SHAW KNEW! – Parliament Records Show Finance Minister Was Told About Use Of Oil Money
It appears that Finance and Public Service Minister Audley Shaw’s explosive announcement that the money collected from a special tax on fuel was placed in the Consolidated Fund instead of a special fund set aside for that purpose should not have been such a shocker after all, in light of deliberations which took place in Parliament late last year.
Shaw and Prime Minister Andrew Holness had given a commitment in the run-up to the February 25 national polls that the money set aside for the oil hedge would be used by the Jamaica Labour Party administration to help fund a new tax policy to provide relief to hundreds of taxpayers.
But Shaw told a Private Sector Organisation President’s Forum last week that now that he has taken over the country’s purse strings he has found out that the money has been spent or otherwise budgeted.
“We had suggested that part of the payback of the $1.5 million tax break would be use of the tax on fuel that was supposed to be a special fund that was set aside,” Shaw told the forum.
“We have found that the oil hedge fund was not set aside, that it is actually already accounted for in the Consolidated Fund,” added Shaw.
Shaw Was Given Full Account
However, Hansard, the official verbatim records of Parliament, shows that during a sitting of the Lower House last September, Shaw, the then opposition spokesman on finance, was given a full account of what was being done with the money by then Finance Minister Dr Peter Phillips.
“The source of funding for the energy stabilisation and energy efficiency enhancement fund is the new fuel tax that has been imposed since April 2015. In the meantime, while the legislative amendments are
being undertaken, a sub-account of the Consolidated Fund has been established to receive the proceeds of the tax,” Hansard records Phillips as saying in response to questions from Shaw on September 29, 2015.
The Consolidated Fund is the principal government account in which revenues are deposited and expenditure financed by way of warrants.
Last week, Phillips echoed that line as he responded to the comments from Shaw about the money from the $7 per litre collected on fuel.
According to Phillips, the Energy Stabilisation Fund was still in the legislative drafting stage up to the point he left office after the February 25 general election.
Phillips said this explained why the Special Consumption Tax (SCT) money was being deposited in the Consolidated Fund.
“We indicated that we were using the funds for hedging and other purposes such as capital expenditures. Cabinet, in September, gave drafting instructions for the creation of a segregated fund, and so that process was under way,” added Phillips as he noted that approximately $3 billion from the SCT was used to finance oil hedges in July last year.
According to Phillips, the oil hedges were purchased with advanced sums that were being paid back with revenue from the SCT. Those sums, he said, were not expected to be recovered until this month.
“Everything came through the Consolidated Fund and it could only be spent for the purposes for which it was meant to be spent … which was to purchase the hedge and, in any event, $3 billion could not account for all that was to be done,” Phillips told The Gleaner.
In the meantime, Hugh Johnson, president of the Small Business Association of Jamaica (SBAJ), has declared that its members will be holding the Government to its promise of tax relief for persons earning up to $1.5 million.
“The association is adamant that this tax plan should be rolled out. When they (JLP) were questioned on it they emphasised that it would be done,” declared Johnson.
He said the association is surprised at the utterances of the finance minister, that the money he was expecting to fill that gap is not there.
“In many documentation, IMF documentation, presentation by the former minister of finance in Parliament, and even being the head of the Public Accounts Committee of Parliament … how could you miss that one?
“This one is alarming to us, that after so many presentations and arguments, you are now coming to say you thought it was there. That’s a terrible situation to find yourself in as a finance minister,” added Johnson.
“We’re still looking forward to the increase as was proposed,” the SBAJ head insisted.
But Shaw has already declared that the Government is committed to introducing the promised tax measure.
“It is firm and irrevocable, and my commitment is that even if it doesn’t start April 1, because of the budgetary process, it will at least be retroactive to April,” said Shaw.
Following a three-day Cabinet retreat last week, the Office of the Prime Minister (OPM) quoted Holness as underlining the commitment given by his finance minister.
“We are on track and it will be fully addressed in the presentation of the Budget,” OPM quoted the prime minister as saying.
During the election campaign, the JLP had said if elected to form the Government it would remove income tax for persons earning up to $1.5 million.
