Dear Editor,

Sincere gratitude to the former government for initiating the stimulus package, and thanks to the current government for maintaining it. The rationale for a stimulus is clear: government pump money into the market economy to keep businesses and labor income running and consumer spending flowing. These flows are crucial to keep the economy functional.

Without trying to dilute the necessity for stimuli during economic downturn, I wish to highlight two weaknesses in the current implementation plan of the stimulus package. First, the Employment Stabilization Payment is unfair because it is compensating unproductivity i.e. employees receive a salary in exchange for no-service.

No work no pay! (With all due respect to those who lost their jobs, I don’t hate anyone, I’m simply raising a point on the impact of the stimulus package on the overall economic performance).

Two, the universal approach to exempt taxes and school fees to all citizens is over-generous. Not everyone has lost their income from COVID-19 or TC Harold and thus tax and fees exemption should be restricted to individuals who lost their job or income.

Is there a better way to spend the Employment Stabilization Payment? Yes, there is.

Rather than compensating unproductivity, Government should direct the stimulus package towards spending on building new classrooms (to accommodate the social-distancing in public schools), repairing government housing, schools and other infrastructure in all six provinces.

Government spending in these public infrastructures will have greater impact than the current Employment Stabilization Payment scheme as it will still contribute to economic growth in line with the intention of the stimulus package.

People will get paid for doing something productive and suppliers will get paid for supplying material for the projects. Further, the government will have some good quality infrastructure in place when things return to normal and after the stimulus package ends.

Food for thought.

Simon Tiwok

(NB: The author is employed at RBV, but the views expressed here are personal and may not necessarily reflect that of the institution).

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