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RESPONSE TO SPECIFICS Money Supply The Opposition Spokesman on Finance noted that I was not specific about the money supply target which I outlined in the financing programme. It was M3. The Opposition Spokesman on Finance raised the issue about the cost of FINSAC. He uses the figure which I have provided of the gross cost of $73.5 billion, and in addition, refers to amounts used to purchase non-performing loans from NCB ($13.3 billion) and the amount used to purchase Citizen's non-performing loans ($1.8 billion). I assume that this was done by mistake, but the figures for bad loan purchase from NCB and Citizens are included in the overall gross figure of $73.5 billion. Duty on Motor Cars He also raised an issue about duty on motor cars and said that we were favouring the "Pajero man" and penalising the little man. Ministry Paper 17 was quite clear. The new rates range from 67 per cent on vehicles with an engine capacity of below 1000cc to 285 per cent on cars of 3000 cc and over. Pajero, Pathfinders and simi lar vehicles attract the same rate of duty as motor cars, and hence, they have been treated in exactly the same way as they were before. Net Increase in Debt My announcement of the amounts being borrowed for this year's budget seems to have caused confusion amongst many of the analysts. The fact that we are raising approximately $40 billion, does not imply that the debt stock will be increased by this amount. Much of the debt raised will be to pay off old maturing debt. Hence, when this is taken into account, the net increase for domestic debt is approximately $8 billion and that for external debt will be approximately US$100 million. The Opposition Spokesman on Finance spoke at length on the threshold but I do not believe he quite understands the cost of the threshold or how it is being spread over the year. The cost of raising the threshold as of January 1, 1999 is $260 million. lf it were for a twelve month period, a full fiscal year, the revenue loss would be $1050 million. That sum could not have been accommodated in the budget. I am not clear whether the Opposition Spokesman was advocating immediate lifting of the threshold, thus reducing revenue by over 61 billion, or was he suggesting that the relief of $260 million be spread over the remaining eleven months of the year. The Overall Fiscal Deficit The Opposition Leader dedicated a great deal of time to this matter and it is something which I will address under a section which I call 'Truth, Honesty, and Ethics". But at this stage, I will speak specifically to a statement in his presentation, and I quote: "At this level, we are back to the period of mammoth deficits of the 1970s which peaked at 18 per cent in 1989. I have asked for the time series data on fiscal deficit for the last period when the Leader of the Opposition was Finance Minister, and the figures read as follows:
In not one year of his tenure as Minister of Finance or Prime Minister, did he achieve an overall public sector surplus. Furthermore, in 1983/84, the deficit was 19.6 per cent of GDR The Opposition Spokesman spent a long time suggesting that my announcement of the increase on gasoline in litre was meant to conceal the full impact. Such statements are really not worthy of inclusion in a major presentation. It is totally unacceptable for someone in his position, as we approach the year 2000, to publicly acknowledge that he knows nothing about the metric system and he wants to return to the era of gallons. Such statements belong more to a roadside meeting in North East Manchester. As regards the lady from North Manchester, the Member spoke about the problems she faced financing her three children in high school and in her health. It is unfortunate that he should use this example, because as her Member of Parliament, he should be able to direct her to the various programmes that are in place to assist her. With regard to her children - payment of school fees, the Ministry of Education has a fund whereby financial assistance is available. In terms of her health problems, there is Spaldings Hospital, a Type III clinic, and if there is difficulty with drugs, there is a special drug window which would provide her with required medication at a nominal rate. The Government recognized early that there would be a cost to the necessary structural adjustment and had consequently instituted social support programmes to cushion some of these costs. It is therefore disappointing to find out that this lady from North Manchester has been allowed to suffer, although programmes are in place to deal with cases such as this. || Previous | Table of Contents | Next ||
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