Moontown

KINGSTON, Jamaica (JIS) — Prime Minister, Bruce Golding, says the length of time that the negotiations with the International Monetary Fund (IMF) has taken, has nothing to do with the competence of the negotiating team.

“The fact is that the negotiating team is largely the same team that has been interacting with the IMF over many years,” he said, while addressing a special sitting of the House of Representatives on December 17.

Jamaica’s Prime Minister Bruce Golding. JIS Photo
Golding stressed that the length of the discussions was a direct result of the perilous state of Jamaica’s finances and the severe weaknesses in the economy, which have been severely aggravated by the global crisis.

“We have found ourselves in a position where our options are extremely limited, the room to manoeuvre almost non-existent,” he explained.

Pointing out that the global crisis is the worst the world has seen in some 80 years, he noted that it had ravaged advanced developed countries with strong economies.

“They have seen their economies plunge into negative growth, their employment rate achieve levels they have not seen in decades, and they have all seen soaring fiscal deficits,” he said.

Developing countries, particularly those that were fast-growing, such as Mexico, Costa Rica and the Dominican Republic, were “virtually stopped in their tracks,” Golding said, as some 46 such countries had to secure agreements with the IMF. He said Jamaica was not in the category of fast-growing countries as there has been a long period of slow anaemic growth, which saw less than 3 per cent growth in any one year, for 20 years.

“Our expenditure has consistently exceeded our revenue. By September 2007 we had accumulated deficits of more than $250 billion. When you accumulate deficit year after year, all you’re doing is piling it upon your debt and, therefore, you’re impacting your budget, in terms of how much money has to be set aside to service this growing debt,” the Prime Minister outlined.

He pointed out that this accumulation of deficit has continued, as between September 2007 and March 2008, the country accumulated a deficit of $22.5 billion, and for 2008 to 2009 there was an accumulated deficit of $43.2 billion.

“Up to the end of October 2009, because of the significant problems in the economy, the deficit so far has been $75.9 billion. In seven of the last 10 years our debt service cost has exceeded our revenue,” he told the House.

“The chickens have come home to roost. The days of recklessness are over. Is the path going forward going to be easy, is it going to be painless? No. We have had to introduce a tax package. I want to acknowledge the pain and hardship that this is going to impose, particularly at a time when people are reeling from the effects of the global recession,” Golding said.

He emphasised that the country cannot continue to borrow, as not only would this further cripple the ability to function as a government and as a country, but the funds are simply not available. “We just cannot spend, every year, more than our revenue,” he said.

The Prime Minister explained that apart from cutting expenditure, there is no alternative to raising new taxes, “not unless we are going to start identify which schools we are going to shut down, which hospitals and clinics we are going to close, which social safety net programme we are going to shut down. We are faced with a situation where there is no alternative.”

Golding pointed out that Jamaica is not the only country that has been forced to raise new taxes, highlighting that Spain recently increased its consumption tax from 16 to 18 per cent and had also proposed an increased tax on savings income.

He noted also that the United Kingdom reduced its consumption tax from 17.5 per cent to 15 per cent when the recession peaked, and will be putting it back to 17.5 per cent as of January 1. The top income tax rate has also been increased to 50 per cent.

The Prime Minister said other countries, including Mexico, Argentina, and Grenada have increased consumption taxes on certain items, and that Trinidad is also holding discussions in a bid to increase property taxes.
(Caribnet)

PERTH, Australia (CMC):

West Indies captain Chris Gayle has praised his side’s effort in defeat even as he expressed sadness over losing 0-2 in the three-match Test series against Australia yesterday.

The Australians smothered a threatening bid by West Indies to record an upset win and triumphed by 35 runs on the fifth day of the third and final Test against Australia.

“I’m really happy for the guys and the way they played, but very disappointed as well,” Gayle said moments after the Australians earned a hard-fought victory with a contentious last-wicket decision at the WACA.

“Congrats to Ricky and his team, you guys played better cricket,” Gayle said in the post-match ceremony.

Australia had taken the lead in the series after crushing West Indies - in spite of hundred by debutant Adrian Barath - by an innings and 65 runs in the opening Test in Brisbane and retained the Frank Worrell Trophy following the drawn second Test in Adelaide where West Indies held the upper hand.

