Economist calls for gov't to publish expected savings from cost-cutting measures

 

 

Economist Janiel McEwan is in support of the government's cost-saving measures, but not the execution, which he describes as dangerously incomplete.

 

Last week, the government announced a suspension on non-essential official overseas travel across the public sector until the end of March next year.

 

On Monday, it was revealed that public sector entities have been instructed to put on hold the acquisition of assets, new lease arrangements and hotel retreats.

 

Mr. McEwan says the government should publish the revenue it expects to save from these measures.

 

He says anything less is an announcement, not a strategy. 

 

"My position is independent. I'm not defending the government or endorsing the opposition. I'm asking for measurement. Publish the baseline, publish the net savings, not just the gross announcement. Publish what is being protected and report quarterly. That is how a restructure becomes a strategy," he argued.

 

Mr. McEwan agreed that the tightening of government expenditure should become the standard.

 

"Some of this pressure was foreseeable. Revenue was already below budget and recurrent spending was already running below budget before the hurricane. That is why I agree with economist Keenan Falconer; identifying cost-saving measures should be routine, not an emergency response. He is right to urge government towards zero-based budgeting, where every dollar must be justified from scratch each budget cycle. That is the institutional reform that would make the next crisis easier to manage because the map of low value spending would already exist," asserted the economist.

 

Mr. McEwan said the lease for the headquarters of the National Reconstruction and Resilience Authority (NaRRA) should not be affected by the new cost-saving directive from the government.

 

"The cost questions should not be used to undermine the reconstruction effort. This is an unprecedented rebuilding programme and NaRRA needs the capacity to deliver it. But unprecedented reconstruction does not mean unquestioned expenditure. The government has defended the J$115 million annual lease and the $40 million CEO salary by pointing to international benchmarking and the scale of the mandate. That defence may be valid, but it must be public not asserted. The government should publish the lease term, the cost comparison and the five-year operating budget, so the public can see that this money is being used well," he urged.