JIS News

The essential message of the budget is that it is now “time for us to live within our means,” Financial Analyst and Consultant to the Ministry of Finance, Dennis Chung, has emphasised.
“Look at it this way: It’s like your personal budget. If you are in debt and your expenditure is greater than your income, you have to either cut back or try to find additional sources of income,” Mr. Chung told JIS News in an interview.
He insists that Jamaica has to go through a structural adjustment. “Austerity at this time is absolutely necessary, for our debt is too high and in this environment of global income meltdown, we face inevitable constraints,” the Financial Analyst, who is also a newspaper columnist, said.
Noting that 56 cents out of every dollar are already accounted for in debt repayment, Mr. Chung argued that Jamaica has very little “wiggle room” in terms of expenditure. “We have to cut back and Jamaicans have to adjust their minds to these realities,” he said emphatically.
Mr. Chung said that with certain costs rising, Jamaicans would have to learn to consume less and save more. In this regard, he has expressed strong support for Government’s decision to increase consumption taxes, saying that this move would have the effect of discouraging wasteful consumption, particularly fuel.
A shift toward consumption taxes and away from an over-reliance on a Pay As You Earn (PAYE) method would also create a virtuous cycle in Mr. Chung’s view. “Consumption taxes are far easier to administer and don’t require the administrative overheads which PAYE incurs. So, you collect more money and you don’t have to swell your expenditure budget to do so,” said Mr. Chung, who has just published a book on the Jamaican economy.
“We should have moved toward more consumption taxes a long time ago,” he added.
On the matter of cutting public sector expenditures, the financial analyst said this is eminently sensible, as the country in the present circumstances cannot afford an expensive bureaucracy. Mr. Chung said the private sector itself would have to make adjustments and has to set its own house in order.
“If businesses fail to make the adjustment, they will face serious difficulties. Everybody has to live within his means. Everybody has to cut back. This is a national imperative,” he concluded.

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