April :1.3, 20:1.0 BUDGET DEBATE 2010 PRESENTATION BY OMAR DA - PDF document

BUDGET DEBATE 2010 PRESENTATION BY OMAR DA VIES, MP OPPOSITION SPOKESPERSON ON FINANCE AND PLANNING April :1.3, 20:1.0

BUDGET DEBATE 2010 PRESENTATION BY OMAR DA VIES, MP OPPOSITION SPOKESPERSON ON FINANCE AND PLANNING April :13, 20:10 A: INTRODUCTION :1. I begin this presentation with the usual acknowledgement of the contribution made by various officials, from the different institytions, which have provided us with documentation and data. To be frank we have a specific complaint, to which we will reluctantly return, but we should never 2. underestimate the extent to which our officials put in the time and effort to facilitate our work here in Parliament. 3. I wish to extend special acknowledgment to Financial Secretary, Dr Wesley Hughes and Governor of the Bank of Jamaica, Mr Brian Wynter. Each is relatively new to his respective position, although they are both well-known as public officers - Dr Hughes at JBI, the BOJ and Planning Institute, Mr Wynter at the Bank of Jamaica and as the first Head of the Financial Services Commission. We welcome them and thank them and the members of their team for their efforts. 4. This Budget debate comes at a critical juncture in our country's history for a host of reasons. For one, we are half way through this Administration's term, this represents the third budget being presented by the Minister. By now we should have been able to discern a pattern to the policies and programmes being pursued by this Administration and reflected in the budget. 5. To be frank, this Budget Debate is somewhat anticlimactic, as it revolves around commitments made in the Standby Agreement with the IMF. As such this budget marks our formal reengagement with the International Monetary ~und for the first time in over:15 years. 6. Within that context, although we have long passed the stage of blaming our ills on the IMF, there can be no question that the Standby Agreement represents a far more important set of guidelines for actions on the financial, macro-economic and social fronts than the budget documents themselves. 7. We are also in the first budget following the execution of the Jamaica Debt Exchange (JDX). The Opposition had stated that it supported the exchange, from the perspective of reducing the debt servicing burden of the country. !-lowever, there are several outstanding matters to be addressed. We will be raising some of the implications of the JDX which seemed not to have been taken into consideration when it was conceived and implemented. 8. Finally this is a critical budget debate as it comes at the end of what one could describe as a "tumultuous" fiscal year. It is a year'in which there were several tax packages. In fact, even at the Standing Finance Committee, on the last day of the fiscal year, the Minister revealed another tax increase - this time with regard to property taxes. 9. It is our hope, and indeed the hope of the whole country, that fiscal year 20:10/U will be a less "chaotic'l one. The country needs to settle down and to operate on a more clearly-defined path. The basis for this less "chaotic" path should be laid by the Administration in the Budget Debate. Last year, the exact opposite occurred and already there are worrying signs about this year. :10. My presentation will follow a pattern which I have utilized for many years although there will be some changes. I will, insofar as data are available, examine the past year looking at issues such as the level of economic activity, the fiscal deficit as well as the growth in the country1s indebtedness.

Next I will look at the information provided on the public bodies. This is the first year that we have had an 11. opportunity to view both the operations of Central Government and the public bodies in a comprehensive manner and so I will spefld some time looking at some ofthe more critical ones. I will then look at the Expenditure Budget and there we have had some difficulties - in terms of being able 12. to make meaningful c?mparisons because of the dated nature of the information contained in the document. Then we will look at the financing of the budget. Finally we will consider some of the major macro-economic and social challenges which need to be addressed if we are to move the country out of the present state. 13. As is usual, there will be-three presentations from the Opposition: I speak today and I'll be followed by my colleague, the MP from East Kingston & Port Royal tomorrow. He will address issues ofthe real economy, including energy. The La will speak on Thursday and speak on the social sectors, governance and related issues. Before I close my introductory remarks, I should say something about the demise of an institution, which 14. during its over four decades of existence, has filled the hearts of all Jamaicans at home and abroad with pride. 15. I speak of Air Jamaica. I would be less than honest if I did not acknowledge the factors which caused the Administration to take a definitive decision concerning the airline. We, whilst being Government, faced the same challenges and sought to privatize - or so we thought. 16. This is not the time and place to speak of concerns about how the process is being handled. What I simply wish to do, is to place formally on record, on behalf ofthe Opposition, the appreciation for the service given by both present and former employees of the national airline. , 17. There can be no question that there were times when we were less than pleased with the airline for whatever reason - perhaps, because it was ours, we demanded too much of it. At the same time, there can be no question that at its best, it provided a world class service, better than most and equal to any. 18. As a country we must wonder why it was impossible for a group of local entrepreneurs to respond to the Government's invitation to bid for control of the institution. In our more sober moments this is an issue on which we should reflect. I 19. Suffice to say that the Opposition wishes to formally place on record sincere appreciation to the thousands of employees at all levels, who gave us a sense of pride in our National Airline. B: YEAR IN REVIEW Our attempts to review the year have faced some challenges particularly in terms of the timely availability 20. of data. the worst exa,mple of this was seeking to compare the expenditure outturn for 09/10 with the Estimates tabled for 10/11. Nonetheless, utilizing the data sets which are available, we will seek to look at a set of the major macro-economic indicators including growth, revenues, the fiscal deficit, the growth in debt and within that context, the JDX. 21. As regards economic growth, the Minister has indicated there was a decline of 2.7% in calendar year 2009. The MOF documents projects that for fiscal year 09/10 there will be a negative growth of 3%. This follows Prepared by Dr. Omar Davies - Opposition Spokesperson on Finance and Planning Page 2