An Anal­y­sis of Open­ing State­ments 2012-2015 - Part 3

The Star (St. Lucia) - - COMMENT -

Atru­ism is a state­ment that is so widely ac­cepted, or so ev­i­dent and fac­tual, that ques­tion­ing its va­lid­ity is con­sid­ered foolish. A tru­ism does not need to be sup­ported by any other ev­i­dence. It is ac­cepted as “true.”

Here are a few tru­isms that are bound to pop up sooner or later in K’s speeches: The ap­ple never falls far from the tree. A fool and his money are soon parted. A friend in need is a friend in­deed. A house di­vided against it­self can­not stand.

Dick­ens open his epic novel, A Tale of Two Cities, by mak­ing many state­ments about so­ci­ety, with­out any fur­ther ev­i­dence. These state­ments are tru­isms: “It was the best of times, it was the worst of times, it was the age of wis­dom, it was the age of fool­ish­ness, it was the epoch of belief, it was the epoch of in­credulity, it was the sea­son of Light, it was the sea­son of Dark­ness, it was the spring of hope, it was the win­ter of de­spair.”

It al­most sounds like K at what he con­sid­ers his very best: “In­creas­ing taxes is not al­ways the an­swer”, yet in one fell swoop he in­creased taxes on ev­ery­one by 15% with the in­tro­duc­tion of VAT (which, by the way, is a good and just tax).

Warm­ing to the sub­ject, K goes on to say, “How­ever, over-tax­ing any econ­omy dis­cour­ages eco­nomic growth”, a tru­ism if I ever heard one; but K quickly pro­gressed to an even truer tru­ism, namely, “In­creas­ing taxes is never pop­u­lar.” Where does he get these pearls of wis­dom from?

As win­ter fol­lows fall – a tru­ism on my part – K de­liv­ers the next plat­i­tude, “Gov­ern­ment is very much aware that in­creas­ing taxes can­not be a so­lu­tion by it­self. It must be bal­anced and tem­pered by re­duc­tions in over­all spend­ing. The tax dol­lar is a bur­den on the en­tire State, and the State must earn the money it col­lects by pro­vid­ing qual­ity ser­vices.” Of course, as we are deal­ing with plat­i­tudes and tru­isms – or la­palis­sades, as the French call them – K feels no obli­ga­tion to ac­tu­ally ad­dress the is­sue of poor gov­ern­men­tal ser­vices in re­turn for higher taxes.

In­stead he re­minds the coun­try that all is not what it ought to be. “Mr Speaker, I want the coun­try to know where we should be and where we are right now.”

The pic­ture K paints is pretty dis­mal. “If we are to merely main­tain our al­ready high un­em­ploy­ment rate so that it does not in­crease fur­ther, we would have to grow by about 3 per­cent per an­num.”

Well that has not quite hap­pened, as we all know.

“Our un­em­ploy­ment rate is 23.3 per­cent. For this Gov­ern­ment the tar­get would be a max­i­mum un­em­ploy­ment rate of ten per­cent,” Nei­ther has that. “Our debt level is around 73.6 per­cent of an­nual eco­nomic out­put. We would like that to be around 60 per­cent and lower.”

Well, “If wishes were fishes we’d all swim in riches” as the old say­ing goes. The rate has ac­tu­ally in­creased quite se­ri­ously. K is go­ing to have to come up with a bet­ter so­lu­tion.

He goes on to say, “Our over­all deficit level this year is 5.7 per­cent of GDP. We would like it to be in the re­gion of 3 per­cent and lower.”

Yeah, well, No Com­ment; no point in em­bar­rass­ing a guy.

But then K comes up with a slam-dunk of a tru­ism, “Mr Speaker, each of these chal­lenges re­quires so­lu­tions.”

Well, I never … But he’s not fin­ished yet, “We must seek so­lu­tions through eco­nomic com­pet­i­tive­ness, re­silience and fis­cal sta­bil­ity.” What else is new?

There’s plenty of hot air left. “We do not have the lux­ury of time to solve them se­quen­tially. So­lu­tions will not be reached if we do not ad­dress all three chal­lenges si­mul­ta­ne­ously and me­thod­i­cally.”

Well, ok, yes, I get that, but then K spoils the mo­ment and adds, “Our fis­cal prob­lem will not go away just by grow­ing our econ­omy.”

Well maybe not, but no­body has ac­tu­ally sug­gested that that it the case any­way. So why make this an is­sue? Ex­cept of course for the mi­nor point that “grow­ing our econ­omy” would go a hel­luva long way to­wards solv­ing our prob­lems.

