Champs debacle, but any accountability?

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The dust has settled on another ISSA Champs, at the National Stadium. The sport was its usual spectacular show of the best of Jamaican school athletes. But, their performances are only part of the show. The running of the event needs assessing, too.

In keeping with good organizations, one hopes that a period of stocktaking is going on by the principal organization and by the overseeing government ministries. Things that worked well should be kept and developed and those that did not work well should be re-examined and eliminated or improved before the next set of events. However, one has to wonder if this process happens with ISSA and if it’s done with full honesty. Why do I say that?

First, it’s been clear for a long time that ISSA cannot manage well ticketing for the event. My first direct experience was in 2014 when my ticket did not give me access to the seat to which I was assigned. That year, tickets had been oversold and the police intervened to stop the stadium having too many people for safety, in their opinion. I was disappointed and had to watch Champs on TV at home, while people tried to clamber into the stadium. ISSA apologized and some talk of compensation circulated, but that fell flat. I have never bought another ticket for Champs. Why should I? It guarantees me nothing.

Since then, I have seen and heard of the debacle of getting tickets, to the extent that this year reports were circulating fast of scalpers getting tickets and many would-be spectators disappointed from before the event. Clearly, as days passed, ticket prices rose and those who wanted them badly enough had to pay dearly for the pleasure.

Many simple solutions to the ticketing problem exist, and the only issue is whether ISSA will implement any and if they do not, whether anyone will be held accountable for another debacle. So far, the evidence is that accountability is not one of the features we will see.

Second, we have several issues regarding the behaviour of schools and athletes. This year’s signature embarrassment involves a foreign student whom it appears was allowed to compete in accordance with rules but one has to wonder about the sense of the rules. Normally, if one registers for something but cannot present oneself at the due time in person, then the registration lapses. So, in a competition, that usually means disqualification. It’s tough, but that’s normal for lots of things. It’s happened to me, my team, other athletes, students sitting exams, etc. It’s life. It seems that this principle did not apply to the foreign student, with his school arguing that logistical problems prevented his arrival in the country by the due date. Well, that’s unfortunate, but better luck next time. Like my having a ticket for a flight and arriving late, I miss the flight. Simple. I cannot expect the airline to accommodate my lateness, no matter whose fault it is. From that mistake come other issues.

The said foreign student, apparently abetted by his school, paraded his national flag at the stadium in a celebratory lap. Now, let’s not confuse matters of national pride with its various displays. Of course one should be proud of one’s nation, but the time and place for such displays need to be appropriate. In my view, Champs in a national school event; it is not an competition that involves foreign schools and foreign athletes who compete for local schools are not competing for their country. Therefore, if displays of pride are to be shown at that event, I think they should be about the schools involved. Clearly, there’s a thin line because we could argue that if a student wanted to parade something that raised the pride of a local area that might seem consistent with the event. For that reason, the best way to deal with such situations is to try to cover them in the rules. That’s what ISSA did in 2015 with the ‘ambush marketing’ debacle that embarrassed one of the main sponsors, while promoting an individual athlete and his sponsor (who was not a sponsor for the event). We have had no repeat. If Champs thinks the parading of other national flags in alright, then it can state that explicitly or ban it explicitly. If it accepts it, then look out for other foreign students to do the same—there are many. It could become more embarrassing when those students come to represent Jamaica at international events, such as CARIFTA, for which they are eligible. Do we want to see an athlete representing Jamaica deciding to hoist his or her mother country flag? Think about it. If it’s the flag of another CARIFTA country, one has one type of problem; if it’s a non-member country, we have another problem. We also have the embarrassment to Jamaica of its athlete not displaying our national flag. Impossible, you may say? Really?

Finally, ISSA is one of many Jamaican organizations that appear to be laws unto themselves. They often shun publicity unless it is bad, and then there’s a rush to cover up the mistakes. They shun transparency and openness to critical opinions. That can only go on because they are shielded by the political directorate who have power over them.