The party had said this would be financed from a reallocation of revenue from the SCT, improved collection of arrears, additional GCT from new spending, and a natural increase in pay-as-you-earn taxes.
so met, how you and the minions feel now that unu get con? Few months ago especially u did a kick up rumpos say Andrew and the Jamaica Liad Party is heaven sent to save Jamaica.
The free health and education no mention yet, no sound of the $8k minimum wage, and the IMF deal no drop yet!
Clown dem! I expect young people to get tricked from JLP. Not big old people wha deh bout from when JLP a do dem dirty deeds. Portia might not be good at public speaking(despite her degrees and academic achievements), but she was more for the people. This a jus the start of things to come. We pocket ago bleed fi fulfill da tax package deh.
@ slice bread good morning and happy sunday. We the minions (not speaking for Met because I never once heard her say she was a laboratorie) feel quite ok not believing we were “conned” but that the now government gave us hope. Hands down Jamaicans were tired of the PNP and they needed the rest, believe me when I say the JLP is not going to negate on their promises so calm down. As a matter a fact how you a gripe so and you never vote fi JLP, you a one a dem weh did want the tax break but you unemployed? GTFOH!!
Yeah we going to get the 18,000 at what expenise u great grand going to be paying for it. U best beg god do mek oil prices go up a deso w3 f**ked. I told u frist they going to sell NWC wait and see
Good morning to you @ 2 sugars and spoil milk.
hope you say? i see you guys get “hope” from blatant lies but criticize the other party progress as catastrophe. How did u come by that 1 seat margin as “hands down” change? No, what u meant to say: it was a con, “hands down”. How on earth is it logical to say they are “not going to” negate on their promise? Pull your head from out your a$$, for crying out loud, they already did. April 1st is gone, more than half the money that is to fund it is already set elsewhere, u gonna loan them the 8+ billion shortfall? or should i say the over 20B? They clearly say NO NEW TAX will be added to fund it so please, don’t even go there…
Unemployed? ha! don’t go assuming things now
It is funny how many people are watching and debating. I like this progress we are stepping up to achieve prosperity. Thank you minions and big old people for marking your x and giving me a “fool fool” young person a chance at seeing and hearing objective governance.
Only a fool lean on his own misunderstanding
This is what I have been saying here; the man is either incompetent or he is a liar. This is a serious credibility concern.
Pro…..easy wid dem “degree” talk de, unless Sista P have feeva.
A lot of things the PNP did promise and until now the promises not full fill so wat some a dem never work from dem born but dem did expect fi get tax return just bcuz dem luv hands out and licky licky ..
@ little willie, let’s not talk about her academic accomplishments, because you, like many other Jamaicans, spew out a lot, not knowing her background and that she went to Harvard. She’s however not a good speaker. Some ppl, like even miself, tun eediot in front a crowd.
@coldfire, dat u call it? objective governance? lol.
@anonymous, the PNP does make promises, but theirs are more realistic. Portia made a promise last election to renegotiate with the IMF. She took an entire year to do it because the IMF was totally done with Jamaica because of the JLP. A PNP had to put Jamaica back in the good books with them. A the uninformed, fool fool articulate minority vote in JLP and has given JA a death sentence. Memba Holness say f**k IMF, mek we see how dat turn out nuh.
Pro….when you are allowed to sit in at a lecture and given a certificate of attendance does not equate to a “degree”. When “you” “attend” an online course from some correspondence, unaccredited “university” does not equate to Sista P being educated. She is however a brilliant politician as it relates to our system. Never under God’s sun would she be elected to any office of government if it were a requirement for her to put forward something substantial. Sorry but yu can keep Sista P and har pap dung JEEP. Crash program work recycled.
@Pro… are you a dual citizen?
She does have a Bachelor’s Degree. Not an easy feat for a so called “illiterate” person. And mi nave no dual citizenship mi born a yard n nah lef ya. visit foreign regularly but nah go nuh whey go live. mi dehya long enough fi know dat JLP is the worst thing for Jamaica. Honestly both parties are corrupt, but JLP is more of a criminal and conniving party, what makes it worse is they fight everything a poor man does to survive. Since dem win, dem already start go round a scrape vendors(same eediot dem wha vote fi dem) offa the streets.