KINGSTON, Jamaica, CMC – Prime Minister Bruce Golding says while Jamaica’s economic performance for the fiscal year is on track there are some challenges that need to be addressed.
He said that his administration is continuing to hold talks with various multilateral agencies as it seeks to consolidate the gains made in fiscal management and ensure the success of the island’s economic programme as outlined within the Standby Arrangement with the International Monetary Fund (IMF).
“While the performance for this fiscal year is broadly on track, there are challenges that must be addressed in order to achieve our medium term targets through to 2015/2016,” Golding said in a statement.
He said principal among these is the provision that must be made for payment of the seven per cent increase granted to public sector workers inclusive of the arrears covering the period 2009 – 2011. The Prime Minister said that provision also has to be made for legacy payments resulting from arbitration or judicial awards relating to Cricket World Cup, the construction of the North Coast Highway and the revocation of the JUTC bus franchise.
“Fulfilment of our programme commitments also requires agreement with public sector unions to ensure that future wage adjustments do not breach the annual targets designed to reduce the wage-to-GDP ratio to nine per cent by 2015/16,” Golding said, adding “this is the subject of intense discussions between the government and the public sector unions through the Public Sector Monitoring Committee.
Prime Minister Golding said that certain policy initiatives are also crucial to the success of the programme. He said these include tax reform aimed at widening the tax base and eliminating anomalies in the tax system and that consultations with key stakeholders are well advanced and the deliberations of the Special Select Committee of Parliament are expected to be concluded in time to allow for implementation commencing January, 2012.
Prime Minister Golding said an essential component of the tax reform programme is the reduction of discretionary waivers which deprive the government of revenue vitally needed to contain and eliminate the fiscal deficit.
“Another significant requirement of the programme is the completion of the divestment of Government’s shares in Clarendon Alumina Production. In this regard, negotiations are in their final stage and the negotiating team is expected to return to the island this weekend with a draft agreement.”
The Prime Minister said his government recognizes the need for strong and urgent action “to ensure the fulfilment of our obligations under the Standby Agreement including the adjustments that are required as a result of unplanned expenditure”.
Golding said he held discussions on Thursday with the technical officers and, based on the directions given, they are to report back to him, the Finance Minister Audley Shaw and the Education Minister Andrew Holness , who is tipped to replace Golding in November, on Monday.
Meanwhile, Prime Minister Golding has welcomed the figures released by STATIN on Thursday which showed “that the process of economic recovery is continuing (and) the economy grew by 2.1 per cent in the second quarter of this year which is above the Government’s projection of 1.5 per cent”.
CMC/pr/2011
