Unreal budget in Jamaica

Opposition spokesman on finance Julian Robinson suggested Thursday that the Government’s budget projections, presented in Parliament on Tuesday, are not credible.

“The budget, as laid out by the minister, may balance the books, but it will do so on the backs of the Jamaican people,” Robinson claimed, as he opened the Opposition’s response to the measures announced in the House of Representatives by Finance and the Public Service Minister Dr Nigel Clarke.

Robinson said that the higher-than-projected oil prices will have a negative impact on the trade and current account deficits, as the skyrocketing cost of oil is having a snowballing effect on all prices in an energy-intensive local and international economy.

“If you get the oil price forecast wrong, the inflation forecast is also going to be wrong,” Robinson argued, suggesting that the Government’s projections are all based on a fallacy.

“Last year the Government projected oil prices at US$45 per barrel and, based on its own estimates, the average price is likely to be US$73 per barrel by the end of this fiscal year. This is more than 60 per cent higher than the amount that was projected for FY 2021/2022 in the Fiscal Policy Paper tabled in February of 2021. The US$67.50 per barrel projection for FY22/23 is lower than the revised estimate of US$73 per barrel for FY21/22. This simply does not make sense, given the changing global environment,” Robinson argued.

He said that, while the higher oil prices will allow the Government to collect more revenues from the taxes on petroleum products, the inflationary impact of higher oil prices on businesses and consumers will result in a fall in real disposable income.

“Therefore, businesses and consumers will have less money to buy other consumer goods and services, after they pay their fuel, light, and water bills,” he added.

He also slammed the increase in the National Minimum Wage, contending that moving it from $7,000 per week to $9,000 per week was “grossly inadequate”.

“The increase to $9,000 is far from what it needs to be. In fact, inflation has already eaten it away,” he said, reiterating that the $12,000 minimum wage proposed by the Opposition last year would have been much more effective.

“I have to ask the minister directly: How does a single parent pay for food, rent, light, water, transportation, Internet on $9,000 a week?” he stated.

“To put it into perspective for my colleagues across the aisle, $9,000 cannot even buy a single one of the many bottles of the Rosé Champagne that a minister, a councillor, and their colleagues enjoyed last September during their no-movement day celebrations at the height of the deadly pandemic,” he charged.

“When our party is in Government, we always peg the increases together, and so we and the 20,000 guards in Jamaica want to ask the minister: What is the reason for this differential? Why do such a disservice to one of the hardest working groups of Jamaicans?” he asked.

Robinson lamented that over the past two years of the pandemic, security guards have stepped up and proven their worth and resourcefulness on the front line, and have done so while offering exemplary customer service.

“So why ‘short’ them? We call on this Government to rethink this decision and give the guards their due. The same percentage increase should be given to them immediately,” he urged.

He said that, on behalf of the workers of Jamaica, the Opposition was calling for an increase in the minimum wage to $12,000 per week, “which we believe would better allow people to meet their basic needs”.

Robinson also noted that some employers of minimum wage workers may need to reorder their arrangements where, for example, a domestic helper works four days a week, instead of five, and has the extra day to work somewhere else.

He said Jamaica needs to get to a point at which “minimum wage” is no longer a subject, but instead look at implementing a mechanism to determine a “liveable wage”.

Turning to education, he called for urgent action to stem the crisis in the sector, claiming that the novel coronavirus pandemic has been devastating to a whole generation of students.

He said that the report authored by Professor Orlando Patterson and his team has revealed many inconvenient and disturbing truths about the state of our education system, pre-COVID-19.

“If we are honest with ourselves, none of us should be surprised by its conclusions, as the findings of the Patterson report echo the findings of previous reports. We are not short on analysis; rather, we are short on the discipline, aka political will, to see through the necessary reforms implemented.” he said.

“On the 60th year of Jamaica’s Independence, the nation should not accept that half of the students, who spend 10 years in the formal system of education, leave school illiterate and innumerate and have no employable skill,” Robinson stated.

“It is within this context that I am disappointed not to see an allocation in the budget to begin the process of transformation, as recommended by the Patterson report. I acknowledge there will be short-, medium-, and long-term goals, but we must start and start now,” he said.

“We, again, have studies or technical analyses to start with. We need to tackle the implementation of the Patterson report as an urgent national priority,” he said.

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