Jamaica needs more answers to rebuild confidence — Shaw
Opposition spokesman on Finance, Planning, Growth and Economic Development, Audley Shaw, has warned that unless the government provides Jamaicans with enough information to rebuild confidence in the economy, the country will continue drifting.
"To me, everything continues to be in disarray and, until the government can come out with specific, measurable performance objectives with timelines that can build confidence in the investment community and the consuming public, you are going to see the country drifting, the economy drifting, the NIR declining, the dollar devaluing and prices increasing," Shaw told Caribbean Business Report.
He was responding to the results of the Government's press briefing on Monday at Jamaica House, on the economy and current talks with the International Monetary Fund (IMF) on a new agreement.
Shaw described as "unrealistic" the proposal by Minister of Finance and Planning, Dr Peter Phillips, for additional taxes in 2013/14.
"How do you garner more taxes from an economy that is in a persistently contracting mode. We have not grown for one full year: There have been four consecutive quarters of decline in the economy since this government has been in power," Shaw pointed.
He recalled that in May last year, the government imposed a $23 billion tax package, "the largest tax package ever imposed in Jamaica's history", however, by December it was disclosed that the tax revenues were $10 billion short of target.
"What does that tell us? That in part the tax package did not work. The revenue is not coming in. So to suggest new taxes that are being demanded by the IMF, how realistic will it be that the government will be able to generate the revenue from those increases?" The Opposition spokesman asked.
"That is a question that has to be answered, because what the government has to be careful of is not to be railroaded into an agreement and, at the end of the day, find that the target is unachievable," he added.
Shaw said that the suggestion that closing tax waiver loopholes would impact on the revenues, was a "pipe dream".
He explained that many of the waivers were granted to persons in manufacturing and similar sectors, and if they were not granted, in the first place, the levels of production would not have taken place.
"That is a very, very key point, because you are assuming that when you stop granting the waivers, the people are simply going to go ahead and import the same amount of goods and pay the same amount of duties on them: That is a false assumption," he said.
On the issue of the proposed wage freeze for public sector which, he saw as crucial, Shaw insisted that to have a "fulsome and intelligent discussion and debate" on would require an agreement between the government and the public sector unions.
"There has to be some agreement, or MOU, call it whatever you will; but, here is the spectre of the minister demanding wage freeze, one the one hand, and the teachers and other public sector union, on the other hand, issuing wage and fringe benefit claims, which tells us that there are problems on the industrial front down the line," he noted.