PNP polling mirage

Dr. Peter Phillips – former Minister of Finance

The PNP rise united and one PNP team are in a desert and seeing a massive mirage but tell their supporters that the prize is at hand, nothing could be further from the truth, as they can’t tell them of the Tsunami ahead.
According to the Bill Johnson polls, the PNP headed by Peter Phillips will do a better job than Bunting in the next general election. Johnson points to a factor of the majority of persons saying the country is going in the wrong direction, a sure sign the JLP should be concerned. History is not kind to Johnson’s words. In 2016, ahead of the General election, “Certainly, at this stage, it is going to be an orange sky on election night rather than a green sky,” pollster Bill Johnson commented after his recent national poll found the PNP four percentage points ahead of the Jamaica Labour Party, The Gleaner reported. “The movement definitely appears to be an orange movement and not a green movement,” said Johnson. “Everything seems to be pointing in the direction of a strong PNP victory,” he added.
No such development took place, as the election ended with a narrow defeat for the PNP. But Johnson is not alone, poll results posted on February 22 showed, “the party standings in the latest RJR Group/Don Anderson polls show the governing People’s National Party (PNP) still ahead of the Jamaica Labour Party (JLP) but by only three percent, as against four percent one month ago.”
Polls taken well ahead of an election is not a very accurate indicator of the outcome. Polls taken when one party is very active and the other is not will be highly biased towards the active one.
Two factors in the Johnson polls that are questionable. Jamaica has not seen a voter turnout close to 70 percent since the 1980s so any poll with that level of likely turnout has several persons lying to the pollsters as the turnout is unlikely to exceed 55 percent. In the last general election, it was under 50 percent. The other error is that the feedback that the country is going in the wrong direction is a variance with several other factors in the country. It does not accord with business and consumer confidence levels that are at record levels. It does not conform to record levels of employment and record low levels of unemployment and most importantly, it is at a huge variable with the best predictor of election a year out, the Jamaica Stock Exchange performance. The latter is calling the next general election with its robust performance.
By the way, with both the Anderson and Johnson polls showing the JLP ahead how will the PNP heal the wound created by the leadership challenge before Prime Minister Holness takes advantage of it?

Interest saved cuts Phillips’ cost by $10B

Peter PhillipsPeter Phillips’ assertion that there will be a near $9 billion cut in the 2015/16 budget might have come as a shock to the country already reeling from the pains of severe economic adjustments but much of the work has already be done with a sharp $4.7 billion cut in interest payments to August.
The savings works out at more than $10 billion for the full year and might be even more with Treasury bill rate continuing to fall as such the Minister’s work seems a mere formality of recognizing that interest cost was over estimated in the first place and not for the first time.
Up to August, apart from the big drop in interest cost capital expenditure was underspent buy $4 billion with just spent out of the $16.3 billion budgeted for the 5 months period. The wages bill was underspent by $3.4 billion with just $$67.9 billion spent out of $71.3 planned. Other areas of recurrent expenditure saw arise of $1.4 billion above budget.

Collector of Taxes office, Constant Spring, Kingston.

Collector of Taxes office, Constant Spring, Kingston.

Tax revenues that were almost $3 billion ahead of target to July saw an erosion to August to an increase of $1.66 billion while overall revenues were off by $1.33 billion due mainly to $1 billion shortfall in grants. Corporate taxes jumped sharply by 27 percent over budget to contribute to the increase revenues while PAYE is down by 2 percent from budget.
Government borrowed $14 billion less in the local market than budgeted taking only $5.8 billion in new funds as opposed to almost $20 billion planned. But they borrowed $255 billion on the foreign side versus $59 billion planned but paid out $180 billion more than budgeted.

Tax Inflows up cost down for GOJ

Phillips pulling in revenues ahead of target and holding on cost.

Phillips pulling in revenues ahead of target and holding on cost.

Lower borrowing cost and big increases of $3.3 billion over forecast for General consumption and special consumption taxes on local and imported items, helped to push revenues for May and April above budget by $1.3 billion, in spite of a shortfall of $1 billion in grants and a $345 million in the bauxite levy.
Expenditure is down by $3.76 billion, with reduced spend on capital expenditure accounting for $2.1 billion, interest $571 million and other programmed expenditure of $1 billion. Programmed expenditure savings, may include amounts budgeted for wage increases but not yet paid and may be purely a timing issue than a real savings.
Taxes280x150Government borrowed $13 billion less than forecast, paid out $1.7 billion more than budgeted and that should result in a reduction in interest cost going forward. Overall, the Fiscal deficit for the two month period, is $5 less that budgeted and pushed the overall deficit to $11.5 billion down from $16.5 billion planned.
The wage bill is $27 billion for the two months. A settlement of 5 percent for the year would add $8 billion to the cost, but government would get taxes direct and indirect form its payment. The longer the parties take to settle the less costly it will be for the government, or the easier it will become to pay a higher amount, but there is a matter of year two to contend with as well.

Phillips & Wynter kill inflation in Jamaica

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Many Jamaicans may be feeling the negative effect of the economic pressures the country is undergoing. One area in which it is seen, is the official data on inflation as the overall measure of consumer price movements, went virtually nowhere, in June.Peter Phillips
Inflation in Jamaica is set to hit the lowest level, in years if the trend for the first six months of the year continues. According to data put out by the Statistical Institute of Jamaica, the inflation rate for June is 0.1 percent, when compared to the index for May 2014. This is 0.9 percentage points lower, than the 1.0 percent recorded for May this year. The lower movement was mainly due, to a decline in the cost of electricity which resulted in the index for the group ‘Electricity, Gas and Other Fuels’ moving down by 4.2 percent. This fall was tempered by an increase of 3.6 percent, due to an increase in the cost of water. Food and Non-Alcoholic Beverages rose by 0.6 percent. Upward movement in the prices of ‘Meat, ‘Milk, Cheese and Eggs’ and ‘Bread and Cereals’ were the chief contributors.
The movement in the index for June 2014 resulted in a calendar year- to-date inflation rate of 2.5 percent.
Mean quarterly inflation rate for the second quarter of 2014 was 1.1 percent, 0.3 percentage points lower than the first quarter which had an inflation rate of 1.4 percent.