Does the Government understand the difference between luxuries and necessities? It does not seem so, if comments made earlier this week by Finance Minister Karen Nunez-Tesheira are any indication.<\/p>\nNewsday Editorial
\nMonday, August 4 2008<\/i><\/p>\n
Does the Government understand the difference between luxuries and necessities? It does not seem so, if comments made earlier this week by Finance Minister Karen Nunez-Tesheira are any indication.<\/p>\n
Admitting that Government spending has contributed to double-digit inflation, Ms Nunez-Tesheira nonetheless insisted that the expenditure was a \u201cnecessary investment\u201d. But Government\u2019s main contribution to the spiralling inflation rate has been through its construction programme, and most of these projects cannot be considered investments in any real sense. The $148 million spent on the still incomplete Prime Minister\u2019s residence and Diplomatic Centre certainly pays no returns, and was entirely unnecessary. The building of a Government campus and Social Affairs tower and an Education Ministry edifice cannot be defined as investments, either. Even if we accept Prime Minister Patrick Manning\u2019s argument that the public servants who will work in these buildings will be more productive because of the comfort of their workspace, we very much doubt they will be productive to the tune of billions of dollars.
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\nNonetheless, Ms Nunez-Tesheira claims that this Government expenditure facilitates the development of tourism, health, education. The last claim is particularly egregious, since one of the few areas where government construction would have been worthwhile \u2013 the building of 601 Early Childhood Care and Education Centres \u2013 has been put off till 2012 because of the rising price of materials. This, it must be noted, occurs after ECCECs promised in two successive budgets failed to materialise. Moreover, the rising costs seem not to have affected other government construction projects \u2013 save perhaps the now stalled Performing Arts Centre, which is another project which might indeed be integral to the tourism sector. Here, the $3.5 billion allocated for tourism projects can be justified and, had the Government confined itself to this kind of construction, inflation would not have become an issue. As for health, a total of $3.7 billion was allocated to this sector, and most of that money is spent on supplies and services, not construction, so this is not driving inflation. <\/p>\n
Yet, not content with such arguments, the Finance Minister offered one even more peculiar \u2013 that the Government could not slow down its construction programme because the sector was partially responsible for stable employment levels. Yet the most pernicious aspect of inflation is that it affects poor people most harshly, erodes the savings of the better-off, and undermines overall confidence in the financial system. Does Ms Nunez-Tesheira really think a stable employment rate offsets these negative consequences? Is the Government she serves, really so insensitive to the plight of the poor people of the nation? <\/p>\n
During the last oil boom, the PNM administration presided over double-digit inflation from 1973 to 1984. Then, as now, inflation was fuelled by excess government expenditures. Now, however, rising food prices have become an additional factor. Perhaps the government may not be able to do anything about that in the short term, but it should not exacerbate the situation by continuing its wild spending. <\/p>\n
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Newsday Editorial Monday, August 4 2008 Does the Government understand the difference between luxuries and necessities? It does not seem so, if comments made earlier this week by Finance Minister Karen Nunez-Tesheira are any indication. Admitting that Government spending has contributed to double-digit inflation, Ms Nunez-Tesheira nonetheless insisted that the expenditure was a \u201cnecessary investment\u201d. … Continue reading Difference between needs and wants<\/span>