It is unfortunate that the late release of manifestos by the two major political parties has limited public discourse on the full range of proposals for the country’s future and greater analysis of the Government’s performance over the past nine years.

So far the only issue that has grabbed public attention is the rate of personal income tax. Will voters prefer the proposal by the ruling Jamaica Labour Party (JLP) to move to a 15 per cent base tax rate over time, or will the submission by the Opposition People’s National Party (PNP) to double the threshold to $3.5 million win the day for the PNP as did the $1.5 million for the JLP in the 2016 General Election.

The last fiscal policy paper projected that Jamaica will run a fiscal deficit of between $33 billion and $35 billion in each of the next two fiscal years, or nearly one per cent of gross domestic product (GDP) annually.

Former Economic Programme Oversight Committee (EPOC) head Mr Keith Duncan has projected that every $100,000 change in the threshold will cost roughly $4.5 billion, or around $70 billion. The threshold is actually now roughly $1.8 million, so if one starts from there, rather than the $2 million already targeted, the cost would be $76.5 billion, or significantly more than the $55 billion projected by Mr Julian Robinson, the PNP spokesman on finance. His costing may include the assumption that the tax giveback would generate $5 billion in increased revenues due to higher consumption.

Mr Duncan further observed that, under the JLP’s plan, cutting income tax by 10 percentage points would cost the Government between $28 billion and $44 billion if it was a “one-time” measure. Currently, it appears likely that it would be phased in.

In his original analysis, Mr Robinson argued that over the next few years the forward projections of the fiscal policy paper already forecast a $140-billion increase in revenues without new taxes and that there were also $360 billion in programmes this year from which money could be reallocated.

This prompted the Jamaica Chamber of Commerce (JCC) and other private sector entities to ask both parties what discretionary or capital spending will be reduced, cut, or deferred to fund the proposed income tax benefits?

For example, this year’s capital budget of $62.6 billion. At only two per cent of GDP, this should be regarded as still inadequate to even fully replace the typical wear and tear on our capital stock.

In the leadership debate last Thursday, PNP President Mark Golding appeared to have answered the question — at least as far as his party is concerned — suggesting that the PNP no longer sees a need to reduce our debt-to-GDP beyond the 60 per cent of GDP fiscal rule target.

Jamaica’s debt-to-GDP ratio is now estimated at 62 per cent and not the reputed 68 per cent. So the key question, we reiterate, is whether we should continue to balance the budget with a new goal of a 50 per cent debt-to-GDP ratio as recently suggested by the International Monetary Fund (IMF), thereby also reducing our still-high interest costs as a percentage of GDP, or run a larger than the currently programmed deficit to at least partially finance the tax plans.

And, as we pointed out in this space last Tuesday, we should note that public sector wages are once again half of revenues and approaching peak historic levels as a percentage of GDP. As such, Jamaica’s increased fiscal space to pay for everything else we need has been generated entirely by declining interest costs.

The JLP and PNP can, therefore, no longer escape a view on public sector wage growth if they want to satisfy other urgent needs.

Things get more difficult if one ends the more-than-$11 billion National Housing Trust grant without even considering our recent reliance on selling future revenues from the airports or the role of stock market privatisation in financing the budget overall.

We reiterate that Jamaica’s hard-won fiscal stability must not be jeopardised and, as the JCC and others have noted, citizens deserve to understand how proposed policies will be financed and executed without undermining the country’s economic resilience or risking a reversal of the progress made over the last decade.

Put more starkly, we must avoid the possibility of another debt crisis, and we need to urgently focus on growth over consumption.