Energy boost

In what could be considered an almost urgent attempt to get Jamaicans to stick with his governing party, Prime Minister Andrew Holness used the Jamaica Labour Party’s (JLP’s) 81st annual conference on Sunday to target middle-income earners and vulnerable groups, promising to reduce electricity tax and provide debt forgiveness on water bills, among other reprieves.

For the next Budget, Holness said his Government would reduce the general consumption tax (GCT) on electricity from 15 per cent to seven per cent and remove the non-tax threshold, replacing this with an incentive-compatible rebate of GCT for persons who use 200 kilowatts or less per month.

He said this would facilitate the rollout of the prepaid system of electricity purchase, which was implemented several years ago but has remained a pilot programme.

The JPS will now be required to roll out prepaid meters nationally, particularly in vulnerable communities, Holness said.

The prime minister did not indicate how many Jamaicans stand to benefit from this decision or the estimated monthly savings for Jamaican households. Still, finance minister Fayval Williams said the cost to the coffers would run approximately $1.5 billion, annually.

“Since approximately 70 per cent of JPS consumers, which includes mostly residential customers, already don’t cross the threshold of usage for the application of GCT then the policy is expected to benefit mostly those from middle- to upper middle-income groups,” economist with the UN Jamaica Economy Panel Keenan Falconer said on Sunday.

He said this would also account for the fact that the revenue loss to the Government is minimal and not likely to have a material effect on the fiscal accounts.

He said since most users are at the lower end of the usage threshold, the greater effect of the combined revenue loss could be more attributable to the reduction in the applicable rate than the proposed raising of the taxable threshold.

Falconer said differential rates of GCT are also not uncommon for some goods and services, so the change is not expected to be administratively difficult to implement.

“Overall, the policy proposals appear to be measures of social policy that are designed to alleviate the cost of living by also foregoing some categories of non-tax revenue. The containment of revenue losses through this specific targeting seems to also consider the tight fiscal space within which the government is operating, where overperformance in tax revenue has decelerated, concomitant with growth in the wider economy,” he said.

Water Bill write-off

Holness also announced that the state-run National Water Commission is to write off the debts of Jamaican pensioners with payments outstanding for two years or more.

Persons assessed to be in need based on the PATH beneficiary identification standards should also benefit.

Additionally, persons who have been disconnected for longer than six months who go in and make payment arrangements will get a 50 per cent or more discount on the debt based on a needs assessment.

Holness said they would get up to one year to pay.

This amnesty is to last for three months and will begin on January 2, 2025.

“This is aimed at giving relief to those persons who are suffering with the weight of bills from major household leaks in the past,” Holness said.

Beginning next month to January, Holness said his Government would waive fees for all craft vendors in government-owned craft markets and write off any outstanding fees owed by craft vendors.

“This is designed to ease the economic burden on the craft vendor and give them a head start in the winter tourism season,” he said.

He said in 2025, he would begin the Tourism Worker/New Social Housing Programme, where the Government, through the Tourism Enhancement Fund and hotel owners and operators, would partner to build social-housing solutions for assessed workers in the sector.

Political analyst Damion Gordon said Holness had to use his presentation “of a populist orientation” to speak directly to the Jamaican people given the context of an out-of-favour government and a rising opposition party, based on recent opinion polls.

He said, too, that the People’s National Party’s (PNP’s) strong performance in February’s local government elections and its victory in the Aenon Town and Morant Bay by-elections on Friday would have triggered a response.

He said the prime minister recognises that the emphasis the party has been placing on its macroeconomic stewardship is not resonating and that more tangible and direct interventions that will deliver positive benefits for ordinary Jamaicans are needed.

“This populist orientation was reflected in the theme of the conference, which emphasised that the Government is caring, capable, and active … . To some extent, the prime minister would have identified some of the pain points of the Jamaican people, including the high cost of living, high electricity bills, high transportation costs, and he would have also announced pending economic stimulus measures and tax cuts to address these issues.

“He will have to contend with an environment of skepticism. People will not have hope or will not be enthusiastic about these policies unless he delivers on them, and even when this happens, it is left to see if these goodies will be sufficient to offset the dissatisfaction that citizens face in many other areas of their lives,’ said Gordon, lecturer in the Department of Government at The University of the West Indies, Mona.

He said issues, including the road network across the country, the health sector, matters of crime and security, corruption, and general dissatisfaction with income levels, were not sufficiently covered by Holness.

“[I’m] not sure, however, that his presentation will shift the political needle in so far as people will return to their realities tomorrow, and much of the promises made today will be quickly forgotten in the coming days. So I think that we will see the true test of today’s conference presentation when the Budget is read next year, and that will obviously precede the general election, which will be held at some point during the course of next year,” Gordon said.

The opposition, led by PNP President Mark Golding, has consistently called for Holness to announce the date for the general election due by next September, but on Sunday, Holness scoffed at the call, saying the JLP does not compete.

“We are not in a fight with them. They are not in our league. We [are] not running any race with them. We have too many things to show. We have the achievements. For the first time ever, a government can campaign on what it has achieved; a government can campaign on showing the people what will come, not empty promises, but you can look on the track record of achievements and make a judgment.

“If you were to ask yourself who is capable of delivering the future that you want, then it must be the Jamaica Labour Party,” he said.

Holness said the decision comes down to one thing: the JLP being the party with the experience to lead Jamaica through and out of turbulent tides that come with governing a country.

He said that as the time for a decision draws near, about the general election, he has “so much things to say” and “a lot of things to do”.

“I have given my life to Jamaica. I am yours. Jamaica was never an afterthought for me. I have been in this thing since I was 18 years old. You know that I am not going to sugarcoat and tell you any lie. I am going to tell you as it is, and I am telling you that the Jamaica Labour Party has the energy, has the vision and the ideas. We have the people to continue to change Jamaica,” he said.

kimone.francis@gleanerjm.com