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Raffique Shah


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Wild consumerism will lead
us into the valley of debt

December 04, 2005
By Raffique Shah

COME January 2006, when the new income tax structure kicks in, those among us who earn $60,000 or less per annum, will find ourselves with more disposable income-which means, literally, more money to spend. In fact, the across-the-board 25 per cent tax-regime will add spending-dollar-fuel to the consumer-driven fire that has always been with us, but never more than it is today. So if, on the one hand, ordinary folks are looking forward to fatter wallets, merchants are eagerly awaiting the opportunity to ease our back-pocket burdens through wanton consumerism.

In other words, through what may be perceived to be Prime Minister Patrick Manning's generosity, we as a people are being set up for a fall so hard, most of us will be lucky if we have on pants to dust off and walk away to live another day. I know many will brand me a prophet of doom, one who never sees anything good in what any government does. Some may see in me a "sourpuss" who can curdle fresh milk. And yet others will think I suffer with a permanent gripe. I have never been one to run from battle, nor am I one to dismiss criticism of my thoughts. But, friends, Trinis, countrymen, lend me an ear or your attention.

For starters, more than 50 per cent of the nation's workforce will not benefit from this progressive move (and I do see both tax measures as being progressive). The reason is simple. Over the past decade-plus, except for a small number of graduates at the technical and tertiary levels of our education system, almost everyone else, CXC-pass-holders et al, earn less than $5,000 per month. In fact, the majority earn barely more than the minimum wage, which stands at $2,000 per month. All those people who serve you at fast-foods restaurants, at supermarkets and stores, not to add those who are with the URP or CEPEP, how much do you think they earn? Many of them cannot afford to buy basics at their very places of employment.

Outside of this loop, too, are the seemingly growing numbers of poverty stricken people. Can you imagine, in this country where $800,000 Jaguar limousines and $5 million mansions sell almost like hot-croissants (well, it can't be hops!), a woman is discovered living in an abandoned old car with her child? Or that a Mercedes-driving young man crashes into a dirty river only to be rescued by a man whose family lives in ramshackle conditions on the river bank?

If we care, if we dare peek beyond our manicured lawns and fences, and look along the "old train lines", or peek behind bamboo groves, we find citizens eking out their existence in the most horrible conditions.

So already we have a serious poverty problem with very little in place to deal with the destitute. I know Ministers Christine Kangaloo and Joan Yuille-Williams will assure me that they are doing their best to alleviate poverty. And I don't doubt them. I know their hearts are in the right place. But the society is so structured that, much the way we have cocaine addicts, the social safety net is beyond the reach of many more, children included, who do not know where their next meals will come from, or if they will eat at all. If anything, instead of spending billions on a "Waterfront" project that will add aesthetics to a dying city, or on a stadium that will produce a handful of Laras or Yorkes or Boldons, the PM should have voted much more money for poverty eradication.

But that is only one problem. Another "biggie" that will face us is the spending spree that many middle-income earners are likely to engage in when their January cheques dazzle them. I am not arguing that people should not enjoy their money: hell, they worked for it. But consumerism is a deadly sin that is today threatening developed countries as richly endowed as the USA and the UK. Personal debt in the US has climbed to over the trillion dollar mark, and in the UK they saw more bankruptcies this year than ever before. The lure of credit card spending has reduced people of reasonable means to debt-aholics.

We, too, are destined to go down that road because the government does not believe it has a responsibility to guide the nation in relation to people's spending habits, or, conversely, towards thrift. The nation's banks are least attractive in this regard, and many finance houses are little better. The rates they offer on savings encourage people to spend. Even the Unit Trust, once a beacon of hope for the small income earner, is itself a victim of global financial forces. Clearly, we need to become innovative, to open up new avenues through which our people can invest their disposable incomes to enjoy higher standards of living come tomorrow.