Peter Espeut | Are the give-away goodies enough?

Well, one thing we can take away from the Jamaica Labour Party (JLP) annual conference last weekend is that there won’t be any general election in Jamaica until some months into the next financial year (which begins in April 2025). The money that the government can spend over the next four months is already allocated in the approved national budget, and there is very little slack.

Former People’s National Party (PNP) Finance Minister Omar Davies has made an unforgettable contribution to the national political lexicon when just before a general election he proclaimed a “run-wid-it” budget, meaning that fiscal caution was thrown to the wind and irresponsible give-away goodies were announced.

This amounts to attempted vote-buying. This should not be necessary if policy prescriptions are good enough and solid enough to earn support. Political parties that seek to buy votes are admitting policy deficiency.

It didn’t work for the PNP, but Minister Omar set a standard. In the absence of a solid growth and human development agenda, the public has come to accept – and expect – that pre-election national budgets will contain ‘nuff give-away goodies; and that these are often announced at the last annual party conferences before an upcoming general election. Many were listening last Sunday with bated breath.

I hope you were listening closely, and that you were able to put two and two together.

The cut in general consumption tax (GCT) on electricity from 15 per cent to seven per cent will take place after the next budget. There is some debate as to who will benefit from this; but one thing is sure: it won’t be felt until May or June 2025, so don’t look for any general election before then.

But we will have to admit that Nigel did one better than Omar. The pre-election give-away goodies the JLP is offering were announced and financed long before the party conference and the pre-election budget exercise to take place next year.

When I heard Guyana’s president Irfaan Ali announce earlier this year that oil-rich Guyana would give a one-off cash grant of Guy$200,000 (about US$950 or J$150,000) to every household across Guyana, I wondered how long it would take for copycat Jamaica to try something similar.

DIDN’T TAKE LONG

It didn’t take long.

The Jamaican government announced a Reverse Income Tax Credit Initiative (RITCI) wherein persons earning J$3 million or less annually, who meet specific criteria, would receive a one-off payment of a more modest J$20,000 (about US$125 or Guy$26,500). This would be financed out of future earnings from the Norman Manley International Airport which really belong to the next three Jamaican governments (until 2036).

According to new Minister of Finance Fayval Williams, as of last Tuesday 290,912 Jamaicans have successfully applied for the J$20,000 under the RITCI, which she said has cost the Government J$5.8 billion.

But at the JLP Annual Conference PM Holness took it further. Last Sunday he announced that the give-away goodies would also be offered to persons who are not registered on PATH, not captured in the tax system through employment, or not currently on Jamaica’s national social pension or NIS system. PM Holness stated:

“These persons would be outside our safety net programmes, 18 years or older, unassisted and unregistered vulnerable population. As citizens, they too should benefit from the giveback. Starting in February, we will open applications which will involve a needs assessment process for a one-off cash grant of $20,000”.

So this latest announced give-out in the new financial year is not a giveback at all, and is not related in any way to income tax; the money will be given away to those assessed by government agents to be in need. I suspect that members of parliament will have a lot to do with who gets what, when and how. Is this another attempt at vote-buying, or what?

And this cash give-away will be financed by what the government calls the ‘securitisation’ of the revenue earned from the Norman Manley International Airport.

PREDICTED

My regular readers will recognise that I predicted that something like this would happen in my column of October 25, 2024 titled ‘Nigel’s Parting Gift’. I then wrote:

“In the months before a general election, governments (read “parties in power”) would love to have billions of dollars of cash in hand to spend to woo voters without printing money (which would increase inflation) or drive up the national debt (which would throw off the debt-to-GDP ratio and make the IMF, the IDB and the World Bank very unhappy).

The Hon Nigel Clarke, outgoing minister of finance – has been able to make some US$480 million (about J$74.4 billion) available to the government to spend NOW without that sum appearing on the books as government debt.

Brilliant!”

So the Holness government still plans to “run-wid-it”, but using funds borrowed from future Jamaican governments – money to be earned between now and 2036.

The PNP won the two by-elections they contested last week Friday. The JLP won the two by-elections uncontested by the PNP. The local government elections last February showed a massive swing to the PNP. The most recent Don Anderson opinion polls indicate that the PNP enjoy a massive lead over the JLP, suggesting a landslide victory in the next general election.

So the real question is: is J$20,000 enough to buy the votes they need to win the general election due next year, even when you add the reduction in GCT on electricity bills? In the absence of policies that produce economic growth, and in the face of obvious negatives like the constitutional power-grab, the proposed capture of church schools, and corruption, are the give-away goodies enough?

Peter Espeut is a sociologist and development scientist. Send feedback to columns@gleanerjm.com