Young players Barath, 19, and pacer Kemar Roach, 21, emerged from the series as new, promising talent from West Indies and Gayle, who was the third Test Man of the Match for his terrific first innings hundred (102) here, applauded their contribution to the team.

“I want to commend Adrian Barath on his first hundred, Kemar Roach did really well as well, Kemar was brilliant,” said Gayle, who also copped the Man-of-the Series award.

The big Jamaican also pointed to other positives in the series.

“Ravi Rampaul and Gavin Tonge made their debut and Narsingh Deonarine came into this first Test match on tour and stepped up. These are some positives, but we were up against a good team and at the end of the day they played better cricket,” he said.

Gayle stroked a masterful 165, carrying his bat in the Adelaide Test and expressed joy over his personal accomplishment.

“I’m happy to actually get two centuries. It’s a personal milestone and I (have) always wanted a century against Australia. I’m really happy for that,” he said.

Tailenders Tonge and Roach kept the touring side’s slim hopes of an upset win alive when - chasing a target of 359 - they added 15 runs to the Windies’ overnight 308 for nine; but left-arm seamer Doug Bollinger snatched the vital last wicket when he had Roach caught at the wicket for 17.

Tonge and Roach bravely smashed boundaries but immediately after Roach slashed Bollinger to the point boundary off the second ball of the day’s fourth over, he was given out caught behind off the very next delivery.

Referral period

The batsman challenged the decision and though the TV replays in the referral period suggested there was no edge, umpire Billy Bowden’s original verdict was upheld.

After their massive win against a weak West Indies in the Brisbane first Test, Australia seemed poised for a lopsided series victory, but West Indies rebounded well and the home captain Ricky Ponting acknowledged the Caribbean side’s role in the competitive series.

“We’ve played in two very even Test matches,” said Ponting.

“I think the fans around Australia have seen some very good cricket in the last couple of weeks,” added Ponting, who is nursing an injury to his arm after being struck by a rising delivery from his series nemesis Roach.

Ponting said the injury is improving and he hopes to be fit for their Boxing Day Test match against Pakistan.

West Indies middle-order batsman Brendan Nash plays a shot through the on-side, while Australia’s wicketkeeper Brad Haddin (left) looks on, during his second-innings knock of 65 in the third and final cricket Test at the WACA.

AUSTRALIA 1st Innings 520 for seven decl. (Simon Katich 99, Shane Watson 89, Brad Haddin 88; Narsingh Deonarine 2-74)

WEST INDIES 1st innings 312 (Chris Gayle 102, Travis Dowlin 55; Doug Bollinger 5-70)

AUSTRALIA 2nd innings 150 (Dwayne Bravo 4-42)

WEST INDIES 2nd Innings

(overnight 308 for nine)

C Gayle c wkp Haddin b Watson 21

T Dowlin c Clarke b Bollinger 22

R Sarwan c wkp Haddin b Hauritz 11

N Deonarine b Watson 82

B Nash b Bollinger 65

D Bravo c Hussey b Johnson 1

+D Ramdin b McKay 14

S Benn c sub (TP Doropoulos) b Johnson 33

R Rampaul c McKay b Johnson 10

K Roach c wkp Haddin b Bollinger 17

G Tonge not out 23

Extras (b9, lb9, w1, nb5) 24

TOTAL (all out, 94.3 overs) 323

Fall of wickets: 1-35 (Dowlin, 8.4 overs), 2-52 (Gayle, 14.1), 3-68 (Sarwan, 18), 4-196 (Deonarine, 66.1), 5-197 (Bravo, 67.5), 6-231 (Ramdin, 75.5), 7-245 (Nash, 81), 8-279 (Benn, 85.4), 9-279 (Rampaul, 86), 10-323 (Roach, 94.3 overs).

Bowling: Bollinger 20.3-3-71-3, Johnson 16-5-67-3 (w1, nb1), McKay 14-2-56-1, Watson 14-5-30-2, Hauritz 23-7-61-1 (nb2), North 7-1-20-0.

Result: Australia won by 35 runs.

Series: Australia win three-match series 2-0.

Man-of-the-Match: Chris Gayle.

Man-of-the-Series: Chris Gayle.

Toss: Australia.

Umpires: Billy Bowden, Ian Gould; TV - Assad Rauf.

