FOOD PRICE REDUCTION

The initiative, announced last week by Minister Conrad Enill, follows closely on the increase in the personal tax allowance this year to $60,000 which has added to the after tax incomes of residents. For example, a resident with an annual income of, say, $75,000 can today take home approximately $730 a month more than he did last year, purely from lower taxes. Any lowering of the cost of living would be the proverbial icing on the cake.

Enill though did not spell out what the Government had in mind. But Government can, for example, reduce tariffs on imports, particularly those from within the Caribbean Community and/or waive a percentage of the offloading of storage charges.

When Enill announced that Government was contemplating a strategy that could lower the levels of headline inflation, he might have been thinking of working within the measures outlined above.

But even as Government admits the need to seek the reduction in the cost of living, it is faced with the problem, that in reducing the cost of landed food the measures it introduces may act as a disincentive to the development of domestic agriculture and that of the domestic canning industry.

Any benefits flowing however, from the proposed move on reducing food prices, would have a positive impact on taxpayers’ pockets. And any meaningful increase in disposable income could provide for additional investments in shares offered on the Stock Exchange and in units of the UTC.

In turn, the anticipated growth in take home after tax can encourage not only the expansion of existing businesses but the starting up of new enterprises and lead to greater employment opportunities and a strengthening of our economy.

What is clear here is that it would be unwise to assume that not all will see in the additional after tax incomes a chance either to invest or to save.

The Government is caught between the proverbial Scylla and Charybdis. If it fails to formulate and implement measures aimed at reducing the cost of living there can be the perception of a lack of concern. In addition, if it introduces such measures as the lowering of Customs duties, offloading and storage charges then it can stifle needed growth both in domestic agriculture and food processing and with them employment opportunities. Either way, it must act and quickly.