“WE CANNOT CONTINUE TO LIVE IN A FOOL’S PARADISE,” SAYS FINANCE MINISTER
(JIS)
The total cost of debt servicing (interest and amortization) during 2009/10 is 103
Per cent of the Government’s total revenue and grants, Minister of Finance and the Public Service, Hon. Audley Shaw, told the House of Representatives, Thursday (December 17).
“It is a prescription for persistent poverty and social and economic chaos. We cannot continue to live in a fool’s paradise and believe that we can borrow our way to prosperity. We will have to begin to work our way, to earn our way and pay our way,” Mr. Shaw said.
He was making a presentation to the House on the programme for a Stand-By Arrangement with the International Monetary Fund (IMF), as well as announcing new revenue measures, including a one per cent increase in General Consumption Tax (GCT) due January 1, 2010.
“So burdensome is this debt burden that except for three of the last 10 years, our interest costs and principal repayments have exceeded our total revenues,” Mr. Shaw said.
He added that for the current fiscal year (2009/10), as per the Supplementary Estimates tabled in September, interest costs ($175.2 billion) and principal repayments ($150.2 billion) totalled $325.4 billion, while total revenue was estimated at only $316 billion.
According to Mr. Shaw, “this picture helps graphically to bring the full extent of our fiscal crisis into sharp focus.”
The Minister tabled information showing comparisons between total debt and total revenue between 1990/91 and 2009/10.
The figures showed that in 1990/91, total debt service was $4.8 billion and total revenue $9.6 billion, and that revenue stayed ahead of debt servicing until 1999/2000, when debt service rose to $96 billion and revenue to only $90.8 billion.
Although revenue recovered in 2000/01 to go ahead of debt service charge, $108.4 billion to $104.6 billion, respectively, things went out of whack in 2001/02, when revenue only rose to $109.7 billion while debt servicing rose to $141.9 billion.
“We can see from this information that since 1990/91 there has been a steady growth of borrowing as the method of financing the budget. The result has been no or low growth, with only the debt itself growing exponentially over the years,” the Minister commented.
“The Government’s revenue cannot support our level of indebtedness, so the country has to keep borrowing to repay what has been borrowed and to do what little we can to provide desperately needed services to the people,” he said.
Mr. Shaw noted that in the circumstances, Government’s insatiable appetite for borrowing from the banking system meant that resources that could be going toward financial investment, creating jobs and stimulating growth were captured by government to service debt.
He explained that because of the lack of access to capital markets, triggered by the global financial meltdown, the debt issue has been brought even more sharply into focus.
“It is unsustainable. It is time for corrective action,” Mr. Shaw said. Accordingly, the Government is developing a comprehensive debt management strategy to deal with the issue.
The Minister predicted that with the IMF agreement, Jamaicans will begin to see a country characterized by improved governance to ensure entities do not run up the debt; increased fiscal responsibility supported by law; industrialization, and an emphasis on export production.
“We will see the emergence of a culture of production and productivity, with increased training and certification of our workforce; we will see lower energy costs and increased levels of international competitiveness,” he predicted.
The Finance Minister also projected greater levels of tax compliance, scaled down public sector entities, a leaner and more efficient public sector ensuring higher standards and greater service delivery.
“We will see lower interest costs and consequently more resources to provide for the health, education and security sectors; we will see welfare to work programmes as part of our social safety net; we will see lower commercial bank lending rates and more initiative and enterprise at the workplace,” Mr. Shaw said.
RE: THE TRUTH FROM OUR LEADERS
It’s a well known fact around the world that, 2009, has been a year of challenges for almost every single country around the world. It will take “LEADERSHIP” on the part of all, government and its citizens alike to weather the storms of this recession and bounce back from the devastation caused by the greed of men. It has always been man’s inability to step back and reassess his actions at the critical moments in time, which has cause the world on several occasions to plunge into chaos.
One of the many signs of a good leader, is the willingness to listen and to make changes to his or her stated public position, even though, it might make him or her unpopular. This is not about a popularity contest or to become famous. Solomon of the bible got to be the wisest man, because he asked for wisdom to lead and it was given to him. Leaders ask for help…our country is populated by so many brilliant minds.
What, Jamaica need at this time, is NOT “brink-man-ship”, but LEADERSHIP, of a different kind. The “one-up-man-ship”, will not help the people, you (politicians) swear to serve. Tell them the truth no matter which side of parliament you sit.
I am Jamaican by birth but currently living outside of the country. Thousands of people have lost their jobs around the world and it’s not because of what the current govt did or did not do but the accumulated failures of the past and present governments along with a few short sighted business leaders. The leaders in public office need to tell the people the truth let them know, tough times are here and no one party has the solution. The problems of today calls for a multi party bi-partisan and not a bias one-sided opportunistic approach. Good health care,welfare programs, roads, schools etc does not appear out of thin air, the money to fund them comes from sensible tax programs. Leaders be fair and true to the people and they will be fair to you.
For heaven’s sake, leaders wake-up and lead, in the years to come its evident there will be more hardships and challenges. The people need to be “pitted” to seek “work-a-rounds” and solutions tailored for JA and not against each other. What good can come from a public protest, bearing in mind how, we Jamaicans can behave in these critical moments of frustration. We do not need a one at this time, what we need is reconciliation between the leadership of the parties and a working together for the country’s improvement.
The era of using people and coercing them with lies into the streets for party ideals should stop. This only breathes malice and contempt which manifest into the destruction of life and property.
Please politicians engage each other and the people in debate to seek a way forward not backward to the era of “nuh pull mi tongue” and “lok duh the contry tighter than a sardine”…..I beg yuh.
What we really need now is sound leadership stained with character, grit, fortitude, love, compassion, just to name a few qualities, our leaders need to embrace. Stop the hypocrisy that is so prevalent and begin to incite the people to be true to themselves. Inspire them with words of unity, love and respect for his fellowman.
Jamaica, is not the only country going through hardship at this time, many countries are facing deficits of monster proportions, which will take years to eliminate. The reality is that Governments left or right, PNP or JLP, democratic or republican, will have to make some hard choices. Let’s engage the fine minds we have in the country regardless of stripe or ideology debate the issues and come to a consensus on the way forward in the peoples favour.
Perhaps, I am an idealist or just naive to want or wish for unity at a critical time in history. Is it possible for our leaders to put aside party politics and work for the betterment of the people they vow to serve, is that too much to ask.
I am sick and tire and tire of being sick ……of the leadership vacuum
–Carlton
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