Daraine Luton, Staff Reporter

Dr Omar Davies, opposition spokesman on finance, makes his contribution to the 2008-2009 Budget Debate in the House of Representatives yesterday while Wykeham McNeill, opposition spokesman on tourism, looks on. - Rudolph Brown/Chief Photographer

Former finance minister Dr Omar Davies has thumbed his nose at the Jamaica Labour Party's (JLP) first budget in 20 years, claiming in Parliament yesterday that it was not credible.

In his first contribution to the annual Budget Debate in his capacity as opposition spokesman on finance, Davies said the Government had overestimated anticipated revenues and understated costs. He was responding to Finance Minister Audley Shaw's opening presentation on the $489.5-billion budget for fiscal year 2008-2009.

Inflated revenue

"We have an expenditure budget which is ruling out certain basic levels of expenditure which are necessary for the Government to perform," Davies said. "On the other side, we have projections of revenue which are inflated."

According to Davies, the Government's projection of a $44-billion increase through compliance "is not credible ... the 21 per cent growth in PAYE does not make sense ... a growth of 39 per cent in corporate tax collection is not credible, nor is a 29 per cent growth in GCT collection."

Davies described as "unrealistic" the allocation for the operation of the constabulary's fleet of motor vehicles. Some $550 million has been allocated to the force for the operation of the fleet, 10 per cent more than the $500 million allocated last year.

The former finance minister said the increased price of fuel, as well as the general rise in inflation, will bleed this money easily.

"The question you are going to face is how can you use a 10 per cent increase in this sensitive period? Somebody needs to go back in and say this won't work," Davies said.

"The way in which the allocation for this ministry (national security) has been handled is not only bewildering, but is a cause for worry. The devil is in the detail," he said while noting that allocations for the Police Staff College, the Training Branch and the Police Academy have been slashed.

Davies also charged that the $14.5 billion set aside to pay public sector wages, after a third memorandum of understanding is signed with trade unions, is not enough. He said $20 billion is a more realistic figure.

Meanwhile, Davies said Shaw escaped passing on a massive tax package to Jamaicans by not keeping pre-election commitments.

"If he had kept these commitments, he would have been seeking to obtain an additional $25 billion in taxes to meet expenditure requirements," Davies said.

"He has escaped this because the commitments solemnly given in this House have been broken.".

Shaw had announced $5.4 billion in new tax measures to assist in funding this year's Budget.

daraine.luton@gleanerjm.com