By Al Edwards,
Acting Financial EditorWITH the budget two weeks away, there is a fission of anticipation among business circles as to what the Minister of Finance, Dr. Omar Davies will deliver.
This is the fiscal year when the Financial Sector Adjustment Company (FINSAC) debt comes onto the Government's books, with the Government expected to ask taxpayers to start repaying $112. 8 billion of remaining debt that it incurred in rehabilitating the financial sector.
The Finance Minister, facing an avalanche of debt that threatens to drive the country over the precipice of bankruptcy, has exercised and implemented fiscal discipline in the face of what can be considered insurmountable odds. For that he must be commended. He has steadfastly refused to run cap in hand to the IMF and has decided to tough it out.
Earlier this month he announced that he would be putting forward a budget totalling $188.3 billion ($16.1 billion more than fiscal year 1999/2000) of which $13.4 billion will be set aside to address the FINSAC debts.
Here are what some members of the business community are looking for from this year's budget and for that matter, what some are not.
Seprod's chief executive Byron Thompson : "I would like to see evidence of more effort to employ people and more investments in civic projects. I'd like to see interest rates come down so that businesses have at the very least a chance to survive. We've seen inflation continue to fall and attention must now be turned to interest rates."
I hope the budget provides more resources for the police to fight crime because the country is losing confidence in the police force's ability to combat crime. The Government should make it its top priority to prevent the bringing in of contraband goods through customs. The budget should reflect efforts to revolutionise and fundamentally change education in this country.
"The budget should help to generate growth so that we can pay off the FINSAC debt." MacMillan Advertising chief, Robert MacMillan: "What I don't want to see is an increase in corporate or personal taxes." Jamaica Exporters Association (JEA) president Beverley Lopez said : The Association was concerned about the constant whittling away of the capital budget because of the impact it was having on the development of the island's infrastructure. Noting that it will be a difficult budget when one looks at the parameters given, she said there may be a hike in user fees to make up the shortfall in the budget, but that the Finance Minister should be careful not to impose it on those who are least able to pay.
Chairman of Grace, Kennedy and Company, Senator Douglas Orane: "I don't expect any significant changes in policy. The problems are the same- grappling with expenditure well in excess of revenue. It is very likely that most of the budget will be allocated to paying debt and interest payments.
"I think the best way to increase revenue is to widen the tax net. It is unfair that PAYE contributors have to bare the brunt of the burden. I do hope there is no increase in GCT, income tax and corporate tax rates. There should be a wider tax compliance rate so that we have a wider tax revenue stream. It should be somewhere in the high 90's like in the U.S. and the U.K."
Managing director of EdgeChem, Doreen Frankson: "I would like to see more concrete measures put in place to improve employment. Based on my own experience with young people I have employed at the company I know a job can make a difference in the lives of people."
Group president and chairman of Capital and Credit, Ryland Campbell: " I would like to see a clear strategic direction in what the Government is doing to create jobs. Interest rates should continue to fall so that we can effectively compete in the international market.
"I hope the budget will fund a better programme for crime prevention so that potential investors can feel safe and comfortable in Jamaica- that is critical.
"There needs to be a more concerted effort towards education for the development of our people so that they can be internationally marketable. I would like to see the budget outline an orderly disposal of FINSAC's remaining assets. I'm sure that the Minister is aware that the farmers are crying out for help. There is a need to rebuild communities that people feel they belong to."
Grace Kennedy's finance director, Don Wehby: "Beyond the budget the country needs a 20 year development plan and the role of Government should be clearly defined. At the moment we have a piecemeal approach to national economics.
"I think the budget is going to be more of the same. It should in effect be an indicator of economic growth but that will be difficult with the FINSAC debt.
" There should be some sort of investment tax credit or holiday for new investments that would create employment in areas like I.T. and tourism. The foundation has been put in place for economic growth but the politicians need to be more creative. We have a situation where 66 cents on every dollar collected is going to go into paying debt. I hope there is no increase on GCT because that will create an inflationary scenario".
SUFFICIENT FUNDS
Paymaster chief executive officer Audrey Marks: "I would like to see sufficient funds allocated for education and training. It is vital that we produce a knowledge based labour force because it is the only way to compete in today's global economy.
"The budget should offer incentives for investments in Jamaica. It should facilitate an economic environment where there is a credit facility that will allow a return on investment that can compete with money on deposits."
George & Branday business development manager, Keith Collister: "The Government's first priority should be to balance the budget. This is of crucial importance as the assumption of the FINSAC debt onto the Government's balance sheet will raise the total debt to an unsustainable fiscal level endangering the Government's hard won creditability.
" A balance budget is one of the key factors in allowing local rates to fall much further from current levels. While no doubt very difficult to achieve at this time, I would like to see greater emphasis on long term goals and investments particularly in education and infrastructure."
Jamaica Chamber of Commerce president, Anthony Chang: "I would like more analysis to be made of the economic indicators such as Gross Domestic Product (GDP) because the business sector needs information on which it can rely.
"I believe it was a good idea to bring the FINSAC debt onto the budget. There is also a need to examine the effect of the double taxation on dividends which the Government began removing from listed companies last year but which is still applicable to non listed companies."
