This is the word from Opposition Leader Mark Golding as he on Tuesday made his maiden contribution to the budget debate in parliament, since assuming leadership in November of the island’s main opposition, the People's National Party.
“The budget for the coming fiscal year only makes provision for J$8 Billion (less than 0.5% of GDP) in direct Covid-related social support for vulnerable Jamaicans. This is half of the amount provided in the fiscal year now ending, which itself proved to be far too little,” Golding pointed out.
He said “ this budget does not do right by the Jamaican people, especially the poor, those earning low wages, the unemployed, and elders struggling to survive on the meagre NIS pension that has not been increased since 2018.
“And it is not just individuals who are struggling. Service industries, especially tourism, entertainment, transport and sports, have been hit badly. In those sectors, businesses both large and small now have their backs to the wall. The loan moratorium made available to some of them has now come to an end, but their cash flows have not recovered,” Golding lamented.
The Opposition Leader told parliament that “these businesses need help from the Government to survive. Jamaica’s economic recovery requires their survival. However, the Government has only allocated $5 billion (0.25% of GDP) for business support in the budget. This will not be nearly sufficient, given the scale and likely duration of the impact on these industries, he informed.
He supported the call by Shadow Minister of Finance Julian Robinson for the Government to spend an additional J$21.5 billion, or about 1.0% of GDP, to fund an adequate programme of support, pointing out that in some countries, the average expenditure on Covid relief is 5.8% of GDP, while others such as the USA and the UK, have provided over 15% of GDP. “Many developing countries have spent at least 3% of GDP to help their populations get through the crisis,” he said.
The Opposition leader noted that “the focus of this additional support must be spending on the vulnerable sections of the population, and assisting businesses, especially MSMEs, that are struggling to survive.
“This additional support would also serve as a significant stimulus to the Jamaican economy. People who receive the assistance would spend it on food and other basic needs of life, multiplying the flow of money throughout the economy. It would help to reverse the negative growth more rapidly, and reduce the impact on the debt to GDP ratio.”
Golding reiterated how the additional resources should be spent: ·
- $5 billion of additional support for micro and small businesses, with loans and grants supported by business development and financial literacy training;
- $5 billion of additional support for individuals and households, with a special allocation for female headed households;
- $3 billion of additional support for farmers, including more buy-back programmes for their surplus produce, and small-scale irrigation systems;
- $3.2 billion more for a comprehensive broadband roll-out, prioritizing connecting communities and schools, especially in rural areas and deprived inner city communities;
- $2.3 billion more for a renewable energy/energy efficiency programme for households, with a loan facility for energy saving devices;
- $2 billion more for incentive pay for health care workers; and
- $1 billion more for island-wide digital literacy training.
“This additional support and stimulus package of at least 1.0% of GDP would be financed by a reduction of the primary surplus target to from 6% to 5%. We would support a further suspension or adjustment of the fiscal rules to facilitate it. The legislation provides for this, where the economy is impacted by a severe shock, as it clearly is now.
“Our approach is a strategic response that would more comprehensively protect the population from the ravages of the economic contraction. It would ensure a speedier economic recovery for the country. It would give some hope to the Jamaican people. And it would reduce the mounting social tensions, which have the potential of manifesting in unpleasant and damaging episodes that we would be wise to try to avoid,” the Opposition leader said.
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