This government has done much to make governing more transparent and accountable. It takes time for such an attitude at the level of the Executive to translate itself to other administrative levels. One way of getting that done faster is for the egregious examples to be highlighted and dealt with fast.

Jamaica diving headlong again to the bottom? Offshore oil? What for?

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Some days all I do all day is think; it’s extremely taxing, and occasionally not at all fruitful. It leads to some quite startling and disturbing insights. One such came to me today–not for the first time: education does not stop you doing foolish things. The motive forces that govern actions are much stronger than the sense to avoid trouble.

So, much of this week one piece of news had me bothered…really bothered. I read that Jamaica was intensifying research to discover offshore oil–Authorities step up search for oil offshore Jamaica. Now, this is not a piece of news that was unearthed from the archives of the 1960s or 1970s; it was fresh, this week. Now, age has made me a little sleepier than I used to be, and though my father turned 88 this week, his brain cells are still working well, and so are mine. So, in words that my father would relate to, ‘What the f**t di peeple dem a t’ink?’

So, I  am not even going to wonder if the assurances that the fishing grounds where exploration will occur will be damaged. I wont wonder what the payoff will be from this research and if it suggests exploitable reserves exist. I wont think if that exploitation will lead to jobs, for whom and for how long. I wont think about from where the substantial pool of investment funds will come. I wont think about controlling the revenues from such exploitation and how countries have struggled to manage revenue sources that are known to be finite, and thus unsustainable. Historically, we are closer in governance practices to Nigeria than to Norway. Got the point!

All I will do is ask ‘Isn’t the future in exploiting renewable energy sources’? Economic progress efforts that seek to exploit assets with limited life are doomed to encounter problems. How many centuries of experience and evidence do we need to understand that?

I will mention three words: sun, wind, water. These basic life elements will sustain us for longer than most of us can even romantically estimate.

As one of many countries that have had a serial aversion to exploiting simple solutions to deep-seated problems, Jamaica, once again, seems to be heading to the podium of medal contenders in this ‘race’ to the bottom. 

Facing challenges: CaPRI goes out of the box to explain Budget 2017-18

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I was in the pleasant company, over dinner midweek, of a varied groups of mainly Jamaicans, both old and young (my daughter was there), and some living locally and some living mainly abroad. We got into talking about ‘having it’ and what that meant and if it had been achieved. I said I ‘had it all’ and went on to explain that it was partly a question of money that I had accumulated during my life–though this was by no means mega millions–but did have the benefit of not really having to think about a budget every day, something that I had to do for many years. That’s not to say that I am not frugal: I am ‘mean’ like star apple! It also goes to the nature of personal contentment, and over time, I have tried to stop striving. It helps that I retired on a good pension. My wife still has a paid job and between the two of us our daily needs are well covered, financially. But, I get contentment from being able to use my time to satisfy my needs, and most of those are simple: Can I go walking when I want? Can I travel if I want? Is my life free of deadline? Can I say no to requests? Can I choose to help when I want to? And so on. I prize my liberty and am loath to give it up. For that reason, I am leery of nice-sounding attempts to get me to ‘do things’. Again, don’t get me wrong. I love to volunteer, but that means I decide, not someone else, when and where I send my energies, because I want to give fully when I give. Done!

I also mentioned that, for me, the greatest challenge in life now is to help people do things that they say the cannot. For some people that’s a simple nudge or helping hand to get started with something, often a clearly expressed desire that somehow has stalled. For others, it means breaking down a many-layered wall of resistance that has been built over time and reinforced, often by things that are not that rational–so fear has taken hold.

