[OPINIONS]:::That outstanding Seaga interview

No. 63 Monday, March 8, 2010
[POSTED BY::: Robert Dalley, Esq] 
C.V.M.'s Garfield Burford host of the award winning 'Direct' evening current affairs programme had on his well respected show recently former distinguished Jamaican Prime Minister, former finance and planning minister and former Leader of the Jamaica Labour Party, Most Hon. Edward Seaga, O.N., and a highly informative discussion took place on the show.

    Eddie Seaga who is factually Jamaica's most successful prime minister to date emphatically enunciated that the Bruce Golding led regime took much too long to engage the International Monetary Fund (I.M.F.) pertaining to entering into a formal borrowing relationship with the fund. And therefore, the economy has deteriorated steadily over the past two years.
    Mr. Seaga is bang on target and the government severely erred in that regard. Clearly, the prime minister, minister of finance and the cabinet greatly mis-read the economic conditions having to do with global recession and today the country is paying dearly for that immense government delay which is undoubtedly a huge mis-step on the government and Prime Minister Golding. When Minister Shaw publicly and vociferously stated that the worldwide financial meltdown would not affect the country in any significant way he seriously faltered and therefore, the country was slow to address the after effects' of the recession which is now having a monumentally disastrous effect on the economy of this country.
    Remittances has decreased significantly, the bauxite industry has literally closed down operations across the island while the tourism industry has not grown much over the past 14 months while incoming overseas investment has been at a stand-still over the said period. Government's revenue inflows have declined and the export sector has dropped significantly. The fiscal deficit has increased along with the country's inflation rate and further, the unemployment rate is at an all time high which is having a financially devastating impact on most families throughout the country. And even worse the cost of living rate has increased more than 50 percent since October 2007.
    According to Mr. Seaga the major negative economic effects of the global economic meltdown are just being significantly felt by all throughout the country and within the economy and it is necessary that the government finalizes the I.M.F. stand by loan agreement of US$1.2 billion with the I.M.F. which has to be signed off on by the Board of Directors of the Fund. The fiscal and external deficit are way off the budgeted target and must be dealt with prudently by the Finance Minister and his team of his technocrats who based at the ministry.
    Jamaica has lost over 800 millions dollars from the bauxite industry over the past year and concomitantly, hundreds of persons have lost their jobs from the closure of those bauxite companies. The majority of business owners in this country are not paying any form of income tax hence the compliance tax for the country is at a mere 25 percent as was recently outlined by Minister Shaw. This situation needs to be rectified in the shortest possible time and all those persons who have been evading the tax authorities and not paying over their taxes must be fully prosecuted and face the full force of the tax courts. The government's fiscal deficit which is factually the amount of money that is collected by government and the amount that it spends is at JA$87.7 billion for the period of April to November 2009.
    When Minister Shaw presented his budget speech last year, April, he had projected that the fiscal deficit would have been JA$72.9 billion for that period. The government has borrowed a combined amount of $30 billion from the Bryan Winter led Bank of Jamaica for the months of November and December of last year and this amount is due to be paid back to the Central Bank within the next three months.
    Last year, while presenting the $21.8 tax package in December of last year, Prime Minister Golding articulated that by the middle of this year Jamaica should begin to see some small level of economic growth, however, Mr. Seaga during that C.V.M. television interview stated that within the framework of the country's economic problems no form of economic growth will take place. Without a doubt Mr. Golding's technical advisors are grossly mis-leading him and this situation is quite unfortunate to say the least. To put it bluntly, ever since he was elected prime minister his economic projections have always been way off the mark and this reflects rather poorly on the 'Chief Servant'.
    When asked by Burford as to his evaluation of the first tax pack­age which was presented by Minister Shaw in Parliament that taxed every single food item except rice and sugar and a range of other commodities that are widely used by the poor persons of this country, Mr. -Seaga stated that that specific tax package was a gross and major error on the part of the government that should never have been presented by Shaw in Parliament. Well said, Mr. Seaga. That said gargantuan tax package which was withdrawn by the government late last year was a cruel, barbaric and absolutely scandalous tax act of monumental proportions of which the government should be ashamed of themselves for wanting to impose such a tax package on the poor and middle income families of this country. Shame on you, P.M. Golding and Finance Minister Shaw.
