Promises, principles and performance

Dr Canute Thompson

Saturday, March 18, 2017

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Let us agree that taxes are required to run a country and political parties must make promises when presenting themselves to the electorate. But we can also surely agree that not every form of taxation is justified and that political parties should not engage in the making of wild promises, the keeping of which they know is either harmful to the country or not sustainable.


Despite what the Government may say about having kept the promise of the $1.5-million ‘tax break’, the claims that its pundits and spinners may make about the impact on the economy, and the Government’s late-in-the day assertion that it had signalled its intent to move to indirect taxation, a number of hard facts remain undisputed, namely:


1. The $1.5 million tax break was not on the Jamaica Labour Party’s (JLP) initial election platform.


2. When the plan was announced, the Government repeatedly said the plan would be implemented on April 1, 2016 and that there would be no new taxes to support it.


3. The financial experts in, or supporting, the JLP (Aubyn Hill, Fayval Williams, John Jackson), backed by Audley Shaw and Andrew Holness, insisted that the cost would be about $8 billion. This was later revised to $12 billion. And when Ralston Hyman and then Minister of Finance Peter Phillips said the cost would be in the region of $30 billion, the JLP scoffed at their estimate.


4. The JLP was wrong in its estimate.




The country must not, and perhaps cannot, go to sleep on this — not with the level of taxes that have been imposed on the population. So the key questions are:• When the JLP insisted that it would grant the tax break without imposing new taxes was it lying or was it a case of lack of understanding?


• When the JLP and its surrogates argued that the cost of the tax break would be $8 billion, then $12 billion, was it lying or was it not aware of the quantum of PAYE contribution to the budget?


• When Minister of Finance Audley Shaw promised that the tax break would be retroactive to April 1, 2016 (if implemented later) was he hoodwinking us?




The Government, having come to a realisation that its "no new tax" promise and stated estimates were wrong, should offer an apology. Instead, what the country has been given is bravado and bluster. That is not how leaders who wish to gain and retain the respect of the people behave. That is not how leaders who respect their citizens handle grave communication errors on their part.


Government misled the country concerning how it would finance the tax break, does it hold up this manner of engaging the citizenry as a model, and would it do so again, and would it recommend its approach to future administrations? If the answer is ‘no’ (as any reasonable reader would agree), then the Government owes the country an apology.


The Government must ask whether the decision to increase the tax threshold is really intended to benefit the people or simply to serve its own political agenda. The Government claims that it has fulfilled its promise by raising the threshold. We can forgive the delay from April 2016 to April 2017, but the larger part of the promise was that there would be no increased taxes to finance the raising of the threshold. The Government conveniently omits that part of the promise. Is the omission an honest representation of the whole story?


The Finance Minister now insists that the measure is revenue-neutral, as if to say Government is not taking this money and keeping it, it is giving it back. I find this ‘revenue-neutral’ argument a hoax. All taxes are intended to run the country. Governments do not impose taxes to pocket the money for those who are in power. In that regard, to suggest that because people supposedly get back the money it justifies the tax is illogical. All our taxes are supposed to come back to us in security, health service, education, justice, etc. But the real hoax with this revenue-neutral argument is that it seeks to overlook the fact that many who will pay for this increase in the threshold will not benefit from the increase, and those who benefit from the raising of the threshold will be paying out the full increase, and more, in new taxes.




The raid on the NHT


We now hear the prime minister saying that the National Housing Trust (NHT) is not a housing agency; it is a financial agency. I imagine that soon the Government will be taking money from the NHT to buy cars and do all sorts of other things — since it is a financial agency. One wonders when was the mandate and mission of the NHT changed from that of providing housing to that of being a financial agency.


The PM’s assertions appear to be simply an attempt to justify his Government’s decision to raid the NHT. So the action the PM condemned while in Opposition he is now seeking to justify by articulating a new purpose for the NHT. But the PM must not forget, and the country must not forget that the PM’s earlier principles concerning the NHT were articulated with venom that he decided to take the PNP Government to court over its raid of the NHT.


Serious questions of credibility are raised when leaders advance ‘new principles’ to defend actions that they once condemned. If it is the case, that the PM’s position has evolved — as with the tax threshold increase and no new taxes speeches — he, in exercise of the fundamentals of moral leadership, needs to acknowledge error and rise to the level of ‘bigness’ and apologise for having misled, and clarify that his grasp of the issues back in 2013 was not complete and affirm that the lawsuit was an error of judgement.




Measuring performance


The PM seems to have also discovered something new in relation to job descriptions (JD) for ministers. The PM had promised that every minister would have a JD within the first 100 days. He has now said that focusing attention on JDs will not generate economic growth and so he has not devoted time to that, so he has decided to leave the issue of JDs for a while and promised that all ministers will have JDs in another six months. According to the PM, after 18 months every minister should have a full grasp of his/her portfolio and then at that time JDs would be in order.


In my opinion the PM’s position undercuts any claim of satisfactory performance by the Government. If it will take 18 months for ministers to grasp their portfolios then it means that their performance is at this time below par and, unlike ordinary employees and CEOs, who are given three to six months to prove that they are up to the task, ministers of this Government need three times the maximum.


I found the various assessments of the performance of the Government given by various experts somewhat baffling for the simple reason that no performance targets were set, no JDs exist, and as such there is no reference point against which to measure performance. After the Government’s first 180 days in office I did an assessment based on explicit commitments the Government had made. After one year, the picture is roughly the same as shown in the table.





Dr Canute Thompson is a management consultant and lecturer in educational policy, planning, and leadership at the School of Education, The University of the West Indies. He is also co-founder of the Caribbean Leadership Re-Imagination Initiative and author of three books on leadership. Send comments to the Observer or
canutethompson1@gmail.com.






 

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