PM puts brakes on waivers

Christopher Serju, Gleaner Writer

The manufacturing sector was dealt a blow yesterday with the announcement that the Government will not be granting any new waivers or incentives until the completion of a study to determine which should be abolished or retained.

At least one company, The Gleaner has learned, has taken issue with the decision announced by Prime Minister Bruce Golding at the Denbigh Agricultural and Industrial Show in Clarendon, as the latest measure to plug the country's revenue gap.

"The country is now wrestling with a deficit of about seven to eight per cent GDP, and because of that we have to borrow a whole heap a money ... . The waivers and incentives that we are currently granting amount to 14 per cent of GDP, 14 per cent of our GDP," he told a receptive audience.

Eliminate deficit

He said if the waivers and incentives were to be reduced by 50 per cent, the deficit would be eliminated in one stroke.

"The Government has undertaken, has given a commitment, to conduct a comprehensive review, a re-evaluation of all waivers and incentives, not just in agriculture, right throughout the economy. It is necessary for us to do it ... . We have some incentive programmes in place. We have a tradition of granting waivers for certain things when the circumstances that led to them being introduced in the first place no longer exist," Golding said in justifying the decision taken by Cabinet last Monday.

"We have incentives being provided in sectors and in segments of the economy where the purpose of incentives is to stimulate new investment, new production, new job creation, but they are getting incentives, but no new investment is taking place, again because the assumption on which they were based long ago, or the circumstances have changed. In addition to all of that, there are instances in which incentives and waivers are being downright abused and misused," said Golding.

Golding said the nation must start directing its resources to where they can help the country to grow and that "giving it away in waivers and incentives is not the way in which we intend to spend tax payers' money".

The Government is now recruiting consultants to carry out the study, which is expected to be completed by year end, a process which the prime minister said would involve international procurement procedures. He did not, however, say how much the study was expected to cost.