The upcoming Budget presentation is likely to be one of the most difficult tasks that any administration has faced in recent memory. I am sure no one will begrudge Audley Shaw the job that he has to do.

With the world in the midst of a deep recession that some are now even calling a depression, it is hard to imagine that there will be any good news in the presentation. One can only hope that the good minister will refrain from implementing damaging 'pro-cyclical' fiscal policy.

While the United States and most other developed countries have embarked on expansionary fiscal (counter-cyclical) programmes to boost aggregate demand, our government will find it difficult to explore this option because of our high level of indebtedness and the unsustainability of our fiscal finances, which the International Monetary Fund chief so aptly pointed out. The simplicity of our tax structure has also left us without the protection of automatic fiscal stabilisers. I, however, don't believe that the Government's hands are completely tied.

I would like to make a few suggestions to the finance minister. My first suggestion is for the Government to offer tax breaks to companies which can successfully implement energy-reduction programmes within their organisations. This will serve two purposes: It will create jobs for those involved in the energy and contracting business and hopefully increase aggregate demand through the multiplier effect; and, it will reduce our future demand for oil so that when oil prices eventually start rising again (and rise they will), we will be better prepared to manage our demand. This suggestion is even more relevant in light of the JPS' intention to apply for a rate increase.

Fiscal restraint

The Government should also exercise fiscal restraint; but rather than having mass redundancy in the public sector that some have prescribed, it would be more useful if the Government aimed to reduce those expenditures which have very little impact on aggregate demand. For example, it should aim to relocate some of its ministries from high-priced areas to low-priced ones.

Finally, I would like to suggest that the Ministry of Finance revise its tax structure so that it can act as an automatic stabiliser and provide some level of protection to our economy in the future.

I am, etc.,

CAMILE ROWE

jardon_32@yahoo.com

Mandeville