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Golding's comprehensive budget speech
Ken Chaplin
Tuesday, April 29, 2008
Some people have criticised Prime Minister Bruce Golding's presentation in the 2008-2009 budget debate as lacking in vision. While I admire visionaries like former prime minister Michael Manley during his leadership of the government, it was pragmatists and realists like prime ministers Alexander Bustamante, Edward Seaga and Hugh Shearer who moved the country forward in practical economic terms. Premier Norman Manley was unique. He was both a realist and visionary and his contribution to Jamaica's earlier economic progress was significant.
Golding spoke in practical terms. Yet his speech was not entirely devoid of vision. In his opening he said, "The debate was taking place at a time when Jamaica finds itself in a harsh global environment in which we are extremely vulnerable and for which we are unprepared. We have a development deficit that must be made up, poverty that must be a eradicated, a social order that must be transformed, opportunities that must be created and hopes that must be fulfilled, but we must not be overwhelmed by these challenges, for we are a people whose history is defined by struggle against the odds. Nanny of the Maroons, Sam Sharpe, Paul Bogle and George William Gordon."
Then Golding jumped into practical matters starting out with the world food shortage and the sharp increases in gasoline which have led to increased prices in Jamaica and many other countries. Measures taken by the government to ease the blow have not been sufficiently explained by the government communication apparatus. Therefore, the time taken by Golding to explain the matter was necessary. Still, it is not too late to mount a concerted communication programme as the problem is going to remain with us for a long time. There is rice shortage in many countries, including the United States. Government should urgently consider growing rice in Jamaica. We once grew a substantial amount of rice.
It is necessary for Opposition Leader Portia Simpson Miller to be adequately briefed so that what she says will see the light of day. Apparently, she was not properly briefed on at least two matters she dealt with in her contribution to the debate, and Golding had to fill in the gaps. The first matter had to do with the dismissal of the Public Service Commission by the governor general on the recommendation of the prime minister. Simpson Miller, according to Golding, made trenchant statements about the replacement of the commission. The whole question centred on the need for members of the commission to resign when there was a change of government. Golding read two letters to a former governor general by members of previous Public Service Commissions which showed that the commissions resigned after there was a change of government.
The other matter concerns the National Housing Trust. Mrs Simpson Miller said she had seen statements that there may be a plan to increase the interest rates charged by the Trust.
But that was not the full story. Golding produced documents from the Trust that the agency was having serious financial problems and is expected to accumulate a deficit of $14.7 billion at the end of 2012-2013.
One of the reasons for the precarious position of the NHT, Golding said, was that over the past 15 years the former government did not pay $10 billion in contribution to the Trust and another $10 billion in interest. He said the NHT Board had approved proposals designed to ensure the viability of the Trust and ensure that it continues to provide affordable housing solutions to its contributors. There will be a number of cost-sharing measures to improve the finances of the trust.
The prime minister's review of the economy and some other critical areas was the most comprehensive I have heard in 50 years by any leader in the public or private sector. Among matters discussed were the energy crisis, energy conservation, energy diversification, improvement of the divestment climate, tax reform and compliance, job creation, major divestment projects, casino gambling, human rights, sugar privatisation, cost overrun of US41 million on the Sandals Whitehouse project, forward sale of alumina, Jamaica Urban Transit Company, divestment of assets, Finsac, transformation of education, modernising the health services, sustaining the fight against crime, justice reform, constitutional changes, parliamentary reform, corruption, local government reform and Air Jamaica.
Because of limited space, it is not possible to comment on what Golding said in all these areas, but positive developments are coming. Take Air Jamaica and tax reform, for instance. He said Air Jamaica had accumulated losses of over US$1 billion. Last year the losses amounted to US$170 million, exacerbated by rising fuel costs. Golding pointed out that we cannot continue to pile up the losses on the backs of taxpayers with no end in sight. Therefore, the airline is to be divested. This column has insisted that the airline should be sold. About two years ago, when I discussed this course of action, Vincent Morrison, president of the National Workers Union, said that Air Jamaica should be given one more chance to become viable. Well, it is now time for the airline to close the book as far as government is concerned. As far as tax reform and compliance are concerned, the last comprehensive reform was in 1986, and as Golding said, another reform is due. One of the weaknesses in the system which must be corrected is that many small businesses do not give receipts for purchases, and others give receipts without any name, address or number. This serves no useful purpose for monitoring by the tax administration.
Davies, Shaw, Finsac
Former Finance Minister Dr Omar Davies was correct when he suggested that current Finance Minister Audley Shaw excuse himself for involvement in the proposed commission of inquiry into the Finsac debacle of the 1990s because of conflict of interest. He said that Shaw was one of four of the current Cabinet members who were indebted to Finsac. Davies was disingenuous in not naming how many members of the Cabinet of the past PNP administration had a conflict of interest. Sometime ago when this column asked for the information, I was told by Dr Davies and Patrick Hylton, then managing director of Finsac, that the Banking Laws forbade this. Now that Dr Davies has breached the law, it is open season for Shaw to publish the information.