Simple example: the friend who hosted the dinner wanted to get back into golf. She had played a little, with lessons, etc, but an injury set her back badly. Coming back was both a physical and mental problem because the fear of a flare-up of the injury was there and the origin of the injury had deeper health risks. So, I offered to get her started again, gently, by having a session with a few clubs in my back yard. She did great and we spent about 90 minutes swinging gently. As I coach, I explained that I always like to end a session on a positive note, so when she took a good swing, connected well, and the ball pinged off one of the avocado pears on the tree in front of her, I said “Time to stop!” However, some of her previous health issues recurred and she’s not come back. But, she’s promised to do so, and needs to upgrade her equipment to remove their state of ‘disrepair’ as a cause of not resuming. Watch this space!

Another example is a high schooler who swims for the same club as my daughter who is ‘learning’ French. I put him under pressure by insisting on speaking French whenever we meet. My basic point is that he needs to free his vocal chords and get French words flowing naturally, without concern about correctness–that latter part we can fix. In other words, he needs to be like a toddler learning and babbling and not necessarily being coherent. It’s working, to a degree, and he’s less intimidated by the process now, but is still thinking too much. I speak at normal speed, first. Then, if he’s struggling, I slow it down to help him hear the words better as separate sets of sounds; fluent speakers elide a lot of words, so ‘la plume de ma tante’ can sound like ‘laplumdemataunt’ and it’s not obvious what are the separate words.

But, a bigger challenge is getting people to understand basic things about the world they live in. I am not a paid teacher, but I am someone who has often been a giver of instructions.

One of the huge challenges is just a language barrier–like with the French student. So, many people do not have the vocabulary for subjects, let alone the ability to understand what the words could mean. So, many attempts at teaching pass from teacher above head of student. In the class room that happens often at the start of a topic, but gets less as the topic is explored. However, in life, that lack of understanding can be near permanent. Add to that the fact that we do not speak alike. That is a huge problem in places like Jamaica, where the language of many ordinary people is not the language of many of those with so-called ‘high levels of knowledge’. People rale about Patois not being a language because one cannot automatically discuss all topics in that ‘tongue’. But, for things like a lot of economics, it can be done.

So, I was fascinated to see last night how an attempt to bring such knowledge out of the dark realm of ‘mystery’ into the light would work. Our national budget is about what we try to do with what we have (a variation on ‘having it’) and shifting around the resources is one of our big challenges, which honestly we often don’t do that well.

CaPRIThe Caribbean Policy Research Institute, put on a public forum, ‘Money Talks’ What does the new budget really tell you? in the open air of Mandela Park, in the heart of Kingston, Half Way Tree (HWT), at 6pm, plumb in the middle of evening rush hour. The topic was the recent Budget, and what it meant for the nation. Heady stuff. Well, no surprise, HWT was its usual hopping self, with taxis fighting to grab people and space, and street vendors trying to deny space and take people’s money, all at the same time and mostly in the same space. Let’s call that the hustle and bustle of Kingston. In the midst of that was a set up for the live event. In typical Jamaican fashion, the event was being animated by music. Nice vibes.

The event began a little late, but mainly because the MC wanted people to come closer, as ‘they do in church’. But, it was a forlorn attempt: it’s a thoroughfare and if people are reluctant to move from the outer edges by the walls, so be it–the need was for listening, not closeness 🙂

If this could be any prettier…

The event got underway with some pleasant words from a European Union official, as the EU is a major funder for CaPRI. He was followed by the main presenter, Dr. Damien King, was is a co-director and also head of the department of economics at UWI, Mona. One of Damien’s great traits is that he speaks clearly about economics and uses terms that are usually easy to grasp. So, he began talking about esoteric things such as the debt/GDP ratio, but had it illustration as a large mountain of money, and explained that its being 147% in 2012 meant that every Jamaican needed to work for no pay for a year and a half. Clear as a bell! So, it went on as he covered the broad set of measures of the budget, which I wont repeat here. The crowd, about 70 people seated and others around the edges, was absorbed and attentive. He simplified things and made some clear statements about the important matter of how does the budget affect each of us–a matter of personal circumstances and lifestyle.

