There is no question that Prime Minister Golding and his Jamaica Labour Party came to bat on a rather sticky wicket, although much of it was of their own making.There is no disputing, however, that the global economic situation is far from pretty. Yet, the administration, confronted by runaway crime and other social problems, while overseeing an economy that has, over a long period, returned only parsimonious growth, cannot merely plead force majeure. The Government has to find ways to help stimulate the private sector to create jobs.
The administration has promised tax reform on the basis of the Matalon Report, but says that before it gets around the complex bit of adjusting taxation rates it is first fixing the administrative stuff. It was to end corruption and evasion and lessen the leakage from the national treasury.
We, nonetheless, believe that even as the Government generally follows this track, there are things that can be done now that will help to stimulate the economy and encourage the creation of jobs, without any impact on the fiscal accounts. More than a year ago, in these columns, we recommended one to the former administration: end the contribution by firms to the National Housing Trust (NHT).
The primary role of that organisation is to provide mortgages to Jamaican workers, although in recent years it has ventured into what many would consider outside its mandate of helping the development of shelter. The NHT has a strong cash flow in the form of a payroll tax of five per cent: two per cent from workers and three per cent from employers.
Contribution
Employees get back their contribution after seven years, with interest. Employers never get back theirs. Last year, the NHT took about $5 billion off firms.
On its historic performance, the NHT will never be able, or not for a very long time, to convert its flows into mortgages and developments. Indeed, the trust has a goodly chunk of its assets in investment instruments.
It would make sense if the Government allowed firms to keep their cash, which would be ploughed back into the business. Investments usually lead to growth and jobs. The Government might fear that the 'savings' would be distributed, but even so, that would drive consumption and 'new' investment, with the same result: job creation.
The next best scenario, rather than allowing the NHT to sit on this cash, is to have it go to the general revenue to fund specific areas of national development.
Norman Rae
Norman Rae, as was proclaimed by the journalist John Maxwell, was indeed a "renaissance man", who was content to be Jamaican, but was not contained by Jamaica. He embodied the world.
Rae was a theatre impresario, an actor, a writer and critic - all of which he did with great style and high skill. So, it is easy to forget, and overlook, that he was also in business - as an executive of the Banana Board and as Jamaica's trade commissioner in London. Roles that he also handled well, proving, in these times when too many people are wont to dismiss the value of art in development, the worth of the creative imagination and capacity to co-exist in the same space as hard economics.
And as a society, as embodied by Norman Rae, who died on Friday, aged 76, we are the better for it.
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