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Two weeks ago, we tabled in Parliament the Budget for the new fiscal year. Members of Parliament spent three days last week going through the Budget, page by page, line by line.
As I had explained to you in a broadcast on April 5th, we had to cut expenditure in several areas. We are going through tough times and we are now feeling the full effects of the global crisis on top of the many other problems we already had.
For many years, we have been borrowing and spending, borrowing more in order to keep spending, piling up more and more debt on which we have to pay interest and which we have to pay back.
It's like an addiction: the more we borrow, the more we have to find to service what we have borrowed, so we have to keep on borrowing. This year, we will have to pay $309 billion to service debt alone!
We have reached the stage where all the revenue we collect is still not enough to service that debt. So, before we can pay one civil servant, one teacher, one policeman or one nurse, before we can put one bottle of medicine in our hospitals, before we can provide one school lunch for a needy student, we have to borrow more money.
We cannot go on like this! We have to change course! The global crisis has only made matters worse because, with the collapse of the capital markets, it is even harder to get money to borrow.
Even though we have cut expenditure and reduced the size of the budget in real terms, even though we have had to forego the wage increases that were due to public sector workers this year, there is still a gap in the budget that must be closed.
We can't cut the budget anymore to close that gap. We can't cut expenditure on the police force at a time when we are fighting this monster of crime and violence. We can't cut what we are spending on our schools when the future of our children and, indeed, the country depends on improving the quality of their education. We can't cut expenditure on our health services when there are so many persons who can't afford to go to private doctors or private hospitals.
We cannot borrow more money to close the gap in the Budget. That would only be digging ourselves into a deeper hole, forcing us to find more money to service that additional debt. We can't stop borrowing completely and suddenly. We will have to reduce our borrowing gradually over time. But make no mistake: we are going to have to start cutting our suit to fit the cloth; we are going to have to start paying our way to prosperity instead of borrowing our way into deeper misery.
We are going to have to find our own money to close the budget gap. We will have to raise more revenue and, tomorrow, the Minister of Finance, in opening the Budget Debate, will outline the tax package that is required to close that gap.
In formulating the tax package, we have sought to spread the burden as wide as possible so that it doesn't fall too heavily on any one set of people. We have had to devise methods to get those who have been getting away to pay their fair share. But we have had to take into account the low-wage worker, especially the PAYE worker, who has been bearing more than his fair share. And we have had to look out for the very poor, the pensioners and the vulnerable who need to be protected.
Increasing taxes is never easy or pleasant. Every government likes to be able to announce that taxes are being reduced. Some countries have, in fact, reduced taxes as a means of stimulating the economy. We would love to be able to do that, too. But, then, they don't have a debt burden that gobbles up all of their revenue. They have accumulated fiscal surpluses that allow them to reduce taxes. Ours is a different story. We have lived with fiscal deficits for years and they only pile up more debt that leads to more deficits. We just cannot go on like this!
As one would expect, there has been speculation about the likelihood of tax increases and rumours about planned disruption. What purpose would that serve? Would it close the budget gap? No! Would it force us to restructure the budget by reducing the grants we give to our basic schools, or the provision of medical supplies to our hospitals, or by laying off thousands of public sector workers? Absolutely not!
As I have said before, the country is going through tough times - tough times for you and tough times for the government. All of us have to help the country through this crisis so that we can position ourselves for recovery after it has passed.
Let us not sacrifice the interests of the country on the altar of expediency of whatever kind or motivation. Let's not hand the country over to lawlessness and anarchy.
The Security Forces are on alert and are prepared to respond to any situation where public order is disturbed. But I appeal to all Jamaicans: Let that not become necessary. Let good sense prevail. Let us confront our challenges no matter how difficult they may be.
We did not cause the global crisis but we are suffering the consequences and we must ensure that we endure. We have come through tough times before. We will come through these tough times as well and we will come through them better and safer if we do so together.