Nice, simple graphics: a picture says a 1000 words

So, Dr. King has grappled with the challenge of making the budget more accessible to the public.

Now, getting the eyes and ears of fewer than a hundred people is obviously not the same as getting that attention from tens of thousands or even a million or more, but it’s a start, especially if everyone reaches one more, and like the multiplier in economics, gets the word spread by word of mouth.

So, I applaud CaPRI for this venture and hope that others in the domain of public policy see the need to get out from the contented position of ‘doing it the old way’ to doing it a way that is effective. I also like that it fits with my recent suggestion on this blog of a need for a non-partisan debate on the budget–it’s too important to leave to baying politicians. The CaPRI team did well to give people many of the building blocks to understand what the budget means overall, and to each of us, personally.

One of the ways that public policy is being better explained is through the use of social media, and I also applaud the Government and in part the Opposition for grasping this and using platforms such as Twitter and Facebook and Instagram to get out messages, but there’s a place still for live, in your face interaction, I must admit. Let’s hope to see more things like this. Some will see the similarity with ‘TED talks’ and if that helps then so be it. Take this approach to the clubs, to the beach, to the National Stadium…to the world!

Gap analysis: life with the Jamaican donut

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I’m a firm believer that one of the reasons why Jamaica is ‘stuck’ is because of our inability to adjust properly to a recent massive loss of human talent. Mass emigration, to the UK and North America, from the late 1950s, robbed us of people and their abilities. But, in that process, we also lost much of the fibre that binds a society together well: the continuity that is created through the exchange of messages between generations. We did not suffer from the skewed process of human casualty in war, by losing many productive men; we lost both men and women in their productive years.

Humans are not like many other animals, who can embed messages in their genes and pass them on naturally. We have to demonstrate and repeat messages to each other, through oral communication and from physical examples. In a simplified sense, we lost not only several generations of people, but the social links that they provided. I could characterise that by asking ‘What did it mean to have ‘barrel children’, raised by relatives and friends rather than parents?’

Many would say that the loss of people was compensated for by what those migrants were able to do by sending back a steady and substantial flow of remittances and goods that meant possibly allowing a better life for those who were left behind and became grateful recipients. But, I would argue that those financial and material flows, valuable though they have been and continue to be, could never be substitutes for the physical and social presence of the people who left. Think of it like the difference between a close relative coming to a birthday party as opposed to their sending a ‘regrets’ message and a gift token: the party may be great but the absence of ‘uncle’ or ‘aunty’ or ‘daddy’ or ‘mummy’ and their words and deeds isn’t replaced by the gift token and what it can buy.

Many would also argue that, because some (a minority) of those migrants returned, the loss to the country was not total. I would agree with that, but say that, like when you miss any event or come into it late, that never puts you in the same position as if you had been present all the time. Parents understand what it is to hear of the child’s performance rather than to witness it, first hand.

Some would say that those returnees bring back valuable experience that can then be shared with those who never travelled. I would agree with that, but also add that it’s a mixed bag. We know anecdotally that may returnees have a hard time readjusting to life in Jamaica, in terms of actual living conditions, and their expectations of life in Jamaica compared with life in the developed country. That’s one reason why many people are concerned now for the few who come back to Jamaica under duress, as deportees.

I cannot generalise and say whether that adjustment is harder for someone who spent many formative years in Jamaica before leaving, living a long time abroad, and then return (like my parents), whether the time spent abroad was deemed a good or bad experience, than it is for someone who spent early childhood in Jamaica, grew up abroad (living a happy or miserable life), and then returned to Jamaica many decades later (like myself). Or whether either of those situations compares to those who were not born in Jamaica, but were born abroad, and come to Jamaica to grow up, or later in their life to work, etc. They and other possible circumstances are all different.

So, in my mind, Jamaica stands like a donut–a wonderful looking and mouth-watering thing but with a hole in its middle. No amount of playing with that cake ever gets that hole filled.