An unusually animated Peter Bunting, general secretary of the People’s National Party (PNP), says the Opposition will be embarking on a strategic plan not only to protest the proposed $21-billion tax package but to unseat the Government.

Bunting said Jamaicans have not yet come to terms with how the tax plan would impact their lives.

“The PNP must now, of necessity, respond to an obvious call for political action,” Bunting said. He argued that if the PNP did not lead the protests, other persons would.

Bunting was speaking at a special PNP National Executive Council (NEC) meeting at the University of the West Indies yesterday.

Starting today, the PNP said it would be starting a mass education programme as well as stakeholder meetings. He instructed that all constituencies must have emergency meetings by year end and deliver the message that “enough is enough”.

Strong leadership

He, however, cautioned that the party must provide responsible and strong leadership.

“Nothing must be done at any of these protests that should jeopardise the fragile tourism industry and allow the Government to blame us,” Bunting said.

“We are not in this first phase doing any demonstrations that would impede the flow of traffic or prevent people from going about their business. We want no blocking of roads whatsoever,” Bunting said.

“If we are not careful, holding any type of protest across the country, there are those criminal elements who can seize upon the opportunity to hold people hostage and extort money from them, to loot their stores, and if we have this going on a broad basis, there is no way that the police can control it,” Bunting said.

He also told party supporters that the party would hold a “major event” on New Year’s Eve.

“Those of you who are feeling militant must be prepared to mobilise,” Bunting added.

Meanwhile, South Manchester Member of Parliament Michael Peart was the lone dissenting voice yesterday. He advised the party to take to the streets as a last resort, only if further dialogue with the Government did not lead to a tax rollback.

However, members of the party were not in agreement.

“Time for talking done, action time now,” some shouted.

Carol Jackson called for the opposition members of parliament to send a signal to the Government by refusing to sit in Gordon House with them.

daraine.luton@gleanerjm.com

Daraine Luton, Senior Staff Reporter

Reacting to torrents of criticism nationwide and threats of street demonstrations by the Opposition, Prime Minister Bruce Golding yesterday succumbed to pressure over a $21-billion tax package slated to take effect on January 1, 2010.

In a statement from Jamaica House yesterday, Golding said he would reconsider the package which, as it stands, brings the total amount of new taxes announced in three tranches to $47.6 billion this fiscal year.

The statement, which did not give a timetable for the review, came less than two hours after Opposition Leader Portia Simpson Miller charged members of her party to lead national protests unless the taxes are withdrawn.

“I have heard the cry and the appeal of the Jamaican people,” Golding’s statement said.

“It is my intention to re-examine the existing composition of the tax package in order to determine if there are suitable alternatives to finding the $21 billion of revenue required to support the programme negotiated with the IMF (International Monetary Fund), while at the same time reducing the harsh impact on the society, especially the poor and vulnerable, during these very difficult times,” the prime minister added.

Demonstrations still on

But in a swift response last night, Simpson Miller said Golding’s statement was not reassuring, nor would it stop the party from staging non-violent street demonstrations.

Meanwhile, the Opposition has called for the resignation of Audley Shaw as minister of finance. The party said booting Shaw head would rescue the “waning credibility of the Government”.

On the matter of national protests, Simspon Miller said she would not give Golding any time frame in which to withdraw the tax package.

“He should know what he wants. If he wants no action and no protests, he should act quickly,” she told The Gleaner, adding that the prime minister should reconvene Parliament tomorrow to announce a backtrack.

“This release is not going to stop us. It is not about the People’s National Party. It is a national response to a national problem,” Simpson Miller told The Gleaner.

Last Thursday, Finance Minister Audley Shaw announced a $21.8-billion tax package, the third of the fiscal year. The Government announced an expansion of the general consumption tax (GCT) base, which subjected every basic food item, except rice and flour, to taxation.

Increased GCT

The Government also increased the GCT rate from 16.5 per cent to 17.5 per cent and subjected items such as sanitary napkins, and aids for the disabled, to GCT.

The Government has said the effects of the global economic crisis have knocked the wind out of the country’s sails. Shaw told Parliament last week that there was a need to cut the Budget deficit, rein in spending and increase revenue.

Dr Omar Davies hammers the JLP for its handling of the economy at yesterday’s meeting.