God is good and I know that God will continue to bless Jamaica and its people.
http://www.jis.gov.jm/PMspeeches/htm...L_22__2009.asp
As I had explained to you in a broadcast on April 5th, we had to cut expenditure in several areas. We are going through tough times and we are now feeling the full effects of the global crisis on top of the many other problems we already had.
For many years, we have been borrowing and spending, borrowing more in order to keep spending, piling up more and more debt on which we have to pay interest and which we have to pay back.
It's like an addiction: the more we borrow, the more we have to find to service what we have borrowed, so we have to keep on borrowing. This year, we will have to pay $309 billion to service debt alone!
We have reached the stage where all the revenue we collect is still not enough to service that debt. So, before we can pay one civil servant, one teacher, one policeman or one nurse, before we can put one bottle of medicine in our hospitals, before we can provide one school lunch for a needy student, we have to borrow more money.
We cannot go on like this! We have to change course! The global crisis has only made matters worse because, with the collapse of the capital markets, it is even harder to get money to borrow.
Even though we have cut expenditure and reduced the size of the budget in real terms, even though we have had to forego the wage increases that were due to public sector workers this year, there is still a gap in the budget that must be closed.
We can't cut the budget anymore to close that gap. We can't cut expenditure on the police force at a time when we are fighting this monster of crime and violence. We can't cut what we are spending on our schools when the future of our children and, indeed, the country depends on improving the quality of their education. We can't cut expenditure on our health services when there are so many persons who can't afford to go to private doctors or private hospitals.
We cannot borrow more money to close the gap in the Budget. That would only be digging ourselves into a deeper hole, forcing us to find more money to service that additional debt. We can't stop borrowing completely and suddenly. We will have to reduce our borrowing gradually over time. But make no mistake: we are going to have to start cutting our suit to fit the cloth; we are going to have to start paying our way to prosperity instead of borrowing our way into deeper misery.
We are going to have to find our own money to close the budget gap. We will have to raise more revenue and, tomorrow, the Minister of Finance, in opening the Budget Debate, will outline the tax package that is required to close that gap.
In formulating the tax package, we have sought to spread the burden as wide as possible so that it doesn't fall too heavily on any one set of people. We have had to devise methods to get those who have been getting away to pay their fair share. But we have had to take into account the low-wage worker, especially the PAYE worker, who has been bearing more than his fair share. And we have had to look out for the very poor, the pensioners and the vulnerable who need to be protected.
Increasing taxes is never easy or pleasant. Every government likes to be able to announce that taxes are being reduced. Some countries have, in fact, reduced taxes as a means of stimulating the economy. We would love to be able to do that, too. But, then, they don't have a debt burden that gobbles up all of their revenue. They have accumulated fiscal surpluses that allow them to reduce taxes. Ours is a different story. We have lived with fiscal deficits for years and they only pile up more debt that leads to more deficits. We just cannot go on like this!
As one would expect, there has been speculation about the likelihood of tax increases and rumours about planned disruption. What purpose would that serve? Would it close the budget gap? No! Would it force us to restructure the budget by reducing the grants we give to our basic schools, or the provision of medical supplies to our hospitals, or by laying off thousands of public sector workers? Absolutely not!
As I have said before, the country is going through tough times - tough times for you and tough times for the government. All of us have to help the country through this crisis so that we can position ourselves for recovery after it has passed.
Let us not sacrifice the interests of the country on the altar of expediency of whatever kind or motivation. Let's not hand the country over to lawlessness and anarchy.
The Security Forces are on alert and are prepared to respond to any situation where public order is disturbed. But I appeal to all Jamaicans: Let that not become necessary. Let good sense prevail. Let us confront our challenges no matter how difficult they may be.
We did not cause the global crisis but we are suffering the consequences and we must ensure that we endure. We have come through tough times before. We will come through these tough times as well and we will come through them better and safer if we do so together.
God is good and I know that God will continue to bless Jamaica and its people.
http://www.jis.gov.jm/PMspeeches/htm...L_22__2009.asp
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