At her ascension to high office a year ago, a constantargument of the handlers and supporters of Prime Minister Portia Simpson Miller was that the budget over which she presided was not her own. It had been crafted under the watch of her predecessor, P.J. Patterson.

Implicit in the argument was that Prime Minister Simpson Miller had been unable to indulge her populist instincts with significant social spending, targeted at the poor. Balancing people's lives while balancing the books is how she likes to put it.

Mrs. Simpson Miller is now a year in office, faces an election by year end and is now presiding over another budget - a $350.4-billion package presented to Parliament last week by Finance Minister Dr. Omar Davies.

As they now are, the budget numbers suggest restraint on the part of the Government; projected spending for 2007/2008 is only two percentage points above the level of the last fiscal year, against inflation that will be closer to seven per cent. In that sense, there will be a real decline in the budget, and even judged against the spending initially projected from 2006/2007, the increase is flat.

While the numbers suggest savings on debt payments, the Government seems set to throw that extra cash at the things that will generate the kinds of short-term jobs and other benefits that politicians like to dole out at election time. So, look for the spending on road repairs and on housing benefits.

Sustainable balancing

We would have preferred if the Prime Minister had sought to go the route most likely to lead to a sustained and sustainable balancing of people's lives, by quickly balancing the budget. As it is, Dr. Davies will run a not insignificant fiscal deficit this year and is some time away from delivering a balanced budget. So, he will have to continue to borrow.

We would perhaps be expecting too much, given her natural political instincts and in an election year, for Mrs. Simpson Miller not to be in tune with a dishing of some pork - it keeps the supporters happy and may entice others to vote for you. Having done otherwise, the public sector deficit, expected to be around four and half per cent of GDP for the fiscal year just ended, could be even higher in 2007/2008.

There will be continued pressure on the Government to borrow with the effect of slowing the pace at which the central bank can lower interest rates. It is indeed noteworthy that despite a fall in interest rates this past fiscal year, the projected interest payments climbed by over $5 billion this fiscal year.

It is perhaps too late to suggest that the administration should change direction in favour of a more fiscally conservative posture, but Prime Minister Simpson Miller still has an opportunity to do things that will really help to balance people's lives.

Her intervention in the Budget Debate should be about things to drive economic growth. For instance, she should lift the tax threshold to the proposed $275,000; equalise personal and corporate income tax at 25 per cent; implement a 10 per cent income for the tourism sector; move government offices to downtown Kingston; aggressively offer incentives for rebuilding the old section of the capital; and, insist on removing the humbug to doing business. She should put Jamaicans to work.

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