    Mr. Seaga who eminently and successfully served as Jamaica's finance minister between 1980 and 1989 categorically stated that between those years when his J.L.P. was in Office some 100,000 jobs were created for that period, capital inflows were very high along with incoming foreign investment into the island; the income tax level for PAYE persons were on an equal level and not on a graduated salary threshold level as is the case effective January 1, 2010 for persons earning 5 million dollars and above. This graduated salary tax level for persons will last for a specific period of time as recently announced by the Prime Minister. He then went on to state that during the 1980s he leveled the salary tax level for Jamaican employees and correspondingly for owners of companies which had a positive impact on tax inflows for the country throughout the 1980s. Also, worthy of note here is that Eddie Seaga carried out during that period of governance a most comprehensive tax reform measure which brought taxes under an organized framework so to speak and their was a very large level of income tax compliance all throughout the 1980s due to the firm management of the tax department at that time. A story came out some months after the J.L.P. election victory of 1980 whereby a prominent businessman in the country at that time who strongly and financially supported the J.L.P.'s election campaign received a letter from the tax authorities outlining to him the fact that his companies owed the government of the day millions of dollars in outstanding taxes and of the need to pay up immediately or he would face the courts for those outstanding tax sums. He thereafter, made an appointment to have a meeting with the prime minister at that time, Eddie Seaga, at Jamaica House and after speaking to him requesting some form of government assistance in writing down that tax amount that was owing to the inland revenue department, Mr. Seaga firmly told him that his best advice to him was for him to get the services of a very good tax attorney and tackle his tax problems from that angle because there was nothing that he (Seaga) could do to assist him, although he was a firm supporter of the J.L.P. at that time. This story speaks to the impeccable integrity, character and mores of Edward Phillip George Seaga. A patriot, scholar and quintessential Jamaican politician.
    Burford went on to ask Mr. Seaga whether or not the Bruce Golding administration had asked him for any assistance or consultancy with regards to the country's economy. Mr. Seaga who is today one of the island's prominent statesmen stated no to the question. Bur­ford then pressed him by asking what sort of a relationship, does he currently have with Golding. He then commented that he only has a social relationship with Golding. Quite sad isn't? Eddie Seaga has been a J.L.P. member for over 50 years; immaculately served twice as finance minister, in the 1960s and again between 1980 and 1989 when he was prime minister; is a former long-standing Leader of the party; and former Leader of the Opposition; and having created political history by serving some 40 years as Member Of Parliament for Western Kingston quite honourably, successfully and dutifully thus making him a huge political giant and statesman within the country.
    Frankly speaking, he is one of the country's most respected, admired and noted former prime ministers with an outstanding track record in politics and government which is supported by the historical political documents of the country and by the Hansard Documents. He is responsible for creating and establishing the most governmental institutions in Jamaica. Golding and his government has made a fundamental and large political and governmental error by not contracting the services of former P.M. Golding to give professional and financial advice relating to the Jamaican economy. It is germane to comment here that Mr. Seaga stated on the said C.V.M. interview programme that if he was prime minister then he would not have implemented any new tax package for the country at this time. There are other measures that could have been put in place to raise the necessary amount of revenue for the country apart from putting another $21.8 billion tax package on the citizens says the erudite, fearless and highly experienced Eddie Seaga.
     I am of the firm opinion that P.M. Golding should employ Mr. Seaga as a special senior advisor to the Cabinet and to the Finance Ministry to allow the country and government to benefit from his wide wealth of experience in the areas of finance, taxation and debt management. This should be done immediately by fume Minister Golding and I am certain that Mr. Seaga would be willing to give his services to the government in those senior areas with a proper compensation package put in place for him and agreed to by him on a contractual basis. This country at this time needs the consultancy advice of Mr. Seaga.
    Pertaining to the island's agricultural sector, Mr. Seaga stated that there is a vast amount of potential for expansion for the industry and therefore the government must focus on prudently expanding this area. He is spot on with that comment. Jamaica currently imports some 80 percent of all food commodities that it consumes and this need to be systematically reduced to at least 50 percent in the medium term. It is really necessary that the government through the Agricultural Ministry modernizes the entire industry across the country and assist the country's farmers in that well needed modernization process with the necessary government subsidies put in place so that we can have an organized, cost effective and efficient sector which can begin to earn substantial foreign exchange for the country. Jamaica should be earning at least US$5 billion in exports from the agricultural sector. The organic area of agriculture is where this country must begin to focus on expeditiously along with the green house aspect of growing products on a large scale basis if you will. Lets get the ball rolling on these areas now, Minister Tufton.

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