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OPPOSITION BEMUSED BY NEW MOTOR VEHICLE DUTY POLICY
> >
> The Opposition Peoples National Party is expressing
> bemusement at the Government’s recent announcement of a
> “stimulus package” for the motor vehicle industry in the
> form of a substantial reduction of the import duties on
> motor vehicles.
> >
> The policy is intended to promote a rush in the purchase
> and importation of cars, so as to help car dealers who, like
> so many other sectors of the economy, are reeling from the
> toxic combination of the world recession and the
> Government’s inept economic management.
>
> However, at a time when the Government is running to the
> International Monetary Fund for loan financing to take the
> country through a balance of payments crisis, this
> “stimulus package” for car dealers is another stark
> instance of muddled policy formulation.
>
> The Government apparently misunderstands the objective of a
> “stimulus package”, which is supposed to stimulate
> consumption of domestic production, not imports.
> >
> Motor vehicle imports are a substantial user of foreign
> exchange, and a duty-incentivised spike in motor vehicle
> imports will also mean additional demand for expensive
> foreign oil, the largest draw on our balance of payments.
> Therefore, if the Government’s policy objective is met,
> this will simultaneously have the negative effects of
> translating into additional pressures on the Jamaican
> dollar, a reduction in the country’s Net International
> Reserves, and a worsening of our balance of payments
> problem.
>
> > Furthermore, in considering sectors who should be assisted
> by scarce Government resources, car dealers must fall very
> low on the list. Their employment of labour is
> relatively insubstantial and their impact on the wider
> economy is costly in terms of foreign exchange. Added
> to this, there is no shortage of motor vehicles in Jamaica
> at this time – to the contrary, Jamaica ’s roads are
> congested and our air quality is suffering from the high
> level of carbon emissions associated with heavy traffic
> loads.
>
> The new policy is both confusing and counterproductive, and
> the public should therefore be forgiven for suspecting that
> it may have been motivated by the presence in the Cabinet of
> at least one Minister with longstanding and continuing
> personal commercial interests in the car dealer
> sector. In this regard, the new policy also gives off
> a similarly unpleasant odour to the nepotistic Hydel bail out.
> >
> The Opposition Peoples National Party is expressing
> bemusement at the Government’s recent announcement of a
> “stimulus package” for the motor vehicle industry in the
> form of a substantial reduction of the import duties on
> motor vehicles.
> >
> The policy is intended to promote a rush in the purchase
> and importation of cars, so as to help car dealers who, like
> so many other sectors of the economy, are reeling from the
> toxic combination of the world recession and the
> Government’s inept economic management.
>
> However, at a time when the Government is running to the
> International Monetary Fund for loan financing to take the
> country through a balance of payments crisis, this
> “stimulus package” for car dealers is another stark
> instance of muddled policy formulation.
>
> The Government apparently misunderstands the objective of a
> “stimulus package”, which is supposed to stimulate
> consumption of domestic production, not imports.
> >
> Motor vehicle imports are a substantial user of foreign
> exchange, and a duty-incentivised spike in motor vehicle
> imports will also mean additional demand for expensive
> foreign oil, the largest draw on our balance of payments.
> Therefore, if the Government’s policy objective is met,
> this will simultaneously have the negative effects of
> translating into additional pressures on the Jamaican
> dollar, a reduction in the country’s Net International
> Reserves, and a worsening of our balance of payments
> problem.
>
> > Furthermore, in considering sectors who should be assisted
> by scarce Government resources, car dealers must fall very
> low on the list. Their employment of labour is
> relatively insubstantial and their impact on the wider
> economy is costly in terms of foreign exchange. Added
> to this, there is no shortage of motor vehicles in Jamaica
> at this time – to the contrary, Jamaica ’s roads are
> congested and our air quality is suffering from the high
> level of carbon emissions associated with heavy traffic
> loads.
>
> The new policy is both confusing and counterproductive, and
> the public should therefore be forgiven for suspecting that
> it may have been motivated by the presence in the Cabinet of
> at least one Minister with longstanding and continuing
> personal commercial interests in the car dealer
> sector. In this regard, the new policy also gives off
> a similarly unpleasant odour to the nepotistic Hydel bail out.
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