By Phyllis Thomas, News Editor 
THE GOVERNMENT'S proposed expenditure budget, presented to Parliament last week, has left many Jamaicans edgy about how this $329.8 million budget will be financed.
With the country painted in an embarrassing economic corner, and with very limited options being offered as means of getting out of it, heavy taxation seems the most likely route that the Government will take to finance this budget. But Jamaicans feel that that is going to impact the working class in very negative ways, and by extension, the Memorandum of Understanding (MoU) signed by the Government and the trade unions just over a month ago.
The MoU, a two-year period of wage restraint, stipulates that public sector employees will see a three per cent cap on any increases in their wages during the period 2004 to 2006. Restraints are also placed on elected officials, including Cabinet ministers, mayors and parish councillors. The MoU also speaks to restraint on Government spending and employment constraint.
But if there are heavy taxations, ordinary Jamaicans will be victims over and over again because they are left with salaries which will make no movement over the next two years, yet prices will rise as a consequence of increased taxes.
Should a situation like that emerge, the unions would have all right to feel that the terms of the MoU have been undermined.
UNIONS FEAR WELFARE CUTS
In fact, Danny Roberts, vice-president of the Jamaica Confederation of Trade Unions, was quoted in the Financial Gleaner on Friday as saying that the unions are worried that workers will be hit by cuts in social welfare spending while at the same time, taxes may be increased.
Already, the Jamaica Public Service Company is seeking a rate increase, which is being considered by the Office of Utilities Regulation (OUR), and if this is granted, could be as much as 18 per cent to become effective as of June 1 this year.
But as if that is not enough, the OUR is suggesting that Government free Jamaica Public Service Company (JPSCo.) from paying tax on its oil bill, and recoup the $770 million instead from us, JPSCo.'s customers. J. Paul Morgan, OUR's director-general, said he subscribes to the view that it was not good policy to tax the inputs to means of production, but to tax the outputs. Therefore, he said, the Government must add General Consumption Tax (GCT) to light bills instead of taxing the supplier of the service because it would result in cheaper fuel charges and save customers money. A direct threat to the stability of the MoU that one.
Those signing onto the MoU must surely be having second thoughts now.
ECONOMY ON THE RISE
Minister of Finance, Dr. Omar Davies, has said that he is confident that this fiscal year will be the best since his appointment in 1993, as the country was expecting a tremendous boost in its economic prospects. And last week the main index of the Jamaica Stock Exchange broke the 100,000 mark signalling that something is happening. Analysts say what is happening is that companies are being more profitable and there is greater investor confidence in the economy.
We wait for this new economic surge to unfold just as we hold our breaths for the next couple of days when the Minister will tell us how he is going to finance the budget, bearing in mind that whatever he comes up with could well support that surge or put a spoke in the wheel.
The country's 18,000 teachers have now joined the other unions in giving the MoU their approval but now they have a lot more than a two-year wage freeze to think about. The Government is to launch its pilot project which will see teachers' remuneration being pegged to their performance. Educators have come out against it and I agree with them that the timing is wrong. No instrument for measuring performance, implemented at this time can be fair to the teachers. Until we are able to create an acceptable environment for them to work in, as I had written in another article, "we giving dem basket to carry water." That has not happened and will not happen in this fiscal year for education. Although the allocation to education is $30.2 billion, which is $677 million more than last year, it is only 10 per cent of the national budget. That's not going to take us far no matter how we try to s-t-r-e-t-c-h it.
Comments? You can e-mail me at phyllis.thomas
@gleanerjm.com
