Opposition Leader Mark Golding has dismissed as “hype” last week’s announcement by Finance Minister Dr Nigel Clarke that there will be no new taxes.
Instead, Golding says the Government plans to collect an additional $99 billion in new taxes during the upcoming fiscal year. He made the assertion on Tuesday during his contribution to the 2022/23 Budget Debate in the House of Representatives.
“Last week Tuesday, the minister beat his chest and colleagues on that side beat their desks as he announced that there will be no new taxes. I say to the people of Jamaica, do not be fooled by the hype. The government plans to collect $99 billion more in taxes in this coming year. That is an increase of $99 billion in taxes from the people,” Golding stated.
“Imagine this is happening in a year when many have not recovered from the Covid recession, and many more are facing hunger and sufferation from the effects of the war in Ukraine,” he added.
Golding argued that $99 billion more in taxes is unconscionable at a time like this.
“We believe that the government must rearrange the budget, and find a way to give some of this $99 billion back to the people. Help the people to survive this world crisis that is overcoming us,” he said.
The Opposition leader noted that the finance minister has signalled that he plans to use $2 billion to cushion the impact of high fuel prices on some transport operators.
“He is yet to tell us how this will work. It was a promise that was clearly made ‘on the fly’, with no details. He is also promising a mere $750 million for care packages,” Golding stated.
“Of the $99 billion in additional taxes, all he is giving back in this crisis is $2.75 billion,” he said.
He argued that the amount represents a mere 0.1 per cent of GDP.
He said: “That is one-tenth of one per cent. It is a drop in the bucket. It is not enough to meet the needs of our people, the impact will be minimal”.
He added that “More children will suffer. They will go to bed hungry with just a little sugar and water to wet their lips. The elderly will suffer, too”.
Golding said even the fit and the strong are suffering as the rising costs for electricity and water affect every aspect of life.
“With those going up, the people are facing lick after lick after lick. Cushion the lick, Minister [Clarke]. Cushion the crisis, Prime Minister,” Golding pleaded.
The Opposition leader acknowledged that some of the measures needed to give Jamaicans a break will come at a fiscal cost. But, he noted that the government ran a fiscal surplus of 0.3 per cent of GDP this year, and is budgeting to do the same in the upcoming fiscal year.
He noted further that the plan is to reduce the public debt as rapidly as possible, to 60 per cent of GDP by March 2028 but warned that the “negative social impact of continued excessive fiscal conservatism will do lasting damage to our society”.
“I would support additional expenditures of at least 2 per cent of GDP [about $40 billion] to address these critical needs facing the society. It is time to focus on helping our people. It is not the time for excessive fiscal conservatism,” Golding said.
He warned that “The government is playing with fire by leaving vulnerable populations unprotected in this vortex of high inflation and the unbearable cost of living”. He also argued that with real GDP growth of 3.5 per cent projected for the coming fiscal year, this expenditure would not worsen the debt to GDP ratio.
“On the other hand, it would also begin the process of addressing some of the major social deficits that cause our low national productivity, and our dire problem of violent crime,” he said.