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JM | May 14, 2022

Mark Golding | Government must act quickly to help Jamaicans affected by desperation and inflation

/ Our Today

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Holness Administration being urged to now defer debt payments and cap ad valorem tax

Opposition Leader Mark Golding in a November 2020 interview with Our Today. (Our Today photo)

—By Opposition Leader Mark Golding

“The world is reeling from high inflation and geopolitical instability in the aftermath of the COVID-19 pandemic and the invasion of Ukraine. 

Here in Jamaica, our people are facing food and gas prices that are spiralling out of reach. Many are hungry, anxious and even depressed. Many are struggling to survive. 

Some mothers can’t find food for their children. Many are sick and can’t afford the medication. Many need to travel around but can’t afford transportation. The situation is intolerable. 

I have said it before, and I repeat it now. The Government must find ways to “Cushion the Crisis”. The Government has a responsibility to protect the people in this time of crisis. It is their solemn duty to balance people’s lives. 

When it comes to the gas price crisis, we have repeatedly called for them to get rid of the hedge tax. The Government has done nothing. 

When they tabled the budget in February that assumes revenues from an oil price of US$67.50/barrel, I identified an opportunity. The oil price has spiked to over US$100/barrel. So I called on the Government to cap the ad valorem tax on fuel to the price they have used in casting the budget, so that no additional tax is charged on the price above US$67.50. 

3D-printed oil barrels and percentage symbols are seen in front of dollar banknotes in this illustration taken May 25, 2020. (Photo: REUTERS/Dado Ruvic/IllustrationFile)

This will give motorists a break. It will give transport operators a break. It will give commuters a break. Take some of the pressure off the fuel price that is driving our light bills up and up. 

I repeat that call today. Last week gas went up by $4.50/litre. It went up by another $4.50 this week. Something must be done for the people, now! 

Prime Minister, cap the ad valorem SCT on fuel at the price used in the budget. This does not require legislation through parliament. It can be done today by a ministerial order under the Provisional Collection of Tax Act. 

What about the impact of food price inflation on the people? I again call on the Government to free up more resources to “Cushion the Crisis” until the spike in inflation subsides. How can this be financed? Gently defer the pace of debt reduction this year by a mere per cent of GDP (about J$40 billion), and use those resources to balance peoples’ lives through this crisis that is pushing their backs to the wall. 

Spend that additional two per cent of GDP to increase PATH benefits, increase poor relief, supplement the amount paid to NIS pensioners, and increase the social pension for the elderly.

And, as we try to restore the severe learning loss inflicted on our students by the pandemic, remove all taxes from tablets and laptops for students and teachers. 

Not only are we facing an inflation crisis, but the Government has created another crisis all on its own. It is seeking to drive a major reform of public sector employee compensation.

What is the nature of this reform? The Government wants to discontinue a wide range of non-taxable benefits that have been negotiated by the public sector unions over many years, and roll all of them into the workers’ taxable salaries. 

This is a complex undertaking, deeply affecting the livelihoods and morale of over 100,000 people. It is not simply a technical exercise of implementing what a consultant has come up with. It needs full consultation with the unions. It needs full transparency. It cannot just be forced on the workers, as if they aren’t entitled to respect, equal rights and justice. The Government must negotiate with the public sector unions. 

Instead, Jamaica is seeing an inept and arrogant approach by the Government to the reclassification exercise. The trouble began with the announcement by the minister that the motor vehicle duty concession would be withdrawn triggered a massive negative reaction. That had not been discussed before, and took everyone by surprise. 

It has created anxiety and mistrust. It is caused chaos in society.

NWC strike – no water, schools close, businesses close.

Then the air traffic controllers went on strike – airports were shut down, flights were cancelled, and the economy was hit hard. The JCSA has given notice of industrial action, because the Government has ignored their claims for 2021/22 in seeking to roll up their benefits into taxable salary. Public health inspectors are also restive. 

All this turmoil is reminiscent of 1968, when “Everything Crash”. The arrogance of this Government is pushing the country deeper into a crisis. 

This public sector compensation reclassification exercise has gone off the rails badly. Trust has been damaged because of the failure to treat the public sector workers as real partners deserving of respect, and the failure to share full information with their unions. 

It is not good enough for the Prime Minister to ask public sector workers to be patriotic and passive.

It is the deep mistrust, by his Government’s non-transparency and disrespect, that has caused the industrial unrest and major disruption, not seen in Jamaica for decades. 

National Housing Trust (NHT) workers voicing their disapproval with the pace at which wage negotiations drag on by walking off the job and staging a protest in New Kingston on Friday, May 13, 2022.

The Government must reset the process. The Prime Minister should acknowledge the mess his Government has made of all this. He should publicly commit to a new and better way forward. 

That process must have built into it full transparency and genuine negotiations. This is impatient of debate, to create an atmosphere of trust that can result in a successful reform. 

This reform is too important to Jamaica’s future for it to be derailed by inept political management. I remain willing and able to play a constructive role in support of the process.”

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