Tue | Jul 23, 2024

Editorial | PNP’s policymaking

Published:Tuesday | June 18, 2024 | 12:06 AM
Spokesperson on Finance and the Public Service, Julian Robinson
Spokesperson on Finance and the Public Service, Julian Robinson

Shadow Finance Minister Julian Robinson’s swift rejection of his colleague Damion Crawford’s exploration of the possibility of increasing the general consumption tax (GCT) by one percentage point to help fund Jamaica’s education system highlights the Opposition’s fear of being branded the tax-hiking party.

But a more fundamental question raised by this note of discord between two senior members of the shadow Cabinet is how it goes about formulating policy and the level of discipline Mark Golding, the leader of the People’s National Party (PNP), exercises over his frontbenchers.

Put differently, with the latest opinion polls showing the PNP with a lead over the governing Jamaica Labour Party (JLP) and having a real shot of forming the Government at the next general election, can voters repose faith in the policy declarations of the Opposition? For while Mr Crawford did not offer the GCT hike as a done deal, the episode leaves a sense of the PNP making it up on the fly. Which runs counter to what is expected of a government in waiting.

To be fair, Mr Crawford, the PNP’s spokesman on education, did not, in the context of Jamaica’s education circumstance, float something outrageously beyond contemplation.

Although historically, the island spends around five per cent of GDP on education (the budget for the current fiscal year is $160 billion, of which 75 per cent is for salaries), education outcomes generally lag behind regional peers, most of which spend comparatively less. Indeed, the consensus is of an education system in crisis, incapable of preparing Jamaicans for a 21st-century economy.

SPENDS LESS

That was the backdrop against which Prime Minister Andrew Holness, in 2021, established the Orlando Patterson Commission to produce ideas for the transformation of the sector. Like others before them, Professor Patterson’s commission noted that in real-dollar terms, Jamaica spends less per student than several of its Caribbean partners. Among the commission’s recommendations were ideas for bringing more funding to the system, including steering money from the cash-rich vocational trading agency, HEART/NSTA Trust, to the early childhood sector and requiring parents with children in secondary schools to specifically contribute to their education.

This is the part of the situation in which Mr Crawford, in remarks at a conference of the Jamaica Association of Principals of Secondary Schools (JAPSS), floated the idea of the one percentage-point hike in the rate of GCT (a value-added tax on most goods and services), which is now levied at 15 per cent. This, he said, would raise $25 billion and allow the Government to spend an additional $67,000 per student in schools.

Mr Crawford did not provide the basis of his calculations, which appear a tad high. Last year, Jamaica raised an estimated $281.19 billion in GCT ($158.81 billion from domestic transactions and $122.31 billion on imports), suggesting that the money was earned on nearly $1.9 trillion dollars worth of goods and services.

Expectedly, the ruling party seized on the suggestion, especially given the PNP’s recent observations that despite not initiating new taxes in recent years, the Holness administration, as a proportion of GDP, now collects more taxes (28.1 per cent) from Jamaicans than the PNP when it was last in office in 2015-16 (24.4 per cent). Moreover, the Opposition has criticised the Government for not being more aggressive in raising the income tax threshold.

WAS NOT SURPRISING

With taxation being a hot-button political issue, Mr Robinson’s fast contradiction of Mr Crawford was not surprising. While noting that the shadow education minister had explored the issue as one of several sources from which additional resources could come, he said: “It is important to state unequivocally that the PNP has neither discussed nor contemplated the introduction of any additional or new taxes. Our party understands the burden that increased taxation would impose on our citizens, especially at a time when the cost of living has been increasing intolerably and mere survival is a daily struggle for most Jamaicans.”

He said that the Opposition believed that there were “sufficient resources within the Government’s current Budget to better invest in the education sector” and that should the PNP form the administration, “we are committed to prioritising and reallocating existing resources to ensure that education receives the attention and funding it needs without introducing new taxes”.

Obviously, Mr Crawford either did not get that memo or was not at the shadow Cabinet meeting where the funding of education was debated and a policy position arrived at.

This matter has echoes of Andre Haughton’s 2019 public repudiation of then PNP President Peter Phillip’s call for a two percentage-point rollback of the GCT rate to provide an ease to consumers.

Dr Haughton, an economics lecturer, said that the proposal by Dr Phillips, the instigator, as finance minister in the former PNP government of Jamaica’s macroeconomic reform programme, would cost the Treasury $26 billion, with modest benefit to the average consumer.

These incidents are not of themselves disqualifying for a party seeking to form the government. Nonetheless, they will cause voters to wonder about the discipline of the party and the process by which it arrives at its policies, which helps to shape perceptions of its coherence and of how it might govern.