EDITORIAL - Maintain that voice and message, Dr Hutchinson

If the political executives and their administrative bureaucrats have a difficulty embracing the sensible advice of the private sector, of which Mr Joe Matalon complained last week, maybe they will now listen to their own policy adviser.

Hopefully, too, Gladstone Hutchinson had the advantage of freshness and novelty, being new to the job, plus the worsening economic situation in which Jamaica is likely to find itself after the serious damage to the country's infrastructure by last week's rains dumped by Tropical Storm Nicole. The hoped for flat economic performance this year is now likely to head into negative territory, continuing the decline in gross domestic product since the onset of the global crisis in 2008.

As Dr Hutchinson, now three months on the job as director general of the Planning Institute of Jamaica (PIOJ), reminded in his speech to business leaders last week, between October 2008 and April of this year, the economy shed 86,600 jobs. In the previous four years it had created just under 120,000.

Severe problem

Official unemployment is now around 12 per cent, but that, the truth be told, masks a severe problem of marginal employment and under-employment. In the circumstances, the critical priority of the Government must to be to create a business-friendly environment that encourages investment, growth and, critically, job creation.

Dr Hutchinson is clear that an absolutely essential part of this strategy must be the completion of the programme of fiscal consolidation. The Government must, by and large, contain its appetite for debt, so as not to out-compete the private sector for loans. It must, too, create an environment of security if the country is to regain the five to seven per cent of national output forgone each year because of Jamaica's high incidence of violent crime.

However, the new PIOJ boss placed on the table a series of short- and medium-term tactics for winning back the lost jobs and creating new ones, which could have come from the playbook of the Private Sector Organisation of Jamaica (PSOJ).

Tradable tax credits

Among Dr Hutchinson's proposals for the short term to help jump-start job creation are tradable tax credits for start-ups; tax breaks for companies employing new staff; establishing a real estate trust to help drive construction on government-owned lands; setting up business incubator networks; and using money earmarked for spending by parliamentarians to help finance projects in organic and greenhouse farming.

Others, such as his call for a general lowering of tax rates, of a broadening of the base and a simplification of the taxation system have long been on the agenda of the PSOJ and were indeed key recommendations years ago on tax reform headed by Mr Matalon, the current president of the private sector body. Similarly, he is at one with the private-sector on the call for fiscal discipline on the part of the Government.

We also find of interest, Dr Hutchinson's suggestion that parish councils be given latitude to vary property tax and other local rates and charges so as to compete for investments in the regions.

Dr Hutchinson's first major speech as head of the PIOJ sounded a refreshing voice to the bureaucracy, a voice which we hope will last. Maybe Mr Matalon has found a partner in advocacy.

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