Dear Editor,
Reflecting on the huge budget, and the soaring inflation rate, the government should have raised the minimum wage, as well as social welfare assistance. Shamshun Mohamed (Feb 2) is correct in stating that the government promised $50K old age pension over a spread of five years, an increase of $25K. However, if they raised the pension $3k a year, it would not meet $50k in five years. In order to make $50k it would need to be raised $5k annually. Inflation has increased the cost of living, and that slow increase in pension is not livable. So in actuality, there is a real decline in the pension because even though the monetary amount increased, because of inflation, the value has decreased. The same holds true for NIS and the $70K minimum wage.
The minimum wage has been increased to $70K monthly but the increase has been wiped out by inflation. Whereas a year ago a family could try to make ends meet with $60K monthly, currently, $70K could barely provide ration to feed a family of four for two weeks. The value of the money has been wiped out by inflation, admittedly, not due to the government’s doing. The other two weeks, the family is forced to go on a fast. Government should raise the minimum wage to $80K and the old age pension to a minimum $50K now to account for inflation. Currently, sugar labourers are not guaranteed an average $80K monthly. Increasing the minimum wage would benefit them since they are at the bottom of the wage table.
Government should also reduce the tax burden. We are now an oil economy. The oil revenues should be used to help the lower class. Those earning less than $100K should be exempted from income tax and taxes should be reduced to minimal rate. Overall, the 33.3 percent tax rate should be brought down to about 15 or 20 percent for incomes of 100k or less per month. The progressive tax should apply to those earning much higher incomes. The personal income tax rate is too high for an oil economy. Taxation needs to be reformed to encourage investment as is done in most oil economies. For now, raise the minimum wage and social welfare payments to aid the poor.
Sincerely,
Dr. Vishnu Bandhu
Leader, URP