Missed Mark

Golding says Govt's 'no new taxes' measure three budgets late

By Balford Henry Senior staff reporter balfordh@jamaicaobserver.com

Wednesday, March 14, 2018

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Mark Golding yesterday suggested that the Government's no new taxes announcement is “three budgets late”.

Responding to Finance Minister Audley Shaw's budget announcement last Thursday in the House of Representatives that there would be “no new taxes” in the 2018/19 budget, Golding contended that without the 2016/17 increase in the personal income tax threshold to $1.5 million there would have been no need for tax measures in 2016/17 and 2017/18.

Making his maiden budget presentation in the House of Representatives as the Opposition spokesman on finance, Golding said that the previous People's National Party Government was on a trajectory to arrive at no new taxes from 2016 when it lost office.

“The reason why you had to introduce $13 billion of new taxes in 2016 was to pay for your '1.5'. Otherwise, there would have been no new taxes in 2016. (And) The only taxes imposed in 2017 were to pay for the second phase of the '1.5',” he suggested.

“So, Minister, your no new taxes is three budgets late, and your Government is fully responsible for the delay,” the Opposition spokesman insisted.

Golding said there would not have been a need for additional taxes because the previous Administration had “restored the public finances and eliminated the fiscal deficits that were driving the build-up of the national debt”.

He also insisted that more problems would come from the tax policy in the ensuing fiscal year.

“The minister told us last Thursday that tax revenues are $5 billion over target for the current year, and the revenue estimates project that tax revenues for the coming fiscal year will be $40 billion over this fiscal year,” he contended.

Golding also accused the Government of ignoring opportunities for tax relief, since the change from direct to indirect taxation.

“What particularly disappoints us is that, despite all the additional revenue that the tax reforms have been successfully bringing into the Government's coffers, the minister has not chosen to take even a little bit off of the annual $30.902 billion of additional indirect taxes that have hit the wider society, especially the vast majority who never benefited from the '1.5',” Golding said.

“Not even a one per cent off the GCT, Minister?” he asked.

Golding also claimed that pensioners have had to absorb the price increases from the Government's indirect taxation policy without any increase since 2013.

He noted, too, that the National Minimum Wage has not been increased in the two years since the Government took office, despite a promise to increase it.

Golding called for a ZOSO (Zone of Special Operations) on poverty in the country, which should be spread across the country, instead of concentrated in two communities.

Turning to the current public sector pay issue, the Opposition spokesman said that in 2015, under the previous Government, the lowest paid public sector workers were granted an increase of $1,000 per week, which Shaw had described as an insult.

“Now spokesman is minister of finance and is in a position to do better. But what has he done?” Golding said, adding that the public sector workers deserved better.

“They were better off under our Administration. We treated them with respect.

We consulted them in a genuine way and earned their trust. Now they are being insulted,” he stated.

Turning to the issue of the retroactive payments for the 2017/18 fiscal year, which is expected will be paid to all public sector workers by March 31, including some who have not yet signed the contract agreement with the Government, Golding questioned the legal basis for the action.

“These are public funds, and must be used in accordance with the law, and not as a tool to undermine the sanctity of the collective bargaining process,” he said.

He said that the decision to pay the retroactivity, without concluding an agreement with the workers, was “a big disrespect to them and their union representatives”.

He also said that it was a violation of an International Labour Organization Convention of 1949 to which Jamaica is a signatory.

The budget debate will resume on Thursday with the presentation by the leader of the Opposition, Dr Peter Phillips.

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