POVERTY QUARREL

Clarke dismisses Golding's claim that Government policy harming the most vulnerable

BY ARTHUR HALL
Editor-at-large
halla@jamaicaobserver.com

Monday, August 05, 2019

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Finance Minister Dr Nigel Clarke has fired back at critics who have been taking the Administration to task since the tabling of a ministry paper in Parliament last week, which showed that the national poverty rate had increased by some two per cent in 2017 when compared to 2016.

Clarke, in a submission to the Jamaica Observer yesterday, argued that while it is correct that the Jamaica Survey of Living Conditions (JSLC) showed a slight uptick in the poverty level, the critics were ignoring the positive trends which it also reports.

“Notwithstanding the increase in the poverty rate in 2017, the data point to a broader declining poverty trend in Jamaica. There may be some ups and downs each year, which are usually driven by some idiosyncratic factors for that particular year. But what we want to see is that the broad direction over time is headed in the right path, and the Jamaican people can rest assured the poverty rate is,” said Clarke.

“The poverty rate for 2017 of 19.3 per cent, though higher than the 17.1 per cent in 2016, was lower than the 21.2 per cent in 2015, and significantly lower than the 2013 poverty rate of 24.6 per cent. This points to a generally declining trend when seen from a broader time perspective,” added Clarke.

He argued that what is striking is the modest decline in rural poverty, which moved from 20.5 per cent in 2016 to 20.1 per cent in 2017 despite the negative agricultural growth of -3.5 per cent in 2017 due to bad floods which impacted crop yields that year.

“Another interesting fact from the 2017 JSLC is that Jamaicans generally perceive themselves to be in good or very good health. That said, about half of the respondents with illness/injury seek treatment in private facilities as opposed to public hospitals, and the trend is rising,” argued Clarke.

He further pointed to an increase in the overall education enrolment rates for the school-age population and argued that this could also impact the modest increase in the poverty level.

“Poverty rates in Jamaica are measured by measuring what is consumed. The lower the consumption, the higher the poverty, and vice versa. As enrolment in education increases, consumption patterns change. As is common knowledge, consumption as a student is typically less than as an income-earner, suggesting its contribution to lower per capita consumption in Kingston and other urban areas which may have contributed to the rise in the measurement of poverty in these areas,” said Clarke.

Following the tabling of the ministry paper, Opposition spokesman on Finance Mark Golding had charged that the increase in the poverty level should be blamed on the policies of the Jamaica Labour Party (JLP) Administration.

“It is shameful that this Government's economic policy is producing greater poverty at a time when the country's economic fundamentals have been improving steadily since 2013,” charged Golding.

“It is clear that the additional indirect taxes of over $30 billion imposed by the JLP Government to pay for their '1.5' election gimmick has worsened poverty in Jamaica. The Opposition warned that this would happen. Low-income wage-earners, unemployed, pensioners and micro business operators, who were already existing on the edge of survival, have been made to bear these additional taxes while receiving no benefit from the election income tax break,” Golding said.

His '1.5' reference was in relation to the Government's increase of the income tax threshold to $1.5-million, which it made while in Opposition in the run-up to the 2016 General Election. The promise, which was heavily criticised by the then ruling People's National Party, appeared to have helped the JLP win the election.

In his critique of the poverty data, Golding said the figures show that by “skewing tax policy sharply towards greater indirect taxation, the JLP Government has perpetrated an act of economic injustice on the people. In a country marked by wide income and wealth inequality like Jamaica, and lacking an inadequate social safety net for the poor and vulnerable, this outcome was entirely predictable”.

But Clarke countered this claim as he argued that social spending, via cash transfers under the Programme of Advancement Through Health and Education (PATH), is continuing apace.

“The current design of PATH, however, targets families with children. We need to expand the coverage to bring older people also under the social safety net. The Government is committed to work on this reform with support from the World Bank, which is currently reviewing the social spending programme in Jamaica,” said Clarke.

He added: “This [Prime Minister Andrew] Holness Administration is motivated by the three-prong vision of protecting the vulnerable, providing economic opportunity for all, and the pursuit of economic independence for Jamaica and Jamaicans that is ushering in a new Jamaica. We will not be deterred nor distracted by politically motivated attacks and short-sighted analysis.”

See the full text of Minister Clarke's statement on Page A15.


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