EDITORIAL - Living within our means - the lesson of old

Sketching a case for his economic policy aimed at moving public finances from its current unsustainable path, Finance Minister Dr Peter Phillips has suggested that "living within our means" is the way to correct the fiscal recklessness of the past.

Indeed, fiscal responsibility is important in creating a healthy, prosperous nation. Sadly, if we were to revisit the ignominious past, we would appropriately lay the blame at the feet of our governments for the economic abyss in which we now find ourselves.

Successive governments have not been fiscally responsible. They have been guilty of spending indiscriminately and borrowing relentlessly, smug in the knowledge that the debt is being guaranteed by taxpayers and that the next generation would pick up the tab.

The country's history is replete with examples of partisan decisions that have dictated how, when and where government funds are spent. Often, these decisions were not taken in the interest of Jamaica, but for the benefit of the party in power with an eye trained on the next general election.

When you add to that weak public-sector expenditure controls, deferred financing and ineffective tax administration, bloated Government, waste, corruption and inept real estate decisions, the impact has been tremendous. Budget deficits of yesterday have come back to haunt us today. And we continue to borrow with more dire prospects for tomorrow's children.

COMMITMENT TO RESTRUCTURING

So it is heartening to hear a member of Government urging fiscal responsibility and talking about fixing the underlying problems in the economy. However, we must caution that "living within our means" will not be achieved by just wishing it to happen. Dr Phillips and his colleagues must demonstrate by their actions that they are committed to fiscal restructuring that will lead to the desired objective.

It is imperative that there are new initiatives on the Government side to demonstrate how it intends to eliminate public-sector waste, for example. Belt-tightening cannot be expected of the people without commensurate action by the Government. The job of repairing public finances demands that everyone shares in the pain and sacrifice.

Would the Government then consider it an act of sharing the pain by reducing the size of its Cabinet, especially by disposing of the chaff? Could there be fewer costly consultants, particularly those failed politicians who have found key employment in the public sector?

As we await the new Budget, some people are nervous that any economic recovery will be made on the backs of the already overtaxed citizens, including public-sector workers who were convinced to hold strain in their wage negotiations in the national interest.

Dr Phillip's belt-tightening approach to budgeting should mean that more money will be spent to encourage productivity and to promote economic activity in the private sector where wealth is usually created. It is not possible to achieve economic recovery without producing goods and services so that we can earn more foreign exchange to dig our way out of the fiscal chasm.

Clearly, our politicians have forgotten the tried and true examples of our forbears who believed that it was not how much you earned, but how much you saved that guaranteed the success of hard-working, productive persons.

Simply put, if Government had applied sound household economics to running the finances of Jamaica, we would never have gone on a borrowing binge with the result that we now find ourselves in a depressingly indebted situation.

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