Friday 24 January, 2020

Phillips' call for cut in GCT was a bait- Opposition Senator Haughton

Opposition Leader Dr Peter Phillips

Opposition Leader Dr Peter Phillips

The call by Opposition Leader Dr Peter Phillips for the Government to cut the General Consumption Tax (GCT) by two percentage points has been knocked down by Senator Andre Haughton, one of Phillips’ most recent appointees to his shadow cabinet.

It is not known what repercussions if any, will follow Haughton’s different take on the matter as he made his maiden contribution to the State of the Nation Debate in the Senate on Friday.

Senator Dr Andre Haughton

But, while Phillips has posited that the cut in the GCT rate from 16.5 per cent to 14.5 per cent would ease the economic burden on poorer Jamaicans in particular, Haughton suggested that it was not worth it. He argued that it would cost the country far more than it would benefit individuals.

But why did Phillips make the call at a National Executive Council (NEC) meeting of the Opposition People’s Party (PNP) in November?

Haughton stated that it was done to “bait” the government.

“There has been many talks and our party leader made some hints and tossed out a bait about reducing GCT by two per cent and I heard Senator Sinclair, as well as Audley Shaw, talking about ‘we (the government) are going to take this into consideration’ without breaking down the numbers. Mr President instead of break down, let me break up the numbers,” Haughton said.

“If we are supposed to reduce GCT by two percentage points, moving from 16.5 to 14. 5 per cent, it will cost the country about $25 billion to $26 billion, assuming that every year we take $200 billion from GCT.

Now, this two per cent is going to cost the country $26 billion. That is the average cost,” Haughton outlined.

He said the savings that would accrue to individuals are minuscule.

“What is the benefit of the average consumer? I mean, if you buy something for $100, you pay $16.50 in GCT. You’re going to save $2. You buy something for $1,000, you might save $20. You buy something for $10,000, you are going to save $200. Then you going to buy something for $100,000, you will save 2,000.

“Now, is this saving as significant enough to each Jamaican for us to sacrifice $26 billion to achieve? Is it? Is it? We have to think more carefully about what our objectives are,” he remarked to sustained applause from government senators who reminded him that it was Phillips who called for the tax cut.

“We always dash them bait, man. Fishes will always bite bait,” Haughton responded.

And he was not yet finished.

He added: “We have to think more carefully about what our objectives are.  I have never been the advocate for the fiddling of numbers. I believe that whatever the cost we incur as a nation it must be to the full benefit of the country”.

That was followed by more applause and desk-thumping from government senators.

It is not immediately clear whether there will be any repercussions for Haughton to publicly state a different ‘policy’ position from the party leader given the principle of collective responsibility which is a mainstay of the Westminster model of government that is practised in Jamaica.

In a fairly wide-ranging presentation, Haughton was also critical of politicians and academics who suggest that the rapid devaluation of the Jamaica dollar against its main trading partners was not that important.

Haughton was also critical of the government for its handling of the dengue outbreak which has claimed dozens of lives, as well as the rundown state of public health facilities.

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