THE EDITOR, Sir:NO BUDGET by any Minister of Finance is ever going to satisfy everybody.
When over 70 per cent of that budget has to be committed to debt servicing, the remainder must reflect inadequate resources for proper funding of many things.
The cry for greater expenditure in several areas is understandable in the context of what is desirable to stop the decline or improve conditions in those areas, but big spending cannot be entertained if a balanced budget is to be achieved and an untenable situation of high debt is to be reversed. The need for a balanced budget at this time is not only good sense, it is a necessity.
So with balancing of the budget being the prime objective of this year's exercise, it is a matter of how to close the existing deficit between revenue income and expenditure. The options are very clear, either to increase taxes or cut expenditure or a combination of both.
If one is of the view that the proportion of tax paid in the society is already very high, then one would shy away from increasing taxes. This option clearly carried with it
possibilities of severe contraction in government spending and the social and economic fallouts which accompany it.
The decision to seek $9 billion in taxes could be the sort of bare minimum which the Finance Minister thinks is required to allow for the continuation of some existing
programmes and the initiation of other growth stimulating ones.
In taking that option, there is a distinct risk that the feeling or reality of over-taxation could have a negative impact on production. I am amongst those who would reduce the tax hike and spend less correspondingly.
UNREALISTIC
In the context of Jamaica's debt position, those who are demanding increased
expenditure and expecting a balanced budget at the same time are being unrealistic.
They confirm the feeling in some quarters that power seekers can be very irrational. Quite often, positions are taken based on what is perceived to be popular rather than what is prudent.
Everyone must realise that we cannot
borrow and not expect to repay the lenders. The way out of the debt trap, in which we are currently, begins with a balanced budget.
The way out is neither going to be short nor easy. We cannot tax our way out; we must grow our way out. We must increase efficiency in all areas of the economy and governance.
We must resolve that from this day on, loans must be for projects that increase our productive capacity or its efficiency. That way, they would not be burdens. Instead they would be enhancers.
Irresponsible promises and inflammatory rhetoric are the greatest deterrents to the development of a vibrant national spirit of co-operation. They are parents of the very debilitating characteristics of frustration and unrealistic expectations.
I am, etc.,
LUCIUS C. WHITE
1 Tankerville Avenue
Kingston 6
