‘Cushion the crisis’

People’s National Party President Mark Golding has chided the Government for its non-response to the Opposition’s proposals to cushion the effects of the cost-of-living crisis on the most vulnerable citizens.

“The world is going through a wicked cost-of-living crisis. We have not seen anything like this in decades. Many people are hungry, many people are not getting the right nutrition, many people are struggling to survive this crisis, and I say to the Government, ‘Cushion the crisis’,” Golding said at a People’s National Party Youth Organisation (PNPYO) national council meeting at the G.C. Foster Sports College in Spanish Town, St Catherine, on Sunday.

“And I told them how to do it. I said slow the pace of fiscal consolidation, slow the pace of debt reduction – many countries are doing it – and use those resources to help the people who are most vulnerable and feeling the pinch,” Golding asserted.

Golding said that the Government was yet to respond to written proposals he personally delivered to the Ministry of Finance on how to cap the ad valorem tax on oil prices under the Provisional Collection of Tax Act, suggesting that the limit be placed at US$67.50 per barrel.

“Up to now, we nuh hear peep from them,” he said of the proposals handed to the financial secretary in May.

Days after submitting the proposal, Prime Minister Andrew Holness had noted that any rollback would affect revenue targets.

“The Opposition is free to talk and make suggestions, and if the suggestions make sense, we will look at them. We have been studying it, and for every reduction in taxation, there is a cost that is going to be borne by somebody else in society,” Holness said.

Economist Peter John Gordon said that Golding’s proposals would be a trade-off that still has the agreed gross domestic product (GDP) in mind, but it will not be achieved in the short term.

“So, Mr Golding is making the assessment that in a larger scale of things, he wants to provide some relief and the price of providing that relief is to slow down the rate of fiscal consolidation that will have long-term effects on debt-to-GDP ratio,” said Gordon.

He argued that whether this is bad or a good thing depends on the weight that the respective sides put on the two different objectives, which is mostly a political decision.

“If you think that consolidation is the most important thing, then you would say to Mr Golding, ‘Sorry, we have to get there in the shortest possible time’, but if the plight of the vulnerable is, then the argument for a delay in fiscal consolidation can be made,” the economist added.

The PNP president concluded that none of the objectives are unimportant, but they all depend on the rate at which one is made a trade-off for the other.

Golding argued that when the crisis has abated, the island could continue along the path to debt reduction until the target of 60 per cent of GDP is achieved.

He urged the PNPYO to present a progressive agenda, which should include a series of policies and programmes to empower the youth.

ruddy.mathison@gleanerjm.com