Where’s the money, Dr Clarke?
Canute Thompson $190m spent on 14 cars with $73m unexplained
IAM trying to make sense of the explanation of Nigel Clarke, the minister of finance regarding the $190m the Holness administration has spent on high-end vehicles. The minister, in a statement to Parliament (his first statement), made some obvious errors or omissions and has left the country even more in the dark about this massive expenditure.
The minister indicated that he was seeking to, among other things, correct inaccuracies in a
Gleaner report that stated that the Government had spent $190m on 18 vehicles. The minister did not dispute the expenditure of $190m, but disputed the number of vehicles involved, explaining that it was 14, not 18, vehicles as was reported by The Gleaner.
This means that whereas, using The Gleaner’s numbers, the average spend per vehicle was approximately $10.5m, the average spend using the minister’s figure of 14 vehicles is $13.5m. This, on the face of it, is preposterous and warrants further and better particulars, and an investigation by the auditor general.
But the explanation of the minister becomes even more mind-boggling. The minister said cost, insurance and freight (CIF) on the 14 vehicles was US$682,000, and strangely, seemed to boast that this CIF was $10,000 less than what the Simpson Miller administration had spent on new vehicles.
THE IRONY OF IT ALL
It is to be recalled that the Simpson Miller administration had been castigated, by then Leader of the Opposition Andrew Holness, for spending $60m on 20 vehicles. So while the Simpson Miller administration had spent an average of $3m per vehicle and was roundly criticised, the Holness Government has spent an average of $13.5m, or more than 4.5 times more per vehicle!
The minister asserts that the difference in the total spend of $190m is due to taxes that the Holness administration had to pay, which was not the case when Simpson Miller bought 20 units for $60. The minister submits that the Government paid GCT of 16.5%, SCT of 20%, and CAF (he didn’t state the rate of CAF, but Customs’ website says it is 0.3% of CIF value). So the total of the taxes on these vehicles was 36.8%. This produces a total cost of US$932,976 for the 14 units, inclusive of the taxes.
I do not recall what the exchange rate was in 2016, but let us use $125:1. That would produce a total of J$116.6m, a difference of approximately $73m which has not been explained.
The minister needs to come back to the country with a much clearer statement. It is a bit embarrassing that a minister of finance, in his very first statement to Parliament, would have generated more darkness than light on a matter so important as to how Government is spending public funds, in response to a claim that the Government has been reckless.
Rather than proving that the Government has been measured and responsible, the finance minister has provided evidence of unqualified recklessness. So the country needs to know, where has the $73m gone?