BUDGET WATCH

With the point-to-point inflation rate for December 2022 closing at 9.4 per cent for the calendar year as reported by the Statistical Institute of Jamaica (STATIN), one category of low-income earners is urging Finance Minister Dr Nigel Clarke to take critical steps to improve the plight of those whose minimum wage has been significantly eroded by the cost of living.

Clarke is set to open the 2023-2024 Budget Debate in Gordon House today.

While he is expected to unveil a balanced Budget, some sector leaders are hoping that the minister will address some concerns that would have a positive impact on businesses.

Elaine Duncan, president of the Household Workers Union, told The Gleaner on Monday that household workers have been struggling to make ends meet and to look after their families, owing to the effect that inflation has had on the $9,000 minimum wage they earn per week.

“We are hoping that there will be no new taxes and that we will hear something about the increase in the minimum wage to match up with the inflation rate. We need to hear from the minister on that,” Duncan said.

The movement in the inflation rate, according to STATIN, was mainly driven by increases in the indices for the divisions ‘Food and Non-Alcoholic Beverages’, which rose by 13.8 per cent; ‘Restaurants and Accommodations Services’, which increased by 23.9 per cent; and ‘Housing, Water, Electricity, Gas and Fuels’, which climbed by 2.8 per cent.

AWAITING WORD ON INCREASE

Minister of Labour and Social Security Karl Samuda said last week that his ministry has received the recommendation from the National Minimum Wage Commission for an increase in the minimum wage. However, Samuda, who was fielding questions at the Standing Finance Committee of Parliament, did not reveal when new rates would be announced.

Late last year, Duncan told The Gleaner that her union had recommended that the minimum wage should be increased to $15,000.

She also highlighted the need for more Jamaica Urban Transit Company (JUTC) buses to be rolled out in the Corporate Area as household helpers were forced occasionally to pay $150 on Coaster buses and route taxis to reach their destinations.

“To avoid the conflict, we at times pay $150. There are a few that will take the $120, but JUTC fare is $100, so if we can see the JUTC buses more often, we would not have to argue with those set of people,” she said.

Private Sector Organisation of Jamaica President Metry Seaga said that he hoped Clarke and the remaining public sector groups will reach agreements soon under the compensation restructuring exercise.

“I know the minister is now embroiled in this very difficult situation with a couple of the groups outstanding. The reset was important and I think we are on the way there. It is a tough exercise and I applaud everybody who is a part of it. I hope that there is a settlement sooner than later,” he said.

MSMEs WANT INCENTIVES

And Michael Leckie, president of the Small Business Association of Jamaica, wants the finance minister to roll out additional incentives to the micro, small and medium-size enterprise (MSME) sector.

“We want more incentives than what is being given, especially to small farmers. Small businesses need to diversify their base and seek to get involved in the agricultural sector,” he said.

He acknowledged that the proposed $1 billion allocated to the MSME sector was a good start, but noted that it would take nearly $10 billion to see the growth that was needed.

Keith Collister, director and chair of the Jamaica Chamber of Commerce’s (JCC) Economic and Taxation Committee, has reiterated a call for the removal of the five per cent surtax on personal income in excess of $6 million. This, he said, would restore the income tax system to the flat-rate structure that existed prior to 2016.

The JCC has indicated that the impact of this tax is to speed up the already-huge problem of brain drain, as it mostly affects highly skilled professionals, who are the most internationally mobile and whose talents Jamaica should seek to retain.

Further, the JCC has again urged the Government to remove tax on dividends. It argues that corporate taxation needs to be simple in Jamaica by creating a single layer of taxation and avoiding the double taxation of dividends.

Another proposal that Collister wants the finance minister to review is the incentives offered to companies on the Junior Stock Exchange with a view to restoring the original value.

He argued that the value of that relief is much less now than when it was first introduced.

“So we think that the relief should be updated and put it in US dollars, then you wouldn’t have to try and update it every year,” he told The Gleaner.