Delroy Chuck IF WE thought the government was prepared to lead prudently, starting with this year's budget, we are clearly mistaken. This government knows best and, in spite of worthwhile criticisms and useful suggestions, is determined to continue on the same deadbeat path of decline, decay and disaster. The 2003-4 budget estimates reveal nothing new, nothing different from the previous nine or ten budgets, to show the government's willingness to make the hard decisions, to govern prudently and to share the sacrifice imposed on the rest of the society.
The 2003-4 budget estimates show government's intention to spend more in this fiscal year than it spent in the previous one, which is simply incredible and disastrous. Moving from 225 to 261 billion dollars, an increase of $36 billion or 16%, the only conclusion is that the government is not interested in fiscal prudence, or any significant reduction of the fiscal deficit or any attempt to curb its appetite for debt. In last year's budget of $225 billion, the government was unable to find 35 billion dollars or more in revenue or loans to close the fiscal deficit of approximately 9%; and, in spite of this inability to service a $225 billion budget, we now have a $261 billion budget, which will probably end up at $280 or $300 billion after the first and second Supplementary Estimates.
SPENDING MORE, NO ECONOMIC GROWTH
While the government's budgetary expenditure has multiplied tenfold over the past ten years, the economy has not grown commensurately and in fact has not grown 10% cumulatively. Shockingly, our debt stock has increased tenfold in Jamaican dollar denomination or more than doubled measured in US dollars, moving from under US$5 billion to over US$10 billion, with the overwhelming amount of it used for housekeeping expenses. While our national debt has increased by over US$5 billion during the past five or more years, there is little evidence of growth, and abundant evidence of decay and disintegration.
Inexorably, our government is intent on building a higher mountain of debt to burden and strangle this and future generations. What a legacy to bequeath to our children and grandchildren? In the past year alone, I reckon our debt increased by just under 100 billion Jamaican dollars and, at this exponential rate, I predict it will increase by a further 150 billion Jamaican dollars before the end of this fiscal year, which means that we will be in the region of 750 billion dollars at the start of the next fiscal year. Naturally, if there was evidence that the borrowed money was being spent wisely, for productive ventures and to improve our community infrastructures, we would have fewer complaints, but residential roads, gullies and facilities deteriorate and, if the truth be told, the whole society is rotting.
SAME ACTIONS, NO RESULTS
Right thinking citizens should be clearly annoyed and, quietly, many are but we need to hear their protests. We tread on the same fiscal and monetary path, which is the same path that has failed to provide economic growth or social well being. Is it possible for this government to think differently and do things differently? Will the government frankly acknowledge we are not on the right path? How can it ever be assisted when it will not listen or accept that things must be done differently? Here we have a government at the beginning of an historic fourth term, wisely advised by the private sector to cut expenditure and govern prudently, simply failing or unable to make the hard decisions.
To be sure, the weak and vacillating leadership of the government will eventually be forced to make the hard decisions. A time will come when further borrowing will simply be impossible and no sensible investor will lend the government anymore. When that time comes, and it cannot be far away, the government will have to cut expenditure and downsize its operation. Why wait? At present, the government gobbles the bulk of loans available to the market, crowding out the private sector, and the country is therefore failing to generate or create wealth.
BUDGET FAIRY TALE
No doubt, the Minister of Finance, Dr. Omar Davies, will spin and deliver a budget fairy tale of great optimism, demonstrating that his critics are wrong and everything is on target, in the right place, and fiscal victory is around the corner. Well, watching the war in Iraq, I can't help but compare the Iraqi's Minister of Information, who still believes Iraq is winning the war, with many of our Ministers of Government who believe we are on the right path - somehow, when things are going wrong, truth is distorted.
Sadly, the government's present approach is not to cut expenditure but to increase revenue and loans, which is simply a pipe dream. Sure, we will hear of new taxation, more loans and better revenue collections, but are these realistic expectations? How often have we heard of government's failed attempts to bring the informal sector into revenue collection? Can the likely increased taxes and more loans create growth and development?
The budget is incredible and unsustainable. It will put the economy and the whole society into a further tailspin, which can only lead to greater hardship and more suffering, without any real benefit. Sooner rather than later, there has to be a realisation that government has to downsize, has to cut expenditure and has to craft a budget that makes sense and is credible.
Delroy Chuck is an attorney-at-law and Opposition Member of Parliament. He can be contacted by e-mail at delchuck@hotmail.com.
