ON TUESDAY night, I sat and watched another senseless parliamentary sitting with much disappointment. I listened to the Government again put in place increased taxes. What have we learnt from the last Budget? Increased taxes equals reduction in consumer spending. This eventually equals less revenue for the Government. So, what is going to be different this time? What about an increase in productivity? What about reducing the size of government now?

Rebuild savings, clear debt

Jamaica's economic vitality will never be restored until we rebuild our savings and pay our debts. To build back up, we must change the pattern of capital flows from the fake economy. It is a painful process, but one that will leave our economy on a stronger foundation. I have heard many talks of this, however, to date no plan of action. Jamaica will not accomplish this unless we live within our means. Though this may be problematic for retailers, it is beneficial to the overall economy.

We must dismantle a significant portion of our government, repealing countless unnecessary regulations, significantly lowering and simplifying taxes and reinstituting sound money. If we accomplish these tasks, conditions will be ripe for a lasting recovery. However, if we neglect these reforms and, instead, continue on our present course of more government, more borrowing and less savings, more spending and less production, then our standard of living is doomed to fall.

Restore competitiveness

The right way is to restore competitiveness through dimi-nished government spending, deregulation, lower taxes and higher savings. Higher savings will facilitate capital formation, and lower taxes and fewer regulations will allow that capital to improve the competitiveness of Jamaican labour. Improved productivity and capital investment will translate into higher real wages and pave the way to higher future living standards.

Alternatively, if we don't rebalance our economy on these terms, our foreign creditors will do it for us - and they may have no compunction about imposing harsh measures. The choice is simple - either we shrink government and enjoy higher wages, or grow government and accept lower wages.

I am, etc.,

KAREY ROWE

kareyrowe@hotmail.com