NOW THAT THE 2016 Budget debate has been completed and the measures put before the House of Assembly and the country, the average man and woman is bound to ask what does this Budget do for them as they struggle with the increasing cost of living.
It is not an unfair question since in the final resort everything done at the macro-economic level filters all the way down to the consumer. Those who did not know this before only have to cast their minds back to the housing mortgage crisis in the United States that almost caused the collapse of western economies.
The crisis worked its way down to the families who had taken on mortgages at the instance of businessmen and companies who knew better than most that the thousands of mortgage instalments paid every month by homeowners fuelled the major profits made by the large financial institutions at the top of the tree.
We are therefore all in this together, and the minister’s declaration that his Budget is designed to grow the economy will be accepted at face value by the head of households, but they will still be faced with increased prices in the supermarkets as a result of the imposition at the ports of entry on goods of the National Social Responsibility Levy.
Since the levy is imposed before the value added tax is imposed, then the cost of imported goods, and some locally produced goods, is hit with a double whammy of the new tax and more vat.
Prime Minister Stuart has assured the country that money raised by this levy is earmarked for totally desirable social purposes, principally the maintenance of top class medical services at the Queen Elizabeth Hospital. The re-equipping of the Sanitation Services Authority with 35 new collection trucks is also urgent.
But last Wednesday night Dr Dexter James, who manages the QEH, told a gathering of health practitioners he feared that if the $142.1 million estimated to be raised annually from this initiative were placed in Government’s Consolidated Fund, it would be misdirected and used for other public purposes.
A critical question is how did our economy come to this stage where in spite of the beneficially desirable objective of growth, a heavy dose of taxation, the very antithesis of growth given the recent history of our political economy, is inflicted on the country.
The debate made clear that the fiscal deficit is a thorn in the flesh of our best economic strategies, and we applaud the finance minister’s promise to cut expenditure by $50 million across the board. This is a step in the right direction although the disclosure of the details of the cuts would have raised public confidence in that strategy which we believe to be a serious approach to dealing with the expenditure side of the deficit.
To put it bluntly, the economy may be improving but it is still between a rock and a hard place based on what was said in the debate. It seems that debt restructuring and some form of privitisation may be part of an answer to our problems, especially if, as Minister Sinckler said, some managers of statutory corporations are not as careful as they might be in holding expenditure down.
But even in the face of our recent history, we are still prepared to suggest that if strong political will is exercised, we can succeed in taking this country back to safer land.
