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Columns
James Moss-Solomon  
June 5, 2012

Budgets, blunders, and bull

Let me begin with the last one, as I heard my friend, eminent lawyer and Queen’s Counsel K D Knight make a really unusual remark on television. This was in regard to his client, the now not so busy ‘Busy Signal’ and the possession of multiple passports.

Senator Knight suggested (I hope frivolously) that this was because he travels regularly and the stamping of his passport uses up the pages. Well, according to the series Oliver at Large, so does Oliver (remember “mi travel regular”).

Well, that comment was not appropriate on the media except on a comedy show, and inadvertently or intentionally seems to defend a position that could and should not be defended by a former minister of security. The stamping of passports of Jamaican citizens entering Jamaica is not called for under the law and may in fact be illegal or unfounded, so that could take care of the busy passport holders if this was observed.

After “pathologically mendacious” and “pack your bags”, I am disappointed with KD. Perhaps we should all pack our bags (that is if we have enough pages left in our passports).

The casual approach to the observance of law accompanied the horrible accident that claimed the life of a young boy in Portmore.

Regrettably, more persons wished to blame the Transport Authority, and few wish to put the blame on the driver who, according to the police, had 85 outstanding violations and was driving a bus with twice the number of authorised passengers. Come on, parents, you need to defend the law, especially when it pertains to our children and public safety.

The Budget was read and I fault the minister of finance for falling prey to the use of words to set up further semantic politics. I refer to the use of the word “covenant” when simple words like vow or promise would have sufficed, but I guess the spin doctors were intent on crafting an opportunity for the prime minister to give some religious fervour to the debate.

Come now, guys, this is clever socialist rhetoric all over again, and none of the present practitioners are as convincing as Michael Manley.

The use of the initial presentation to cause confusion, furore, and paving the path for seeming reason and kindness when certain things are clarified, repealed, or modified, is an extremely worn-out tactical ploy. Today, except for the very naïve few of us who use a wide vocabulary, no one is fooled.

So several areas fall into the mode of creating misunderstanding and setting the stage for seeming amelioration and eventually, political points, and more importantly, to confuse the less educated.

Firstly, the avoidance of the recommendations of the Private Sector Working Group on Tax Reform was carefully handled to paint them as the wicked capitalists who wanted to tax “poor people food” (how boringly 1970s).

Well, no one stated that most of the “poor people food” is imported and patronises foreign workers. The fact that many of these foods may be major contributors to dietary-related illnesses such as hypertension, diabetes, and obesity is totally ignored.

Secondly, the ambiguity of “soft foods” being taxed can only have two possible outcomes. Tax evasion will be more rampant as sellers will stick to the markets and avoid supermarkets and retailers. This will affect those who do not or will not shop in markets. Perhaps there may be fewer places that retail soft food and some will find them more difficult to obtain.

In some cases the demand will be reduced and this will directly affect the local farmers who have specialised in supplying to processors that clean and package for extended life and reduced spoilage and wastage. So there go vegetables and many ground provisions that are really healthy foods.

Thirdly, chicken is exempt, but what about beef, pork, and goat, or are we to forget stew, jerk and curry as part of our variety of meal choices? It seems to me that this one was set up to allow the Jamaica Agricultural Society to make noise, and while quelling that noise the contrived “sympathy” to the farmer will get many votes. However, the true tale does not end there, as other areas of the farm supply chain are also affected.

Fourthly, the GCT increase on electricity will directly affect the working persons who are already dangerously near to the edge. The lower middle income person with a monthly bill of around $11,000 will now be affected, and that means the small working family with kids and a Housing Trust-financed home.

Dear old Granny with her old (inefficient but working) refrigerator, lights, electric iron, and a small water heater (for her arthritis) will be running close to the margin. Thank goodness “Johnny” sends her some money from Brooklyn.

The farmers who have to refrigerate in order to protect against spoilage and use chilled or frozen storage will face increased costs. Think of places like the Christiana Potato Growers Co-Op that need to store crops for some periods; they will certainly pay a lot more for electricity.

The same is true of the supermarkets that have to sell refrigerated items, or the gas stations that will incur more cost; all of these will be passed on to the consumers.

Public and private transportation costs will rise and this will again affect the travelling public, including school children, and the costs of transporting goods via trucks and vans.

The whole situation speaks not only to austerity but a risk of inflation and further unemployment, and this will require a big “Gospel according to Sister P” in her Budget contribution. But perhaps that was the original intention. The only energy-exempt vehicle may well be the “Jeep”.

The next “red herring” is the $60,000, tax on businesses that is meant to create a panic for small business persons. To me, a simple businessman, if you didn’t make $240,000 pre-tax profit, then you would be entitled to a refund or a tax credit to be carried forward. The real purpose of this measure is to ensure that registered businesses do make tax returns annually, so why not just say so?

So the business that makes $100,000 profit pre-tax owes $25,000 corporate tax at the new rate, therefore my question is, how will the Government justify over-taxing them? If the Government insists on the $60,000 then that business would pay corporate tax of 60 per cent. That certainly won’t win more votes!

The additional tax to be levied on incoming calls is certainly an area that may be challenged in the WTO and if sustained will give the option of having sanctions imposed on Jamaica and could be enforceable by the taxing of our exports on their entry to the USA. Therefore this may not affect telephone calls only, but may place the export of goods in jeopardy.

The imposition of taxes cannot be treated in a willy-nilly fashion, especially by a political party so full of lawyers. The expectation of governance that is respectful of the rule of law is necessary. We really need a platform that promotes productivity and self-reliance.

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