New measures necessary to assist poor – PSOJ

THE GOVERNMENT must implement additional social welfare measures to help poor Jamaicans who are getting state benefits cope with the effects of the rising prices in the switch to indirect taxation, the Private Sector Organisation of Jamaica (PSOJ) has suggested.

The recommendation comes in light of an assessment by the Planning Institute of Jamaica (PIOJ) of the tax measures imposed to fund the increase in the income tax threshold to $1.5 million from $592, 800 – a controversial promise that helped secure the Jamaica Labour Party’s win in the 2016 general election.

The ‘Who Benefits? Who Pays?’ assessment, presented on Wednesday before a parliamentary committee, said the findings “suggest” that the typical household in each group benefited from the increase. Those in the poorest income groups would not benefit, it said, if the increases in social safety net, such as the Programme of Advancement Through Health and Education (PATH), are not factored.

Those PATH increases are to come on stream in June. The School Feeding Programme has also been increased.

DECLINING PURCHASING POWER

But what has got the PSOJ talking is the finding that “non-PATH households in the bottom-five deciles (poorest) will be worse off” because of their declining purchasing power caused from rising prices.

“They have to increase welfare spending. It’s going to have to happen informally,” Dennis Chung, the PSOJ’s chief executive officer, said of what the administration will have to do to help that group of Jamaicans, whose total number the PIOJ did not disclose.