Levy criticises Budget treatment of energy, border tax plan
Published:Sunday | May 15, 2011 | 12:00 AM
Businessman Christopher Levy has blasted the Government for not sufficiently addressing the issue of energy in the Budget presentations over the past two weeks.
"We can no longer opine about it, we have to address it," said Levy, the president of Jamaica Broilers Group.
"From a national perspective, you have to address it; as a people we have to address it. I don't think there is a more pressing issue right now," he said.
Levy spoke as a panellist at the Jamaica Chamber of Commerce post-Budget forum in Kingston on Friday.
With rising oil prices that hit US$113 per barrel before falling back to about US$100, Jamaicans have been facing higher gas and electricity prices, and it has become more costly for companies to produce.
Preliminary data obtained from the Ministry of Mining and Energy website indicate that the country imported over 21 million barrels of oil valued at approximately US$1.6 billion at the end of 2010.
At the same time, Jamaica's total alternative energy consumption was reported at 816 equivalent barrels of oil.
Approximately 93 per cent of Jamaica's electricity is generated mostly from petroleum. Another four per cent is obtained from wind, and three per cent from hydro sources.
Despite the crafting of policy to incorporate more renewable energy in the mix, Jamaica has made no substantial headway in reducing its dependence on foreign oil.
Levy's company is among alternative energy investors of fuel-grade ethanol.
The businessman said government's lack of action on alternatives is costing the country.
"The issue that we face in energy is real. It makes our businesses uncompetitive, our lives uncompetitive, and the challenge that we face as a nation is not that difficult to solve," said Levy.
"Many countries around the world have addressed this issue. No developed country runs on heavy oil, or produces electricity on heavy oil. They all run on coal, nuclear, natural gas, or some other geological advantage that they might have," he said.
Minister of Finance Audley Shaw, in his opening Budget presentation, alluded to the high cost of electricity, the need to conserve and accelerate the energy-diversification programme, and the need to embrace cheaper energy sources.
Technical assistance
He announced that Jamaica had entered into a technical-assistance agreement with the Inter-American Development Bank to identify and address energy efficiency in the public sector, and the Government is scheduled to sign a J$1.3 billion (US$15 million) loan agreement with the World Bank to finance an energy security and efficiency-enhancement project.
Prime Minister Bruce Golding did not address the issue.
Levy on Friday also registered his grouse with the Green Paper on tax reform tabled in Parliament.
Drawing attention to Haiti, Levy said that proposals such as the reduction in the common external tariff and the implementation of Customs administration fees at the ports would lead to a destruction of the agriculture sector, which needs to be protected.
"Haiti had a vibrant agriculture industry and was self-sufficient in rice. In around 1986-87 when duties were reduced to 20 per cent across the board, within two years, the agriculture industry ended. It's a challenge, but we have the responsibility to protect and defend our industries," said Levy.
"It is very important for us to recognise that as a nation, the consequences of us taking decisions and not taking decisions have long-term effects. We have not taken decisions regarding energy and we are paying for it now. It makes us uncompetitive as a nation," he said.