Minister of Finance and Planning Dr Omar Davies has promised Members of Parliament (MPs) an increase in their 2005/2006 Social and Economic Support (SESP) funding if the revenue flows perform “well” during the year.

The minister made the commitment during his opening of the budget debate last Thursday, and expanded on it during the question and answer session during a press briefing at his office the following morning.

“I know (the SESP) represents a safety valve,” Davies said on Thursday, “especially in relation to projects for young people in the 15-24 year-old age group with no, or low, levels of skill and no job, and often living below the poverty line. And today, I am making the commitment to you that if the revenue flows perform well, we will seek to do some additional allocation.”

However, he warned that the problems being faced by young people could not be solved by stop-gap, short-term measures.

“Are we going to keep giving the ‘one-one’ fish to provide a meal for a person here and there? Or, are we going to provide our young people with the opportunities and facilities to learn to fish and be able to feed himself or herself for a lifetime? At some point we have to choose,” the finance minister said.

At Friday’s briefing, he also reinforced another point he made Thursday, saying, once again, that he had no doubt that the development solution for young people “lies in transforming the education and training systems so that our graduates are equipped for jobs or other income-earning opportunities to lift them out of poverty”.

Davies said Friday that if the government was on target, or slightly ahead, in terms of revenue flows in the first quarter of this financial year, then he would be in a position to look at the SESP figures again.

However, he was not in favour of a social fund, which had been proposed by the Tax Policy Review Committee.

The minister noted that the committee’s proposal to raise the General Consumption Tax (GCT) to 16 per cent, and the elimination of allowances, formed a package which they felt would impact basic food prices, which would be a major setback to the poor. To solve that problem, the committee had proposed the social fund to help families with the lowest income.

The tax committee had calculated the need for a $755-million social fund to absorb the increased tax liability that would be borne by the families with the lowest incomes under the proposed tax reform.

But Davies argued that the social fund would pose its own set of problems, because benefits would have to be based on a means test. There are now similar problems in administering PATH and student loans, he added.

“In private correspondence with Mr Matalon (who chaired the committee), I pointed out to him that (as with) PATH and the Students’ Loan Bureau (SLB), every time you have a means test you have problems,” Davies said. “I don’t know how much time my special assistants spent corresponding with SLB because persons wanted to know why they were excluded, et cetera. And (this problem) would just be a multiplication with a social fund.”

Meanwhile, he conceded that individual MPs – especially back-benchers – have a real concern about being alienated from the actual decisions which are made, even about projects within their own constituency.

“Were I not now a minister, I would have a greater sense of that alienation,” he said. “And so, in response, they feel that the SESP is the only way that they can actually respond to the needs articulated to them by their constituents. So I am sensitive to that.”

There was an uproar in the Standing Finance Committee’s review of the 2005/2006 budget in the House, after Opposition MPs disapproved of the $44-million cut in allocation to the SESP for this year.

MPs were each formerly allocated approximately $5 million to meet local needs in their constituency, until the budget started suffering from severe slashes. In 2004/2005 it was cut to $257 million from $460 million the previous year. This year, the 60 MPs will share just over $210 million.

Under the programme, which proponents say is of considerable benefit to back-benchers, the MPs can apply for funding for projects in their constituencies. The submissions are vetted by the Cabinet Office, prior to approval, and the funds released to the ministry which will undertake the project.