Economist Roger Hosein isn’t convinced that the wage subsidy suggested by the United National Congress is the best way to reignite the economy.
UNC Political Leader Kamla Persad-Bissessar announced her party’s plan to implement the subsidy as a means to re-employ many who lost jobs because of the COVID-19 pandemic.
The subsidy would see the Government pay a portion of the salary of workers.
Similar subsidies have been implemented in Canada and New Zealand.
“Personally I wouldn’t have gone that route, I would have gone the route of using the same money to create new jobs that can generate export, non-energy export revenues.
“You see if we subsidise wages further it will increase transfers for the period of the COVID, it will increase transfers and also it means that we are encouraging production in the same areas that we had in February 2020,” said Hosein.
He added: “I’m not sure that in February 2020 our non-energy export sector was performing as we would have liked.
As a consequence, I would have used some of the same money and encouraged production in areas that can help generate export revenues for this country.”
Hosein said more focus should be placed on developing industries which generate export revenue outside the energy sector.
This, he said, could be aided by focusing on the improving the ease of doing business in the country, which could help more businesses, local and foreign, develop in this country.
He also said he would not be in favour of another UNC promise of tax reduction on certain food items.
“The thing is those are the types of things that sound very nice on the election platform. I don’t know that we should be lowering VAT at this point in time.
“The Government needs the available revenues that it collects from the vat tax and also the vat also has the ability to capture some review from those who don’t pay income tax so I wouldn’t rush off into lowering the VAT rate at this point in time,” he said.
