Gareth Manning, Sunday Gleaner Writer

SECTOR LEADERS have expressed mixed views about the impact of the Government's stimulus package, announced last December.

In the wake of the global economic fallout, Government outlined a number of strategies to shore up the local economy, including alleviating the economic burden on small-industry operators.

President of the Jamaica Hotel and Tourist Association (JHTA), Wayne Cummings, says the Government's move to cut the sector's 8.5 per cent general consumption tax (GCT) by half for the remaining six months has eased a heavy burden on many in the tourism sector.

Cash flow

"It has been extremely helpful ... ," Cummings says, "... because one of the problems that the hotel sector has is a lack of cash flow, mainly because of how we collect money: the forward bookings are made and you wait for people to travel before you collect your funds," he conti-nues. He says the cash flow in many hotels has been drying up because bookings were down during October and November and rates had to be severely reduced when business eventually picked up.

"With those GCT savings of 50 per cent, some hotels were able to make their payrolls, as many of them could not get loans, bridge financing and so on," Cummings says. He adds that others have been able to pump more money into marketing and advertising as a result of the tax break.

There have also been few or no complaints about the disbursement of the $500 million loan funding made available to the sector to augment the low cash flow - a signal that most are satisfied with the disbursement processes, Cummings reasons, even though it is not yet clear how much of the funds have been taken up by the hotels.

"In my industry, when you don't hear a complaint about something, it means something is going well," remarks Cummings.

But small-business operators are not expressing as much joy over the stimulus package as their counterparts in the hotel sector.

President of the Small Business Association of Jamaica (SBAJ), Edward ChinMook, is incensed that many small enterprises are still unable to access loans provided through the stimulus package.

Three sets of loans valuing a total of $650 million were made available to the sector by Government through the Development Bank of Jamaica, and disbursed by the Jamaica National Small Business Loans Limited, credit unions and the Jamaica Business Development Centre (JBDC).

Bureaucratic bungling

ChinMook admits some businesses have been going to the named lending institutions unprepared - without businesses plans or prepared accounting information - expecting to take out loans; but the financial institutions themselves, he says, are also blocking access to the funds, with bureaucratic bungling.

"The JBDC says they have received 400 applications, of which they have only approved 25," discloses ChinMook.

But what seems to have peeved the small-business sector the most, particularly those involved in manufacturing, is the slow pace of implementing the promised 15 per cent of government contracts reserved for local small producers.

A framework is still not in position, the SBAJ says, to effect the measure; neither is there one to effect a promised 10 per cent margin of preference to manufacturers seeking government contracts.

"We are still at the table with the Ministry of Finance and the policy directors and we have not come to an agreement yet," SBAJ director, Dr Meredith Derby, tells The Sunday Gleaner. "We have proposed something, but now it is for them to decide if they want to go with it."