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

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!

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

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.