Gov't stands by JUTC fare reduction policy

 

The government says it remains committed to its Jamaica Urban Transit Company (JUTC) fare reduction policy.

 

Finance Minister Dr. Nigel Clarke says the government is pleased that tens of thousands of Jamaicans who rely on the JUTC are benefitting from the reduction, the first phase of which took effect on January 1.

 

His comment comes despite an admission by the Bank of Jamaica that the two-part lowering of fares on the state-run bus company would not have the desired effect on tempering inflation.

 

The BOJ's statement was followed by sharp criticism from the parliamentary opposition, with Shadow Finance Minister Julian Robinson calling the reduction a "bad policy decision", adding that there were other options that could have been explored to cushion the effects of inflation.

 

But speaking Friday afternoon, Dr. Clarke said the government stands by its decision.

 

"The Cabinet deliberated and upon the conclusion of consultations with the Minister of Transport, it was agreed that a reprieve for the commuters on the JUTC would be necessary and productive," he insisted. 

 

"There are 100 buses that are scheduled to arrive in the middle of this year. And we believe that the fare reduction in the meantime and going beyond that time frame offers some level of relief to members of the travelling public," the minister said, adding that the government is happy it had the opportunity to implement the "historic" policy. 

 

Regular adult fares on JUTC buses were temporarily reduced from $100 to $70 on January 1 and will be further reduced to $50 in April, for a total 24-month period.

 

In a statement Friday afternoon, the BOJ said it took full responsibility for advising the Finance Minister that the two-part reduction in JUTC fares would cushion the impact of increase in public passenger vehicle fares.

 

PPV fares were increased last October and will again be increased this April. 

 

In response, Shadow Finance Minister Julian Robinson has maintained that despite the BOJ taking responsibility, the implementation of policy is the duty of cabinet and the executive.

 

He added that when advice on policy is received, this must be carefully scrutinised by the cabinet.

 

"I've seen this release from the BOJ, but ultimately the Minister has to take responsibility for the implementation of the policy, which was a bad policy. Without even having all the data, it must have been apparent that JUTC, which only supplies a very small percentage of the travelling public, only in the Kingston Metropolitan Area, could not have such a significant impact on inflation."

 

Mr. Robinson said there are other options the Finance Minister could explore in seeking to cushion the effects of inflation. 

 

"For example, the hedge tax is something that is available to the Minister that he could look at if he wants to cushion the crisis and other things," he proposed. 

 

The opposition spokesman said the government's decision has caused a further worsening of the financial status of the JUTC which is projected to lose $16 billion this financial year.