billion added to the Budget in the supplementary estimates presented this week, it seems likely that the fiscal deficit will overshoot the revised projection of 12.7 per cent.

All of this is happening in the face of restiveness among nurses, teachers and other public-sector employees who are owed money, which the Government can, at this time, ill-afford to pay. In this scenario, a broad national engagement on the budget makes sense.

The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner. To respond to a Gleaner editorial, email us: or fax: 922-6223. Responses should be no longer than 400 words. Not all responses will be published.