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Budget debates and political expediency
Thursday, April 28, 2011
Finance Minister Audley Shaw will open the budget debate today. I do not like to comment on the budget until the debate is over. Toward the end of the debate the prime minister or the minister of finance might make some surprise announcements which make commentaries redundant. I recall that it was at the end of the budget debate in 1973 that Michael Manley announced free education. With that in mind, I prefer to wait until the debate is over to comment on the budget itself.
Today I will comment on political expediency mainly as it relates to the annual budget presentation. Finance Minister Audley Shaw has been receiving congratulations for being able to bring Jamaica to the point of making repayments of loans that make up less than 50 per cent of the budget. But had the JLP government the types of loans that the previous PNP government was able to access, would we not have had more of the same in terms of how the budget is administered?
SHAW... opens budget debate today. MANLEY... announced free education at the end of the debate in 1973
SHAW... opens budget debate today. MANLEY... announced free education at the end of the debate in 1973
#slideshowtoggler, #slideshowtoggler a, #slideshowtoggler img {filter:none !important;zoom:normal !important}
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Isn't it because the International Monetary Fund has set the rules and the government has no alternative, especially since there are fewer good negotiators in the JLP than in the PNP? I ask these questions against the background of the following bit of recent history. As part of fiscal management and a need to develop personal responsibility on the part of the UWI students (or so it was advertised), a cess at the university level was introduced late in the JLP government of the 1980s. Certain subsidies, such as free uniforms for high school students, were also removed.
I believe that one of the reasons the PNP went even further away from free education when they returned to power in 1989 had to do with the decline in returns from the bauxite levy and to shake off the impression and the label of financial mismanagement. But the same JLP who gave the impression that free education as implemented by the PNP in the 1970s was an act of financial recklessness, promised free education in the campaign before the 2002 elections if they became government then.
The JLP continued this free education campaign in the run-up to the 2007 general election and proceeded to institute some aspects of free education after winning in 2007. This is why I ask first, if Shaw's prudent financial management has to do with the dictates of the IMF and second, had the JLP government been able to negotiate a loan that allowed Jamaica to avoid the IMF rules, would we return to making payments in excess of 50 per cent of the budget? Politics is about making voters happy as was seen in the JLP's seeming about-face with regard to free education being an act of mismanagement. Had the JLP won a third term in 1989, would school fees have been re-introduced then?
In the 1980s when the bitter medicine of the IMF started to have its effects on the economy, no amount of talk of financial wizardry could help Edward Seaga. By December 1982 the PNP was leading in the opinion polls. Seaga called a snap election late in 1983 on a three-year-old voters' list and the PNP refused to contest the election. But the PNP would have lost anyway because the JLP had surged ahead in the opinion polls following the Grenada invasion in October 1983 in which Edward Seaga played a positive role.
On the face of it, Edward Seaga called the snap election because the then PNP general secretary Dr Paul Robertson called for Seaga's resignation as finance minister - not as prime minister - following Jamaica's failure of an IMF test. But the real reason was that the JLP government found it necessary to increase the price of gasoline on December 31, 1983 (the snap election was held on December 15, 1983). So Seaga expediently made sure that the elections were out of the way before the sharp rise in gasoline prices.
There has been a lot of common-sense talk about alternative energy supplies. I agree with all of them except the one about nuclear energy which I believe would be a serious risk in a natural disaster. Alternative energy has been spoken about from the 1970s. Why hasn't it been implemented? Is the delay only due to cost? Previously, I thought that it was only because of an oil game and I wrote as much. As soon as oil-dependent countries plan for alternative energy, the big oil companies of the world reduce their prices. Oil-dependent countries then cancel their plans and continue their use of oil only to realise the deception when oil prices jump again.
But there seems to be more to it than that. Without oil, could a shipping line be solicited for campaign money? Do politicians see the need for campaign money as more important than doing what is best? But even so, are the politicians totally to be blamed for this when their party "volunteers" never do anything free? For these reasons and more, complete non-oil energy will come into being only after most Jamaicans get serious and demand it.
ekrubm765@yahoo.com
Read more: http://www.jamaicaobserver.com/colum...#ixzz1Koy4N9AR
Thursday, April 28, 2011Finance Minister Audley Shaw will open the budget debate today. I do not like to comment on the budget until the debate is over. Toward the end of the debate the prime minister or the minister of finance might make some surprise announcements which make commentaries redundant. I recall that it was at the end of the budget debate in 1973 that Michael Manley announced free education. With that in mind, I prefer to wait until the debate is over to comment on the budget itself.