Dr Omar Davies, the opposition spokesman on finance, said that if the tax on the interest of government bonds was increased from 25 per cent to 33.3 per cent, it would have raised $5 billion in the last seven months.

Simpson Miller had rallied the troops of the party to an emergency National Executive Council meeting yesterday at the University of the West Indies.

“Go forth, Comrades, with discipline. Await the instructions for the various protests across this country against this cruel and wicked taxation package,” Simpson Miller bellowed.

Commendation

Meanwhile, in a press release that was issued just minutes after Jamaica House sent out a statement, Generation 2000 (G2K), the young professionals’ affiliate of the ruling Jamaica Labour Party, commended the Government for its intention to re-examine the tax plan.

“There is no doubt whatsoever that the tax package is harsh and will impose, in the short term, even more challenges for the Jamaican people,” G2K said.

But the People’s National Party Youth Organisation (PNPYO), which plans to march to Jamaica House today, suggested that the prime minister’s tax strategy was ill-thought.

“It is unfortunate that the prime minister did not review this tax package before he brought it forward to the people. It shows that he is not only ill-prepared and uninformed but is truly inconsiderate,” Damion Crawford, the PNPYO president, told The Gleaner yesterday.

daraine.luton@gleanerjm.com

by STACEY RUSSELL

URGENT DOMESTIC LAW is needed to bar Europeans in the construction sector from benefiting from government procurement in the region through the Economic Partnership Agreement (EPA) between CARIFORUM and the European Union (EU).

Speaking at a forum organised by CaribInvest (West Indies) Ltd at the PomMarine Hotel, Hastings, Christ Church, last week, Veniana Qalo, economic adviser at the Commonwealth Secretariat in London, explained that the EPA had provisions for Europeans in construction to set up companies and provide services related to general construction for hotels, restaurants, long-distance pipelines, power lines, mining and manufacturing, among others.

“There is an inter-linkage between this commitment and the commitment on government procurement where reservations, [such as visa requirements] that are made by national governments or locally established companies to bid for public procurement service, might be affected.

Laws must differ

“The European Union as well as the United States and Japan have had an interest for a long time to access government procurement in developing countries, an area in which they have a comparative advantage.

“If domestic legislation does not differentiate between domestic and international companies that are established in the region, there is a potential for the EU to utilise this as a means of accessing the market,” Qalo said.

“The Caribbean needs to be very concerned in this [government procurement] area . . . particularly in countries like Trinidad and Tobago, where the public sector purchases quite a lot of goods and services.

Benefit on EU side

“If there was increased market access, the benefit would largely be on the EU side, given the relative sophistication and development of the suppliers of goods and services on the European side,” added Edwin Laurent, a Commonwealth Secretariat adviser and section head in the International Trade and Regional Co-operation, Economic Affairs Division.

THESE TOUGH ECONOMIC TIMES are as good a period as any to start giving workers a share in the business.

Head of the Barbados Workers’ Union (BWU), Sir Roy Trotman, made this assertion yesterday, addressing a luncheon for 300 mainly retired unionists at BWU headquarters in Harmony Hall, St Michael.

“Share the ownership of the companies with the workers,” the veteran union chief urged employers.

According to the BWU General Secretary, this was one way of giving workers a sense of belonging to the company, of helping to build “the national welfare” and setting the platform for the business to take off once the economy recovers.

There was a chance that workers, employers and Government “would have built together so strongly” that Barbados would emerge with a distinct advantage over competitors in areas including tourism and agriculture, he said.

In his brief address, Sir Roy repeated calls to employers to provide some pay adjustments for “vulnerable” workers “at the bottom” of the wages scale.

This was necessary to help them cope with rising prices, he explained.

He sees 2010 as likely to be a period of “tremendous challenges” for Government, employers, workers, the unemployed, and even self-employed people.

“The coming period is one which is going to test our patience, test our capacity to live with one another and test our readiness to continue to build this nation in spite of the difficulties,” he told the gathering.

He said there was one view that in a critical time like this only the working class should make pay and other sacrifices.

However, employers should understand that “we are all in this together and that we can only come out of this crisis by working together”, he remarked.

He said some employers had positively responded to the challenges triggered by the global economic downturn, including the heeding of calls by unions and Government to see job cuts as a last resort.

(TY)