- RUDOLPH BROWN/CHIEF PHOTOGRAPHER
Prime Minister Portia Simpson Miller makes her contribution to the 2006/07 Budget presentation at Gordon House on Tuesday, May 9.
Gareth Manning, Gleaner Writer
ANALYSTS SAY the economic strategies presented by Prime Minister Portia Simpson Miller in her Budget presentation in Parliament last Tuesday lacked substance.
Mrs. Simpson Miller rolled out a number of benefits that are to be implemented this year, including housing for tourism and sugar workers as well as benefits for poor, indigent and senior citizens. She also outlined a plan to use $1 billion from the National Insurance Fund for loan subsidies to micro businesses.
Mrs. Simpson Miller also pledged to increase community involvement in the economic process through urban renewal projects. Her plan is expected to create more jobs for women.
Below are reactions from analysts.
JOHN JACKSON, FINANCIAL ANALYST:Using NHT and NIS funds.
"Having heard what she said, I'm even more convinced now than ever before that the NHT should be privatised. I agree with Dr. Davies it has enough resources to be independent. It should be privatised, the contributors should get shares in it and it should become like any other mortgage entity. The society must demand divestment of it (the NHT). It is not Government's money and once it remains that way, Government is going to be inclined to raid it from time to time. So I don't support her views on it.
"NIS is even more so because NIS is the national pension scheme. There is no good reason to take NIS money and subsidise lending when in fact what she should be doing is ensuring that the NIS can actually generate more and therefore pay the contributors more. NIS is one of those things that should be put in a totally independent fund and made a private pension scheme like any other pension scheme in the country.
So I give her zero marks for those ideas. In fact I give her negative marks."
HER BOTTOM-UP APPROACH TO ECONOMIC DEVELOPMENT:
"My philosophy has always been: So government was put in place to run the country and, yes, sometimes you have to consult with the people, but I don't think that's the way to run a country. It is another form of running the government by committee. We have parish councils which ought to know better or what needs to be done, but the whole parish council system has not been a resounding success at all. I hear her and I would want to hope she gets some benefit out of it but I don't hold out any great hopes that anything phenomenal is going to come out of that one."
THE PRIME MINISTER'S PRESENTATION AS A WHOLE:
"The presentation lacked cohesiveness, lacked the focus of where we are and where we need to get to and the time frame in which we need to get there and how we are going to get there. The fundamental weaknesses with the economy have not been addressed and she has not articulated as leader of the country how and when are we going to move out of the trap that we find ourselves in. She spent too much time [establishing] herself as the first woman rather dealing with the core issues that the society needs."
MARC JACKSON, LECTURER, FACULTY OF BUSINESS AND MANAGEMENT, UTECHOn Using NHT and NIS funds.
"Should poor people suffer when the NIF and NHT have surplus funds? This is the ethical dilemma raised by the PM's decision to use segregated funds dedicated to housing and social security for other purposes. The words 'fund' and 'trust' have special meaning in financial circles and the fiduciary responsibility for managing these funds can't be arbitrarily administered.
"Does the PM regard the empowerment of the poor and dispossessed as a higher priority than honouring the trust deeds of the NIF and NHT? Clearly not. We must be serious about "giving the people a chance".
"Previously, the parish councils were responsible for indigent housing, now it's made the responsibility of NHT contributors.
"The $5 billion, previously transferred to the education transformation fund, is clearly an allocation to a purpose not intended by the founders of the NHT.
"What is the education tax being used for? What is the size of the fund? Has it got lost in the Consolidated Fund? These questions need to be answered.
"Withdrawal from the NIF is quite another matter. Employees having struggled over many years to accumulate $42 billion towards their old-age benefits are now being asked to contribute to small and microbusiness development.
"Is this fair, when the maximum pension benefit is a mere $2,700 per week or $140-400 per year? What can this sum do? Why not improve benefits to retirees?
"The handling of these funds is very untidy accounting. Funds earmarked for education are used in the consolidated fund, funds earmarked for housing is transferred to education and now $1 billion NIF is transferred to small and microbusiness transformation. What's next?
"On the other hand it's not a matter of "giving the people a chance," or "the integrity of the fund," or the fact that the PM in a previous capacity can take credit for better investment and growth of the NIF from $1.5 billion in 1989 to $42 billion currently, as Prime Minister Simpson Miller asserts.
"It's a matter of principle. The financing of the country's budget and financial affairs should be a transparent and tidy exercise and not left up to expediency.
"But there is a positive side to this issue. When we factor in the multiplier effect in the economy from having this investment, it will create employment for persons, hence aggregate demand. This may then be the catalyst for growth and expansion in the microsector. And finally, persons may at the end of the day, not be so dependent on a government for supplementing their pensions."
ON HER BOTTOM-UP APPROACH TO ECONOMIC DEVELOPMENT:
"While we may argue over the financing of the budget, there can be little controversy regarding the urgent need to repair the social and economic fabric of the society. Anaemic economic growth, high unemployment, crime and poor performance in the education system are just a few of the symptoms of this malaise.
"The PM has outlined a wide range of programmes aimed at addressing these problems. These measures are necessary, but are they sufficient? Is the imple-mentation timeline for this fiscal year feasible? Are there elements of politicking embedded in some of these programmes? These are questions that we must consider.
THE PRIME MINISTER'S PRESENTATION AS A WHOLE:
"The PM has announced a slew of investment projects aimed at empowering the masses and fulfilling her vision for Jamaica. Forty-two thousand new jobs are expected to be created, and 7,900 houses to be built. These are all noble and desirable goals.
"But are these initiatives sufficient to cause a take-off of development? We doubt that. Further we don't see these programmes being implemented in this fiscal year 2006/07.
"The books are not quite balanced (1.4 per cent budget deficit) and the balancing of lives is some distance down the road.
ERROL GREGORY, ECONOMIST:On Using NHT and NIS funds.
"In a culture of lack of transparency and accountability, it's a dangerous precedence where designated funds for particular purposes can be used for other things. I think it's really sending a wrong signal. Although you understand this attempt to say we are trying to find creative ways of funding, I think we have to balance it against the signal that we are sending to the society that we are establishing principles that you can find your way around them. And I think there are other issues too. To suggest that you have this big surplus of amount in the NIS, though the fund has grown, isn't adequately providing for the needs of its contributors, raises other issues. So I just think that we need to look at that one again.
HER BOTTOM-UP APPROACH TO ECONOMIC DEVELOPMENT:
"That is an area that is still very fuzzy and needs a lot of development. It still sounds like an ideal rather than something if it really works out how the community involvement will be expressed."
THE PRIME MINISTER'S PRESENTATION AS A WHOLE:
"I was disappointed. I started off disappointed with the scant regard to human rights issues. I was expecting that since she had put that on the table in her inaugural presentation that that would be fleshed out some more."
