…”good life”, an “elusive dream” to most, a reality for a “select few”
Budget measures will fulfil “ good life for all Guyanese” – Minister Gaskin
By Edward Layne
As the week-long debate on the 2016 National Budget commenced, People’s Progressive Party/Civic (PPP/C) Member of Parliament (MP) Irfaan Ali has declared that the “good life” is just for a select few.
Ali, who opened the debate on Monday afternoon, declared that with Budget 2016, poor Guyanese are poorer while the rich are becoming richer.
“The “good life” is an illusion for most and a reality for a ‘select few’. If you are a Minister definitely, you would have enjoyed the ‘good life’. The contract workers are richer today with the handsome payouts as reflected by the $3.7 billion paid out for this category of workers. However, the pensioners, poor families, rice farmers, sugar workers, and public servants are yet to enjoy the ‘good life’. Unfortunately, Budget 2016 will not deliver the ‘good life’ for these Guyanese,” Ali said.
The former Commerce Minister (acting) chastised the Government for the “penance” being offered to the poor in spite of lofty promises by the coalition while on the campaign trail ahead of the May 2015 General Election.
“The sugar workers were not rewarded for their outstanding performance last year, but will have to cope with the closure of some of the estates, regardless of the outcome of the CoI. The rice farmers were crippled with lower prices last year and will have to deal with their problems since ‘rice is not government business’. The reduction in VAT will not come in 2016, but we will have to pay more indirect taxes in the form of increased licence fees that will cripple the poor man and small businesses. The poor will have to pay substantially more for vehicles,” Ali told the House in a passionate presentation.
He maintained that the Budget was aimed at providing benefits for a select few, while placing heavy burdens on the already impoverished, singling out contract workers who will benefit from an allocation of over $9 billion compared with $3.7 billion in 2015, new vehicle importers, and those who should be rewarded for their “contribution or investment” in the political parties.
Ali said while Finance Minister Winston Jordan indicated that confidence was restored and more investments were made last year – including the numerous investments GO-Invest facilitated – and highlighted the potential value of the investments, he fell way short of speaking directly about the actual investments and the number of new employment opportunities that originated from these investments.
Ali highlighted that Foreign Direct Investment (FDI) for 2015 was US$125 million, significantly below the target of US$217 million and half the size of the FDI reported in 2014.
“Mr Speaker, it is instructive to note that FDI for 2015 was below the levels reported over the past five years, even 2011 when we had elections and the global economy was in turmoil. The excuse for the lower investment cannot be blamed on election or the downturn in the global economy,” Ali stated.
According to the former Minister, in terms of the business climate and investors’ confidence, the FDI is not the only indicator which suggests the economy is “slipping and sliding downwards”, as the non-performing loans also tell the story better about what is really happening in the local Private Sector.
“According to the Bank of Guyana Third Quarter Statistical Bulletin for 2015, the non-performing loans of business enterprises exploded as businesses struggled to meet their loans payment … Mr Speaker, what we have, is not an expansion of the Private Sector but contraction. Even more worrying is the situation where the banking system is saddled with “toxic loans” that would serve to dissuade lending to the Private Sector. Unless the Government intervenes, we may very well have a financial and economic crisis that will cost billions to escape and magnify the current economic crisis brewing,” he noted.
Ali said given the economic conditions, responsible leaders would take pre-emptive action instead of hiding their heads in the sand and hoodwinking the public with “fancy speeches that are muddled with half-truths”.
Sound macroeconomic management
He said that any responsible government would have ensured the successful implementation of the public sector investment programme, as a countercyclical measure to halt the decline in the economy and stimulate spending.
“We are in this economic quandary because of the decision by the coalition Government to stall the public sector investment programme which contributes approximately one percentage point to economic growth and cushion external shock. In short, our coalition Government induced a slowdown in the economy by cutting back on capital spending when the economy was on the decline. This is not sound economic management,” Ali stated.
Turning his attention to the Budget measures, Ali again took the Government to task for promoting special interests while increasing the tax burden on the poor, adding that after almost one year in office, Guyanese would have expected measures in the Budget that would serve to fulfil coalition promises. Ali highlighted the fact that the Government exempted a few measly items from VAT, instead of fulfilling its promise of a reduction in the VAT, while meagrely increasing the income tax threshold.
He also spoke of the ban on used motor vehicles older than eight years, as well as the extensive range of measures to tax the nation further by increasing the fees paid for various licences, including drivers’ licences; fitness; motor vehicle licences; licences for carts drawn by horse, pony, donkey, mule and liquor licences.
Breach of social contract
“The failure to fulfil these promises is a breach of the social contract between the coalition Government and those who voted it into office,” Ali said, adding that the benefits for the poor are “a few hundred dollars more to the pensioners, a few twenty dollars for the vehicle owners”.
Meanwhile, Business Minister Dominic Gaskin, in countering Ali’s arguments, said he commended the measures in the Budget, which he said would protect the revenue base of the State from threats of depletion, thus enabling Government to fulfil its promise of delivering a good life for all Guyanese.
Speaking to the issue of tax compliance, Gaskin said that the new measures outlined would ensure small businesses became tax compliant.
Speaking directly to measures relating to the Business Ministry, Gaskin announced that the Ministry would provide training support for some 4000 small businesses during 2016.
Through this training, the Minister said, small business owners are expected to be better positioned to better manage their financial and other affairs, as well as better understand the country’s tax laws.
He added that there would also be provision of more loans for small businesses.
Gaskin also promised support, through the $668 million allocated for the Business Ministry, for the Bureau of Statistics and GO-Invest among other agencies under the Ministry.