Chester’s caustic critique of the budget
This is the third in a series of editorials we are publishing on the government’s 2019/2020 budget. Today we discuss Chester Cooper’s take on it.
Cooper seems a serious member of parliament and a diligent shadow minister of finance. He comes to duties prepared and formidable. While we disagree with some of his assertions, several of his sharp criticisms warrant attention.
It is not appropriate, as some say, that the opposition cannot speak credibly on fiscal matters because of its past mismanagement of the government’s finances. In any event, Cooper has not served in any administration.
Just as we did in our analysis, Cooper noted that the budget lacked a plan to grow the economy. This is fair criticism. And he claimed that the government’s budget “puts numbers ahead of people”. By that we assume he means financially it does not provide adequate sums for the delivery of essential services to people such as those in law enforcement or in health or in the promulgation of policies to increase economic activities, and hence, employment.
We find no evidence, however, to support his contention that this budget is serving the interest of special interest.
He questioned how the government having collected “$1.9 billion” in revenue in nine months between July 2018 and March 2019 (this is only eight months), an average of $189 million per month, thinks it will collect “$2.4 billion” in three months. This is a reasonable question. It means collecting some $889 million for the three month period between April and June 2019; an average of $296 per month. This is 56 percent more than it collected in the first nine months of this year.
As was pointed out by Cooper, the minister of finance, earlier this year, said that when revenue increased by $272.6 million he expected positive performance to continue for the remainder of the year. It didn’t. In fact, revenue suffered a $240 million decline. This being so, why should there be confidence in the minister’s robust forecasts for the rest of the year?
Cooper criticized the government for failing to meet its own revenue forecast notwithstanding the increase in VAT last year. While this criticism is understandable, it ignored the minister’s explanation that the full VAT increase imposed was not effective for the full 12-month period for perfectly valid reasons, and further, that the full tax from the gaming houses was not collected. This latter explanation is unacceptable. The government had full authority to collect from the gaming houses. Instead it cowered in the face of increasingly powerful gaming forces. For this reason it must not be excused.
Cooper also noted that while the government was meeting its deficit targets, contractors and vendors complain that they cannot get paid. We receive similar complaints. Cutting the budget of ministries for not spending all money budgeted is a distinction without a difference, as is balancing the budget by not paying bills.
Finally we remind Cooper that it is not good enough to simply criticize the government’s policies. It is equally as important for them to put forward an alternative policy. We know the FNM’s plan is to balance the budget in the shortest possible time. What, Cooper, is the PLP’s plan?
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