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Wehby: Six guiding objectives to fiscal sustainability
Wednesday, May 13, 2009
Senator Don Wehby believes that should the Government and other economic stakeholders follow six fundamental guidelines of a comprehensive reform programme now being implemented, Jamaica will be able to attain fiscal sustainability in the foreseeable future.
Wehby... we can't afford to borrow. (Photo: Garfield Robinson)
"We have developed a comprehensive reform programme," said Wehby, who is minister without portfolio in the Ministry of Finance and the Public Service. "It has six guiding objectives, which will ultimately lead to the goal of fiscal sustainability and debt reduction."
Jamaica is at an economic cross roads and by Wehby's account should the situation in the world get worse there is a real possibility that Jamaica will have to get a stand-by facility with the Internatinal Monetary Fund (IMF) - a move on which economic stakeholders hold mixed views stemming from the conditionalities of the lending programme from the 1980s, popularly known as structural adjustment.
Speaking yesterday at Scotia DBG Investments' breakfast seminar held at the Hilton Hotel in Kingson, Wehby said that "the public sector wage freeze was a really tough decision".
"(But) we have taken too long to make decisions in terms of balancing the budget.. every deficit dollar that we produce we have to borrow," he added. "We can't afford to borrow."
The guiding objectives underlining the reform programme that has been set in motion, entails the controlling public sector balances and debt; rationalising public bodies; improving central government financial management and budget processes (partly via implementing a performance-based budgeting system and prioritising investments); increasing revenue collection (through a comprehensive tax reform agenda which has already started); increasing growth and competitiveness; and managing the public sector wage bill.
The minister without portfolio, who will return to a senior executive role in GraceKennedy within a few months, said that the privatisation of Air Jamaica was proceeding well with too firm offers currently being considered.
But that is only after the ailing airline racked up accummulated deficit of US$1 billion of which US$500 million is currently guaranteed by the government. Another US$135 million he said may have to be taken on as well, in light of payables and other debt that have been accrued.
On tax reform, Wehby noted that the Inter-American Development Bank commissioned a report at the end of 2008, which estimates that:
. one per cent of corporations pay 71 per cent of CIT collected
. one per cent of registered entities accounts of 60 per cent of PAYE collected
. one per cent of corporations pay 58 per cent of the GCT collected.
He also cited Jamaica as being listed amongst the 10 (of 178) economies where it is most difficult to pay one's taxes due to the number of different tax types, payment dates and tax rates, according to a 2008 joint "Paying Taxes" report by the World Bank and PricewaterhouseCoopers
Wednesday, May 13, 2009
Senator Don Wehby believes that should the Government and other economic stakeholders follow six fundamental guidelines of a comprehensive reform programme now being implemented, Jamaica will be able to attain fiscal sustainability in the foreseeable future.
Wehby... we can't afford to borrow. (Photo: Garfield Robinson)
"We have developed a comprehensive reform programme," said Wehby, who is minister without portfolio in the Ministry of Finance and the Public Service. "It has six guiding objectives, which will ultimately lead to the goal of fiscal sustainability and debt reduction."
Jamaica is at an economic cross roads and by Wehby's account should the situation in the world get worse there is a real possibility that Jamaica will have to get a stand-by facility with the Internatinal Monetary Fund (IMF) - a move on which economic stakeholders hold mixed views stemming from the conditionalities of the lending programme from the 1980s, popularly known as structural adjustment.
Speaking yesterday at Scotia DBG Investments' breakfast seminar held at the Hilton Hotel in Kingson, Wehby said that "the public sector wage freeze was a really tough decision".
"(But) we have taken too long to make decisions in terms of balancing the budget.. every deficit dollar that we produce we have to borrow," he added. "We can't afford to borrow."
The guiding objectives underlining the reform programme that has been set in motion, entails the controlling public sector balances and debt; rationalising public bodies; improving central government financial management and budget processes (partly via implementing a performance-based budgeting system and prioritising investments); increasing revenue collection (through a comprehensive tax reform agenda which has already started); increasing growth and competitiveness; and managing the public sector wage bill.
The minister without portfolio, who will return to a senior executive role in GraceKennedy within a few months, said that the privatisation of Air Jamaica was proceeding well with too firm offers currently being considered.
But that is only after the ailing airline racked up accummulated deficit of US$1 billion of which US$500 million is currently guaranteed by the government. Another US$135 million he said may have to be taken on as well, in light of payables and other debt that have been accrued.
On tax reform, Wehby noted that the Inter-American Development Bank commissioned a report at the end of 2008, which estimates that:
. one per cent of corporations pay 71 per cent of CIT collected
. one per cent of registered entities accounts of 60 per cent of PAYE collected
. one per cent of corporations pay 58 per cent of the GCT collected.
He also cited Jamaica as being listed amongst the 10 (of 178) economies where it is most difficult to pay one's taxes due to the number of different tax types, payment dates and tax rates, according to a 2008 joint "Paying Taxes" report by the World Bank and PricewaterhouseCoopers