'Follow through with reforms'

• PSOJ impressed with finance minister's plans
• Urges Shaw to implement revenue changes

WHILE COMMENDING Finance Minister Audley Shaw for the "content and quality" of his Budget presentation last week, a powerful private-sector group wants the Government to aggressively follow through with announced reforms.

The Private Sector Organisation of Jamaica (PSOJ) yesterday indicated that implementation of the reforms is critical if the "hard-fought-for stability" the country now enjoys is to translate into high and sustained levels of economic growth and job creation.

Shaw last week rolled out a revenue package that is aimed at stimulating key sectors of the economy.

In a release yesterday, the PSOJ praised the country's policymakers for achieving relative macroeconomic stability in the context of the severe economic challenges that Jamaica faced at the height of the global recession in 2009.

"The PSOJ continues to be encouraged by exchange-rate stability, historically low interest rates, large reductions in interest costs, and most recently, the Government of Jamaica's (GOJ) ability to achieve its fiscal deficit target," the sector group stated.

In marked contrast to previous Budget exercises, the PSOJ welcomed the level of consultation employed by the Government in crafting the Budget.

"In fact, many of the reforms announced are consistent with proposals previously advocated by the PSOJ and other private-sector associations."

The group mentioned large reductions in stamp duties associated with refinancing loans, the removal of taxes on the trading of corporate securities, and reforms to the tax policies and administrative arrangements governing estates.

big step for businesses

According to the PSOJ, these reforms will reduce the costs of doing business, while simultaneously deepening local capital markets and spurring economic activity, with only a negligible impact on the country's fiscal accounts.

"We would strongly encourage the GOJ to continue this level of dialogue as it seeks to implement the comprehensive reforms to international trade tariffs and general consumption tax to which the minister (Audley Shaw) referred."

Sums set aside in the Budget to cover arrears for some public-sector salaries, outstanding trade liabilities, and refunds of withholding tax did not escape the attention of the PSOJ.

The powerful group said arrears of withholding taxes, primarily owed to pension plans that benefit workers in the private and public sectors, have been a source of grave concern to the organisation for years. The PSOJ said it was pleased that funds had been set aside in the Budget to pay down withholding tax refunds.

"We welcome the minister's stated commitment to the 'implementation of a contributory pension scheme' for the benefit of public-sector workers."

The PSOJ said it had no objection to the administration's plans to extend its agreement with the International Monetary Fund.

Opposition Spokesman on Finance Dr Omar Davies will today make his presentation to the 2011-2012 Budget Debate.