Screen Shot 2017-03-21 at 2.38.26 AM

A metaphor for a nation?

What I know is that the threads of the society cannot be as well knotted as if it had never had to deal with that massive movement of people. The impact must be dramatic for us, losing say 1 million or more out of a total that is around 2-3 million. That proportionate impact must be dramatic. It is made more dramatic by the fact that a subtantial part of the later flow has been of some 3/4 to 4/5 of our graduates. We lost productive bodies, but very damagingly also lost productive minds. 

It’s true that many groups of people have thrived over the centuries because of similar mass emigration and we can marvel at refugees who fled their homelands and made their lives into wonderful examples of human resilience. But, we can always wonder how their homelands would have been if they had not had to endure their movement, whether because that was caused by repression or war or some other natural or human calamity. We know that many of our emigrants have done, and continue to do, well abroad. But, we have to wonder how those countries that lost masses of Jewish people because of pogroms, or Somalia, that lost masses as a result of war, or Uganda, that lost many talented people because of its leader’s xenophobia, would have fared without losing a good chuck of its talent.

Jamaica has had to live with the destabilising effect of its mass migration. Like a genie that gets out of the bottle, it’s too late to put the top back on. I think that successive governments and generations of Jamaicans have never really understood or dealt with that. That may explain why we have a hard time building a nation that is more consensual than one that is divided, even if we argue that the divisions were manufactured for the political benefits of a few. Jamaica sits closer to the end of societies that are anarchistic (with lots of people who want to act independently and not follow the guidance of ‘government’) than those which are closer knit in their thinking (and tend to follow the lead of their government).

That anarchistic strain has been more detrimental for us than it has been in other societies. It’s something that is at the root of the success of many societies–it contains the energy of innovativeness. It’s been detrimental because it’s gotten its ‘satisfaction’ through delving in things that are ultimately more self-destructive, like criminal activity, than nation building, like inventing new ways of benefiting each other.

But, don’t let me run too far beyond what I can reasonably argue.

Can we fill the gap that is the middle of the donut?

Jamaica needs a non-partisan national budget debate

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Jamaica is in the midst of an annual ritual, with its politicians arguing about the national budget presented to the country by the finance minister, then initially criticised by the Opposition spokesman on finance. Others then join in the debate. Outside of Parliament, some ‘experts’ discuss what has been presented openly–on television or radio, or in the pages of national newspapers, or in the social media spaces that now exist. It’s possible to get an idea of all of that discussion, but you’d be somewhat superhuman if you managed to do that. Outside Parliament, we also know that many people argue over the measures and the things that have not been done, and some will do their own calculations of how they will be affected. Some, will wonder what has been done, but not have much capability to make sense of it all, either nationally or even in their personal circumstances. Some also have no interest in any of this, and just wish the ‘noise’ would stop so that they could get on with life: they live with the measures and suffer or gain in silence.

But, one of the things that happens a lot in Jamaica is that much of the discussion that goes on happens with the tinge of political bias deeply ingrained in the views expressed. We need to stop that!

Over the weekend, I had an article published with my brief views on the latest budget. But, I also spent some time thinking about measures that could have been made. Some people react to those who criticise the budget presentation by saying ‘Show us your plans!’. I commented that this is empty rhetoric: national budgets reflect national priorities, so if say the Opposition were to present its plan, it would reflect its priorities. Those need not intersect with the priorities of the government of the day, so we may not have anything that is truly comparable. But, what I think would be useful would be to have a better idea of what certain well-defined options could mean for the country. Let me explain.