The trou­ble is that in sav­ing, sav­ing, sav­ing, K is ac­tu­ally shrink­ing our econ­omy, which is just about the worst way of com­bat­ing our fis­cal prob­lems.

But don’t be too hard on the guy. He’s never been in busi­ness and has never had to fight for sur­vival in the cut­throat world of com­merce. Gen­er­ally speak­ing his wages have come from taxpayers’ money.

In­stead of sug­gest­ing ways out, K of­fers a whole boat­load of tru­isms, “If we were to re­duce our debt-to-GDP ra­tio to the pru­den­tial 60 per­cent level by the year 2025, we would have to grow at an av­er­age of 10.5 per­cent per year from now un­til 2025. It would mean that for­eign di­rect in­vest­ment would have to be 55 per­cent of an­nual out­put, ev­ery sin­gle year.”

Lord knows what the re­quired growth rate would be now af­ter three years of Ken­ni­nomics!

K is al­ways will­ing to lis­ten; you have to give him that. But he is not al­to­gether con­vinced that any­one other than him­self truly un­der­stands the econ­omy.

“It seems that ev­ery­one has an idea on what can be done, and this is good and healthy. How­ever, I know that some­times there ex­ist many who are un­aware of what the re­al­i­ties are.”

He par­tic­u­larly ob­jects to some sug­ges­tions and quotes a few: “Let’s close down our Em­bassies. We have too many For­eign Mis­sions do­ing noth­ing at all.” “Let’s make fewer over­seas trips.” “Let’s cut the salaries of the se­nior man­age­ment and re­duce the num­ber of con­sul­tants.” “Let’s save more on util­i­ties and tele­phone use.” “Let’s re­duce waste in the Public Ser­vice, like the use of Gov­ern­ment ve­hi­cles,” and “Let’s en­gage in debt-for-na­ture swaps.”

K then takes a look at some of these sug­ges­tions. He in­sists that the to­tal cost of all seven Em­bassies (and nu­mer­ous Con­sulates, which he does not men­tion) is a mere $12 mil­lion an­nu­ally. Of course he does not spec­ify what sort of dol­lars he is talk­ing about. If it’s USD, then the cost sud­denly be­comes in­ter­est­ing at XCD 32,000,000.

With re­spect to fewer over­seas trips, K in­di­cates a re­duc­tion from $700,000 to $500,000. He ad­mits that many over­seas meet­ings are funded by ex­ter­nal agen­cies with the in­her­ent risk of com­pro­mis­ing our in­de­pen­dence and sovereignty; the jolly jaunt to Tai­wan re­cently to open the new em­bassy and hand out post­cards bear­ing K’s photo to St Lu­cian stu­dents be­ing a case in point – we would not wish to be­come too de­pen­dent on Tai­wan, would we now?

K stresses that strip­ping the Public Ser­vice of its en­tire se­nior man­age­ment will not re­solve the prob­lem. Maybe not, but mak­ing them more ef­fi­cient might. Get­ting peo­ple to work on time and lim­it­ing “step­ping out” time would be a good start.

As I men­tioned in Part Two, K just loves gad­gets: “With re­spect to ve­hi­cle use, this Gov­ern­ment has been bold and in­no­va­tive. We ex­pect the Au­to­mated Ve­hi­cle Fleet Mon­i­tor­ing Sys­tem that we re­cently in­sti­tuted to have a medium-term im­pact of in­creas­ing ef­fi­ciency and re­duc­ing wastage in the use of the SLGs.”

Yeah, well, we have all no­ticed the marked re­duc­tion in SLG ve­hi­cles out­side Domino’s Pizza Par­lours at lunchtime and the new in­fre­quency of po­lice trucks drop­ping off their girl­friends to go shop­ping at JQ’s, haven’t we? There are even fewer trucks tak­ing fam­i­lies to the beach on Sun­days.

Time for another tru­ism: “pay­ing our debts is a must.” And just for good mea­sure he piles on a few more: “De­faults on debt pay­ments will only lead to fur­ther hard­ship be­cause we would dam­age our rep­u­ta­tion and make it dif­fi­cult for us to bor­row money in the fu­ture.”

Ac­tu­ally, you should pay your debts be­cause you have signed an agree­ment to do so, not be­cause you plan to bor­row more in the fu­ture. The idea is to reach a point where you do not have to live on bor­rowed money, but K doesn’t get that, ob­vi­ously.

“Nor is it con­scionable to hold back on NIC con­tri­bu­tions and pen­sions.” Now why does that tru­ism come across as a threat? Am I get­ting para­noid?

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