With a gigantic deficit of at least JD1.4 billion on our back, it seems that pointing out the country is drowning in debt is simply an understatement these days. While some are asking where that money actually went, the natural government reaction is of course to tax the people who are already struggling to make ends meet. Yes, perhaps one of the better policies to emerge in recent times was the decision not to tax incomes under 1,000JDs and that is arguably representative of the vast majority of Jordanians whose income is no where near that figure. However, in lieu of this taxation, one’s income is taxed on pretty much everything that moves under the Sun. From staple goods like rice, sugar, coffee and tea to blood. Yes, blood. You know that joke that the only thing left for the government to tax is air, well I’m pretty sure that it’s not only true these days, but that there are probably policies in place that tax air as well, framed nicely as an environmental policy.
When times are financially tough, households will always tighten their belts. This is a natural reaction of the people. If you suddenly make less, or if you suddenly have to pay more for what your dinar is worth – then tightening the belt is in order. In other words, when times are tough people look to their own households (or purses) to put things in order. The higher and more comprehensive the taxation, the greater the tightening, which of course is a natural reaction that never helps a government climb out of debt, especially when it needs people to spend and thus fuel the machinery that is the national economy.
However, the important part here is that the people look to themselves first, usually because they have no other option. The government seems to rarely do that. When economic plans are announced regarding addressing the deficit, they usually involve new taxes. But how many times has the government announced that it will look to tighten its own belt? I would argue that it is a rare occurrence. In the past 12 months, while new taxes are introduced some of the biggest cases of corruption have appeared and then, ever so promptly, disappeared – never to be heard from again. Were they resolved? Was the money, which at times stood in the millions, ever recovered? Corruption, it seems, continues to be on the rise in the public sector and this is just judging by the amount of press coverage it has received in the past year alone. It is an industry that represent millions upon millions of dinars leaking through a public sector in shambles. If one is drowning in a sea of debt does he not look to at least attempt to plug the holes in his own boat first?
What about over-expenditure? What about mis-expenditure? Is the government in a position to do some self-reflection and determine what it does and doesn’t need in terms of its own expenditures? Based purely on observation, every year it seems we see government officials being driven in the absolute latest Mercedes or SUV – and this is despite the presence of a policy determined to encourage the purchase of hybrid cars. Do these vehicles alone not represent millions – do their consumption of fuel (which comes out of the taxpayer’s pocket) not represent millions?
Or how about the state-owned Jordan Television, which somehow manages to house 1,850 employees, 300 of whom are just gardeners; 150 of whom are just drivers. If the minimum wage of JD150 is applied here (just as an example) then those 300 gardeners represent JD45,000 monthly, or JD540,000 annually. The 150 drivers represent JD270,000 annually. This is just in one public institution. I’m not calling on everyone to be fired, I’m simply asking if JTV needs 300 gardeners and/or 150 drivers?
The list goes on and on, and I’m sure if one simply analyzed the cabinet’s budget for the year they’d see unnecessary expenditure at a time when belts require tightening. It is actually in the government’s interest to tighten its own belt simply because it not only costs it a whole lot less than taxing the people, but because getting people to spend will inevitably yield higher returns a la the multiplier effect.