Finance Ministry Determined to be Fiscally Prudent

Finance and the Public Service Minister, Audley Shaw, signalled at the start of the new administration’s term in office, in September, that the Ministry’s focus would be managing the fiscal affairs of the country in a prudent manner.
This, he noted, would be done in a way that prioritised achieving higher levels of economic growth, coupled with a greater level of tax compliance, to ensure that there was adequate revenue to fund essential services. Addressing a capacity audience at the Embassy of Jamaica in Washington, shortly after assuming office, Minister Shaw said: “Without growth, Jamaica simply will not be able to create wealth and to ensure the prosperity of our citizens.” He pointed out that increasing growth was the number one priority and added that without growth, “we will be unable to provide a good education system, invest in health care and assist the development of important productive sectors, such as agriculture.” Highlighting five critical areas on which new emphasis would be placed by the Government, Minister Shaw identified debt management, a revised energy policy, reform of the bureaucracy, tax reform and investment promotion. These areas, he explained, would be the focal points to ensure the financial stability of the country and increase its efficiency and competitiveness.
Calling on Jamaicans in the Diaspora to play their part in national development, Minister Without Portfolio in the Ministry, Senator Don Wehby, said that forging a new partnership between the government and Jamaicans at home and abroad was central in ensuring social and economic progress. He was also addressing the meeting in Washington, which attracted members of the international financial community, as well as private investment interests in the United States. “There are no quick fixes to the economic challenges facing Jamaica,” Senator Wehby said, “and innovative approaches had to be devised which involved the Jamaican Diaspora.” Following the trip, Minister Shaw reported that the discussions in Washington D.C. were successful and the multilateral agencies were now seriously considering Jamaica’s position that cheaper money must be accessed to address the indebtedness of middle-income countries like Jamaica. “The principals of the World Bank and the Inter-American Development Bank (IDB) accepted the persuasive arguments we put forward,” he said. Minister Shaw announced that the World Bank had committed to undertake, at their expense, a comprehensive study on corruption in Jamaica budgeted to cost approximately US$250,000 (J$17.5 million). Assuming the responsibility of straightening out the fiscal management practices of government, Minister Wehby announced that consideration was being given to the introduction of performance-based budgeting.
Explaining the benefits, he said “this will improve the link between money spent by the government and the results or outputs by the government, by linking clearly defined outputs, providing incentives for meeting targets and holding management strictly accountable for any significant deviation from the programme targets.” “Management is allowed greater flexibility in how they manage their budgets to meet their pre-agreed objectives, with which comes increased accountability and responsibility,” he added. Turning to tax reform, Minister Wehby announced that a committee of experts from the public and private sectors was appointed to review tax reform studies conducted previously, with the aim of coming up with an appropriate tax reform plan. He was speaking at an investment seminar hosted by Jamaica Money Market Brokers (JMMB). “The Government will embark on a comprehensive tax reform programme in 2008/09 to preserve the integrity of its tax revenues and boost compliance,” Mr. Wehby said, adding that, “all recent tax reform studies highlighted tax compliance as a major issue in Jamaica.” In the meantime, Minister Dwight Nelson, who has been given oversight responsibility for the Public Service, called on civil servants to improve their performance by optimizing service outputs, enhancing the sector’s image and making the profession an attractive option for employment.
Speaking at the launch of Civil Service Week 2007 in November, Minister Nelson said “Jamaica’s civil servants play an important role in national development. However, the image of the public service has been eroded in the public’s eye.” Minister Nelson suggested that the service “needs a cadre of competent, creative and committed individuals to continue the restructuring and re-organization process.” He said that while civil servants needed to undertake their duties with integrity and objectivity, this would only be achieved if they are motivated by inspired leadership. At the same time, responsibility for the national airline, Air Jamaica, was returned to the Ministry of Finance, following a brief re-assignment to the Ministry of Transport and Works. Moving quickly and decisively to outline plans for the future of the airline, Minister Wehby announced that it would be restructured for divestment by March 2008, to relieve the national budget of the severe burden placed on it by the airline.