Governments often try to get tax revenue from what we may see as ‘low-hanging fruit’, often ‘sin’ taxes–adding levies on things such as alcohol and tobacco products. In other words, the government acts a bit like a nanny and says that it knows we do some bad things and will raise the cost of doing them. But, another approach would be for the government to adopt the view that certain common behaviour is not good for the health of the nation and suggest taxing them. Because many believe that leaving people to choose for themselves, governments may be reluctant to ban things, but will raise the cost of doing them. So, if the government has a belief that it should be helping to improve the nation’s health and, say, that it wants to reduce the occurrence of things like non-communicable diseases (NCDs), it could reasonably look at taxing things that contribute to those. Last October, the World Health Organization called for worldwide action on the consumption of sugary drinks. Its main message was:

‘Taxing sugary drinks can lower consumption and reduce obesity, type 2 diabetes and tooth decay, says a new WHO report…Fiscal policies that lead to at least a 20% increase in the retail price of sugary drinks would result in proportional reductions in consumption of such products.’

Many jurisdictions have already tried to do this with taxes on sugary drinks: Denmark has had such a tax in place since the 1930s. But, it’s now on the radar for many countries and regions. So, why should Jamaica’s finance ministry not make a calculation of what a 20 percent increase would yield, assuming that we got a proportionate reduction in consumption? We could then see what economists would call the ‘opportunity cost’ of the measure, because we could then see what we have decided to give up in potential tax revenue.

My experience in economic policy making informs me that such options are often assessed, but behind the closed doors of political discussion, some options never get out of the room. The personal preferences of ministers or the political calculations of parties may block some ideas from coming to the light. But, the nation needs to know these options. I may be a serial optimist to think that a political party would show such calculations. But, in a mature democracy, what would be better? When we hear that J$2 billion will come from a particular tax, it would be good to know that this amount could perhaps have come from another tax. Doing this would also force the government and the nation to understand or discuss why a tax was imposed and another option ignored. It would also force us to try to understand who will be affected by tax measures.

This last point is a gaping hole in the way that budgets are done in Jamaica: we do a poor job of pointing out who are the gainers and losers of budget measures. Doing that analysis is not easy, and is subject to lots of criticism, but we could live with that and try our best to refine our understanding in this area.

I taught a seminar on income inequality at the University of the West Indies, Mona, this week, and one of the things I asked the students to think about was who gained and who lost from the budget and what has it done for income inequality.

But, it’s not just a range of tax measures that need to be assessed this way. Jamaica should always have at its fingertips figures for those people and organizations who do not make a contribution when they should–tax avoiders and evaders. The cost of tax delinquency should always be in the budget discussion. At the start of FY 2015/16, Tax Administration Jamaica (TAJ) estimated the stock of arrears at J$350 bn. During the year, arrears amounts deemed to be uncollectible for the Years of Assessment 2009/10 and earlier, were written-off, as outlined in TAJ’s Debt Write-Off Policy, so that greater focus could be placed on pursuing more recent liabilities. As a result, the stock of arrears was reduced to J$125 bn at the close of the fiscal year. That’s a significant reduction. While TAJ may be doing its compliance work better, with its National Compliance Plan 2016/17, the nation needs to understand what it’s doing and what it hopes to gain. I’m for ‘naming and shaming’ tax delinquents–I’ve seen it work in other countries to great effect–but our laws and regulations on that are somewhat restrictive. Moreover, the finance ministry should at least tell us why going after more arrears is not one of the measures that it wants to see pursued more vigorously. If, say, we could get back 25 percent of the existing arrears during the fiscal year, then a J$30 bn tax package may not seem necessary.

In the same way that I suggested that we could see coherence in government policies, with health objectives being underpinned by fiscal measures, we could get coherence in matters like energy policy. As I tweeted over the weekend, policies should direct us towards energy efficiency and better use of renewable energy, such as through solar power and hybrid vehicles.

Neighbour country, Barbados, saw decades ago the sense of promoting the use of solar energy and its use has been compulsory in all new buildings for years. Why has Jamaica, with its similarly abundant sunlight, been so reluctant? Another debate.

We also need to be open and clear about why certain bodies of the nation continue to gets special treatment in terms of tax obligations. In that conversation, we need to ask and have answered why religious institutions are treated the way they are. Let me not be prescriptive for the moment, but suggest that the nation could do worse than to get a better understanding of what the current situation is deemed acceptable, and why in an era when the finance minister is urging us to be ‘responsible’, that burden only falls on certain shoulders.