Today I will comment on political expediency mainly as it relates to the annual budget presentation. Finance Minister Audley Shaw has been receiving congratulations for being able to bring Jamaica to the point of making repayments of loans that make up less than 50 per cent of the budget. But had the JLP government the types of loans that the previous PNP government was able to access, would we not have had more of the same in terms of how the budget is administered?
SHAW... opens budget debate today. MANLEY... announced free education at the end of the debate in 1973
SHAW... opens budget debate today. MANLEY... announced free education at the end of the debate in 1973#slideshowtoggler, #slideshowtoggler a, #slideshowtoggler img {filter:none !important;zoom:normal !important}
1/1 Isn't it because the International Monetary Fund has set the rules and the government has no alternative, especially since there are fewer good negotiators in the JLP than in the PNP? I ask these questions against the background of the following bit of recent history. As part of fiscal management and a need to develop personal responsibility on the part of the UWI students (or so it was advertised), a cess at the university level was introduced late in the JLP government of the 1980s. Certain subsidies, such as free uniforms for high school students, were also removed.
I believe that one of the reasons the PNP went even further away from free education when they returned to power in 1989 had to do with the decline in returns from the bauxite levy and to shake off the impression and the label of financial mismanagement. But the same JLP who gave the impression that free education as implemented by the PNP in the 1970s was an act of financial recklessness, promised free education in the campaign before the 2002 elections if they became government then.
The JLP continued this free education campaign in the run-up to the 2007 general election and proceeded to institute some aspects of free education after winning in 2007. This is why I ask first, if Shaw's prudent financial management has to do with the dictates of the IMF and second, had the JLP government been able to negotiate a loan that allowed Jamaica to avoid the IMF rules, would we return to making payments in excess of 50 per cent of the budget? Politics is about making voters happy as was seen in the JLP's seeming about-face with regard to free education being an act of mismanagement. Had the JLP won a third term in 1989, would school fees have been re-introduced then?
In the 1980s when the bitter medicine of the IMF started to have its effects on the economy, no amount of talk of financial wizardry could help Edward Seaga. By December 1982 the PNP was leading in the opinion polls. Seaga called a snap election late in 1983 on a three-year-old voters' list and the PNP refused to contest the election. But the PNP would have lost anyway because the JLP had surged ahead in the opinion polls following the Grenada invasion in October 1983 in which Edward Seaga played a positive role.
On the face of it, Edward Seaga called the snap election because the then PNP general secretary Dr Paul Robertson called for Seaga's resignation as finance minister - not as prime minister - following Jamaica's failure of an IMF test. But the real reason was that the JLP government found it necessary to increase the price of gasoline on December 31, 1983 (the snap election was held on December 15, 1983). So Seaga expediently made sure that the elections were out of the way before the sharp rise in gasoline prices.
There has been a lot of common-sense talk about alternative energy supplies. I agree with all of them except the one about nuclear energy which I believe would be a serious risk in a natural disaster. Alternative energy has been spoken about from the 1970s. Why hasn't it been implemented? Is the delay only due to cost? Previously, I thought that it was only because of an oil game and I wrote as much. As soon as oil-dependent countries plan for alternative energy, the big oil companies of the world reduce their prices. Oil-dependent countries then cancel their plans and continue their use of oil only to realise the deception when oil prices jump again.
But there seems to be more to it than that. Without oil, could a shipping line be solicited for campaign money? Do politicians see the need for campaign money as more important than doing what is best? But even so, are the politicians totally to be blamed for this when their party "volunteers" never do anything free? For these reasons and more, complete non-oil energy will come into being only after most Jamaicans get serious and demand it.
ekrubm765@yahoo.com
Read more: http://www.jamaicaobserver.com/colum...#ixzz1Koy4N9AR