Ken Chaplin
Tuesday, April 29, 2008
Some people have criticised Prime Minister Bruce Golding's presentation in the 2008-2009 budget debate as lacking in vision. While I admire visionaries like former prime minister Michael Manley during his leadership of the government, it was pragmatists and realists like prime ministers Alexander Bustamante, Edward Seaga and Hugh Shearer who moved the country forward in practical economic terms. Premier Norman Manley was unique. He was both a realist and visionary and his contribution to Jamaica's earlier economic progress was significant.
Golding spoke in practical terms. Yet his speech was not entirely devoid of vision. In his opening he said, "The debate was taking place at a time when Jamaica finds itself in a harsh global environment in which we are extremely vulnerable and for which we are unprepared. We have a development deficit that must be made up, poverty that must be a eradicated, a social order that must be transformed, opportunities that must be created and hopes that must be fulfilled, but we must not be overwhelmed by these challenges, for we are a people whose history is defined by struggle against the odds. Nanny of the Maroons, Sam Sharpe, Paul Bogle and George William Gordon."
Then Golding jumped into practical matters starting out with the world food shortage and the sharp increases in gasoline which have led to increased prices in Jamaica and many other countries. Measures taken by the government to ease the blow have not been sufficiently explained by the government communication apparatus. Therefore, the time taken by Golding to explain the matter was necessary. Still, it is not too late to mount a concerted communication programme as the problem is going to remain with us for a long time. There is rice shortage in many countries, including the United States. Government should urgently consider growing rice in Jamaica. We once grew a substantial amount of rice.
It is necessary for Opposition Leader Portia Simpson Miller to be adequately briefed so that what she says will see the light of day. Apparently, she was not properly briefed on at least two matters she dealt with in her contribution to the debate, and Golding had to fill in the gaps. The first matter had to do with the dismissal of the Public Service Commission by the governor general on the recommendation of the prime minister. Simpson Miller, according to Golding, made trenchant statements about the replacement of the commission. The whole question centred on the need for members of the commission to resign when there was a change of government. Golding read two letters to a former governor general by members of previous Public Service Commissions which showed that the commissions resigned after there was a change of government.
The other matter concerns the National Housing Trust. Mrs Simpson Miller said she had seen statements that there may be a plan to increase the interest rates charged by the Trust.
But that was not the full story. Golding produced documents from the Trust that the agency was having serious financial problems and is expected to accumulate a deficit of $14.7 billion at the end of 2012-2013.
One of the reasons for the precarious position of the NHT, Golding said, was that over the past 15 years the former government did not pay $10 billion in contribution to the Trust and another $10 billion in interest. He said the NHT Board had approved proposals designed to ensure the viability of the Trust and ensure that it continues to provide affordable housing solutions to its contributors. There will be a number of cost-sharing measures to improve the finances of the trust.
The prime minister's review of the economy and some other critical areas was the most comprehensive I have heard in 50 years by any leader in the public or private sector. Among matters discussed were the energy crisis, energy conservation, energy diversification, improvement of the divestment climate, tax reform and compliance, job creation, major divestment projects, casino gambling, human rights, sugar privatisation, cost overrun of US41 million on the Sandals Whitehouse project, forward sale of alumina, Jamaica Urban Transit Company, divestment of assets, Finsac, transformation of education, modernising the health services, sustaining the fight against crime, justice reform, constitutional changes, parliamentary reform, corruption, local government reform and Air Jamaica.
Because of limited space, it is not possible to comment on what Golding said in all these areas, but positive developments are coming. Take Air Jamaica and tax reform, for instance. He said Air Jamaica had accumulated losses of over US$1 billion. Last year the losses amounted to US$170 million, exacerbated by rising fuel costs. Golding pointed out that we cannot continue to pile up the losses on the backs of taxpayers with no end in sight. Therefore, the airline is to be divested. This column has insisted that the airline should be sold. About two years ago, when I discussed this course of action, Vincent Morrison, president of the National Workers Union, said that Air Jamaica should be given one more chance to become viable. Well, it is now time for the airline to close the book as far as government is concerned. As far as tax reform and compliance are concerned, the last comprehensive reform was in 1986, and as Golding said, another reform is due. One of the weaknesses in the system which must be corrected is that many small businesses do not give receipts for purchases, and others give receipts without any name, address or number. This serves no useful purpose for monitoring by the tax administration.
Davies, Shaw, Finsac
Former Finance Minister Dr Omar Davies was correct when he suggested that current Finance Minister Audley Shaw excuse himself for involvement in the proposed commission of inquiry into the Finsac debacle of the 1990s because of conflict of interest. He said that Shaw was one of four of the current Cabinet members who were indebted to Finsac. Davies was disingenuous in not naming how many members of the Cabinet of the past PNP administration had a conflict of interest. Sometime ago when this column asked for the information, I was told by Dr Davies and Patrick Hylton, then managing director of Finsac, that the Banking Laws forbade this. Now that Dr Davies has breached the law, it is open season for Shaw to publish the information.