THE Opposition is urging the Government to take measures to protect small businesses, which will take a hard hit if they are not cushioned from the economic fallout which is certain to result from the novel coronavirus disease (COVID-19) outbreak.
Making his budget presentation in the House of Representatives yesterday, following a raft of fiscal measures to help businesses and workers announced by Finance Minister Dr Nigel Clarke, Dr Phillips suggested that a line of credit should be provided to small businesses through the Development Bank of Jamaica.
Dr Phillips said another problem will be presented when people have to take sick leave which, in some instances, will require the entire amount of pay due to them in a given period.
“A business doesn’t expect more than one per cent of its workers to fall ill at any one time. In this situation you’re likely to face a situation where 10 per cent or more may be falling ill at the same time, so the business has to pay out up to 15 days of pay for sick leave, and depending on the operation it may need to hire temporary workers, at the same time demand is cutting into their revenues. There should be some window where a line of credit can be extended to these small business operators to deal specifically with the problem of workers,” he expounded.
The opposition leader said some businesses could go out of operation unless they receive support. He also noted that the quarantine restrictions announced by the Government, although advisable, will put pressure on retail operations such as barbers, hairdressers and other similarly scaled entities.
At the same time, he urged the Government to move to protect some categories of contract workers in quarantined areas who are at risk of losing their jobs due to absence from work. He suggested that the authorities could have dialogue with their employers where possible to ensure that they are not dismissed.
Dr Phillips also asked the Government to consider temporary suspension of the general consumption tax (GCT) on over-the-counter drugs which can be used to treat the symptoms of the virus, such as paracetamol, and others.
He said the Opposition acknowledges that large businesses — such as those in the tourism sector, many of which are highly indebted — will feel the economic brunt of the COVID-19 outbreak as well.
“The banks seem to have been responsive, but again the Government needs to recognise that there is a national interest, whether it’s by facilitating a dialogue or Bank of Jamaica using its leverage… the problem (from large businesses) filters down,” he said.
Furthermore, he said, the Government could look at a one-month moratorium on National Housing Trust mortgages.
Pensioners are another concern for the Opposition, Dr Phillips said, as many of the elderly are unable to stock up on supplies like the rest of the population.
He said the labour ministry should take immediate steps to enable early encashment of pension cheques for the period up to May.
He said NIGold insurance coverage for senior citizens, which is now at $5,000 per annum, should be bumped up.
“We are in for a rough ride as economic contraction grips the Jamaican economy,” he said, arguing that an extensive set of fiscal policies will have to be implemented, as, despite those already outlined by the finance minister, the Government is not yet able to quantify the cost and effects of COVID-19 on the country at this time. He said all the measures put forward by the Opposition are possible with creative examination of the budget, while being fiscally responsible.
SOURCE:
BY ALPHEA SAUNDERS
Senior staff reporter
saundersa@jamaicaobserver.com
Wednesday, March 18, 2020