There are other specific topics that could be brought into the conversation, but we would go far by having a more neutral discussion and facts on the topics touched on above. The finance minister has talked about the status of a range of public bodies and how they could contribute to government finances. This is a wonderful topic. Personally, I would have preferred to have seen us have that conversation first before deciding to dip hands into the surplus of the National Housing Trust to the tune of some J$11.4 bn. Call me old-fashioned for wanting to put the horse before the cart.

So, Jamaica, how mature are we? Can we have such conversations?

Sunday Observer Budget 2017/18 Commentary: The government still in the jaws of a dilemma

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Below, is commentary requested by The Jamaica Observer, immediately after this week’s presentation by the Finance Minister, Audley Shaw, in the debate on Budget 2017/18. It’s broadly in lines with comments I made on Nationwide Radio 90, the day after the Budget presentation.

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Business

The government still in the jaws of a dilemma

BY DENNIS JONES Economist

Sunday, March 12, 2017

JONES — How is the tax ‘give away’ going to be financed?

The government remains clearly committed to the idea of moving from direct to indirect taxation. This has merits, especially making it more likely that revenues will flow as expected — revenues in FY 2016/17 are already overperforming significantly.

However, it is my impression that this move is still taking more of a toll on those less able to afford this shift — the poor — in some sense or other. It’s also clear that where direct taxes remain, they are a heavier burden on those towards the top end of the income ladder.

The Budget leaves the government still in the jaws of a dilemma: it does not convincingly push the needle towards the much vaunted growth target of 5 per cent growth within 4 years, the so-called ‘#5in4’. (In that vein, it’s worth noting that the accelerated growth in 2016 has largely been driven by agriculture rebounding from previous drought, and is not reflective of the effect of policy measures.)

The tax measures — pulling $13.25 billion to cover the commitment to move the personal income tax threshold to $1.5 million — are revenue neutral: that is, income tax relief is offset by higher indirect taxes on ‘sin’ (alcohol and tobacco), but also on near-essentials such as electricity, fuel, and vehicle licence fees.

The passing through of these higher indirect taxes will impact the living costs of a wide range of people. In essence, the income tax gains of a few has been replaced by the tax-induced pain of many, and we see more give but even more take-back.

Benefits from income tax relief are diluted by higher spending by households on a range of basics and ‘luxuries’. This seems to be less growth-inducing than the opposite.

Key industry partners have already expressed various levels of dissatisfaction with some of the indirect taxes: Red Stripe argue that may have to curb their US$20 million investment since consumption of alcohol will be affected, in a market already near the regional bottom in its consumption per head of alcohol. The insurance industry sees a negative outlook from making group health insurance more expensive.

We are already seeing push-back from taxi operators to the increase in fuel taxes and vehicle licensing fees.

The reshaping of Property Tax is interesting, moving to more current valuations (2013, compared to the 2002 values, at present) but also reducing the rates that will apply. The following question needs to be answered, however: Will it really be the start of using regular valuations? We need to see how the revenues flow in the various parishes and whether the local councils will have the revenues badly needed to improve some roads and lights, etc.

Social safety net measures announced sound good, but more people other than those who qualify for PATH will need financial support.

The drawing down of $11.4 billion from the National Housing Trust (NHT) is not good, in principle or in practice. The surplus of this and other special funds is there to serve specific purposes, not for general financing of government activities. In that regard, it is not a prudent fiscal measure and is ultimately unsustainable.

To sum up, the budget looks set to hit both consumption and investment negatively, emphasising that it is not growth-positive. But it also looks at risk from offering help it sees as needed to only some of those who really need it.

Albert Darnell Anderson

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The TED Blog shares interesting news about TED, TED Talks video, the TED Prize and more.

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