Arthur Hall, Senior Staff Reporter

THE JAMAICA Confederation of Trade Unions (JCTU) has given the thumbs-down to the Government's Budget financing package announced last Thursday.

The trade union umbrella organisation has also hinted that it could still be heading for a face-off with the Bruce Golding administration over the decision to freeze public-sector wages.

"The tax measures announced by Finance Minister Audley Shaw (were) regressive and inflationary and likely to have little or no effect in stimulating the economy for the prospect of sustainable growth in the future," the JCTU said in its first official response to the $18 billion tax package.

"The confederation will be studying closer the finance minister's presentation to develop a response to the Government on (its) proposal to freeze the second-year wage increase to public-sector employees agreed on in MOU (Memorandum of Understanding) Three," the JCTU added.

Ripple effect

According to the confederation, the imposition of the gas tax will have a ripple effect throughout the economy and will affect the prices of nearly all goods and services in the short term.

"The impact of this (gas tax) will result in a spiralling of the inflation rate and further hardships on the working poor, the unemployed and pensioners in the society.

"The gas tax will cost motorists an additional $500 to $600 per week. This, compounded with the inflationary effects of the gas tax and the imposition of GCT on a number of items, will certainly worsen the living standards of a significant number of Jamaicans," the JCTU said.

The confederation argued that while the income-tax threshold would be doubled, the full effects of this would only be realised nine months from now, and would only result in additional benefits of approximately $1,200 per week more to the PAYE earners.

However, The Sunday Gleaner's calculations show that taxpayers would get an increase of just over $2,000 from July to December, and almost $4,000 more after the threshold is moved to $440,000 come January 2010.

"The Budget lacks foresight and imagination and is obviously predicated on meeting the shortfall in financing.

"The Government's own projection that the economy will get worse is a belated confession of how bad the impact of the global economic recession will be on the Jamaican economy," the JCTU added.

arthur.hall@gleanerjm.com