I had high hopes for this plan. I really did. Then I see the first bullet point.

$48K per year to each household for basic utilities?

So GOJ will now partially subsidize utilities? Why would that be a good use of GOJ funds?

There is so much wrong with this.

//Mini-Thread https://twitter.com/damioncrawford/status/1298740443644080128

One of the major problems with Jamaica over the years is the notion that GOJ will give you freeness.

It is that mindset that led NWC to have “Non-Revenue Water” at 70%+ about a decade ago.

Ie out of all of the water NWC produces and sends to customers less than 30%...

was revenue generating.

Now it is up to 70%, thank God. Still a ways to go, but much better than a decade ago.

I discussed this in other threads many times. Here is one such example https://twitter.com/marcgayle/status/1281349765930913797

So my major concern with this point is that it will further foster a dependence on GOJ to pay the bills.

That will only make life worse for the utilities because compliance is likely to fall because ppl will know they can pressure GOJ to lean on the utilities.

That doesn’t work because that will just lead to more cronyism and ultimately corruption.

This is just a very bad model, anyway you slice it.

GOJ shouldn’t be paying ppl’s bills. They should create the environment for companies to be formed or to expand and hire ppl or....

increase wages. That’s the role of govt. Not to become a Nanny State.

The logical conclusion for this plan is that the state will end up having to “bail out” the utility companies because compliance rates drop through the floor.

So GOJ will borrow money to plug the hole...

in the utilities financials, all because of a subsidy.

GOJ should also be encouraging ppl to build catchment facilities at their home and alternative energy so ppl consume less and are more efficient with their usage and consumption.

When GOJ subsidizes it...

there is less personal responsibility so the temptation to waste goes through the roof, which leads to more strain on the entire network (both JPS & NWC) which leads to more disruptions.

Those disruptions will lead to more maintenance costs and upgrades required....but...

with compliance rates falling (ie receivables increasing) due to less customers paying and paying on time, their financial position will deteriorate and they will not be able to afford to maintain their networks and crucially make new investments to drive efficiency.

A much better approach is just reducing income tax and indirect tax rates (GCT, Customs Duties, SCT, etc.).

Then let ppl decide how they spend the savings from those.

This not it. This is not how you help create wealth.

This is how you create dependence.

Btw, I haven’t even actually done the calculations of what it would cost (which is likely to be hefty) and how that would fit within the context of falling GOJ revenues.

But I couldn’t even get past the above issues to even begin start looking at the feasibility of it.