Resolving the budget conundrum

20131229ramkarranThe Chief Justice’s decision in the budget case will not necessarily lead to what Opposition Leader David Granger, said might be a “car crash” or “unintended consequences.” If the government and opposition extrapolate from the Chief Justice’s conclusions, a budget can be produced.

Stripping away the complexities from the Chief Justice’s analysis, a procedure can be discerned for approval of a budget. Based on his ruling, the opposition cannot cut or reduce, but may withhold its approval, for specific items in the budget.  Upon the conclusion of the consideration of the estimates, during which the opposition will no doubt withhold approval for substantial portions of it, the Minister of Finance can then submit amended estimates of a reduced sum to take account of the exclusion of those portions of the items, or sub-items, which the opposition does not support. The Appropriation Bill will then reflect the amended estimates and will therefore obtain opposition support. This is procedurally feasible and requires no negotiations.

Here is what will happen as a result of the decision: The estimates for the Ministry of Works contain, say, an item under roads for $500 million. Each item usually contains sub-items of expenditure which are not usually listed in detail or at all. Upon questioning by members, it is revealed that under the item there are five roads to be repaired at $100 million each. The opposition has a problem with one road but cannot cut or reduce the estimate by $100 million according to the Chief Justice’s decision.  It has to withhold approval for the entire item of $500 million affecting all five roads, four of which it has no problem with. The opposition is forced to do this in relation to all the items it has problems with. If the sub-items are listed, that makes it easier. If the sub-items cannot be easily quantified by unit price, such as in the case of sub-items under the item of fuel, it becomes a bit more difficult, but not impossible. In the end a substantial portion of the budget will not be approved, the government will not be able to function and elections will be the likely result.

Here is how the situation can be retrieved: The assumption is made that the government can survive with a reduction of say $20 billion, which is the amount by which the last estimates were cut. If this is the approximate figure by which the opposition will be likely to reduce the estimates on this occasion, the Minister of Finance will have a clear indication of what are all the sub-items the opposition would have wished to cut or reduce, when the deliberations are over in the Committee of Supply. For example, in the case of the roads it will be known that the opposition has a problem with only one road costing $100 million and not the entire item.

At the end of the debate the Minister could either discuss and come to an agreement with the opposition on the amount by which items of the estimates are to be reduced. This may be unlikely because of the incomprehensibly bad relations between the government and opposition. The Minister could also withdraw the estimates and substitute an amended, that is, a reduced version, in line with the opposition’s views. Alternatively, the Standing Orders can be suspended and the Minister there and then can propose the necessary amendments to the estimates.  When the amended estimates are approved by the National Assembly, the Appropriation Bill will be amended by the Minister to reflect the reduced estimates as presented by the Minister and supported by the opposition. Such an approach would not violate the Standing Orders or the decision of the Chief Justice. The question that is put by the Speaker at the end of the debate on an item – “I put the question that Item … stand part of the estimates” – will not have to change. A ‘yes’ answer will be construed as ‘approved’ and a ‘no’ answer as ‘not approved.’

To achieve this the government will have to accept the reality that non-approval of whole items will take place which will then require the adjustment of the individual sub-item or sub-items within each item, to take into account the actual concerns of the opposition. The government reduced the Appropriation Bill last year to take account of reduced estimates. On this occasion it would amend the estimates first, then the Appropriation Bill.

Therefore, a premature return to the electorate need not ensue. And because both government and opposition have been equally affected by having to work out and apply new and additional procedures in dealing with the estimates and arriving at a budget, it cannot be argued that the decision objectively favours the government or hinders the opposition, or vice versa.

While a final decision is being awaited from the Court of Appeal or the Caribbean Court of Justice, if there is an appeal to the latter, the budget conundrum can be resolved.

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LUCAS STOCK INDEXThe Lucas Stock Index (LSI) rose 0.54 per cent during the third period of trading in June 2016. The stocks of six companies were traded with 79,573 shares changing hands. There were three Climbers and one Tumbler. The stocks of Banks DIH (DIH) rose 1.98 per cent on the sale of 18,757 while the stocks of Demerara Distillers Limited (DDL) rose 5.26 per cent on the sale of 41,667 shares. In addition, the stocks of Demerara Tobacco Company (DTC) rose 1.51 per cent on the sale of 13,603 shares. In contrast, the stocks of Demerara Bank Limited (DBL) fell 5.26 per cent on the sale of 4,324 shares.  In the meanwhile, the stocks of Guyana Bank for Trade and Industry (BTI) and Republic Bank Limited (RBL) remained unchanged on the sale of 222 and 1,000 shares respectively.

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