Welcoming the measures in the 2014 budget, the Private Sector Commission (PSC) yesterday said it believed that continued growth will be stimulated.
The PSC however said it believed that the time had come for the gradual removal of all electricity subsidies and for those monies to be invested in social services. This year’s budget includes $6.9B in subsidies for power generation.
The PSC said it believes that the measures in the 2014 Budget will foster continued growth and is pleased at the social allocations including the increase in old age pensions and the $10,000 per annum cash grant to parents of school aged children in public schools.
“While the provisions for a 50% increase in the annual electricity subsidy for pensioners will undoubtedly provide much needed assistance to the elderly, the Private Sector Commission believes that the time has come for the gradual removal of all electricity subsidies and that those funds are invested in social services in particular old age pensions, so that pensioners would have no difficulty in paying their electricity bills, there would be a level playing field for all consumers and energy conservation measures would more readily be adopted”, the PSC said.
It added that low cost energy with reduced dependence on fluctuating commodity prices for imported fuel is vital to the development of the manufacturing sector in Guyana, job creation and the quality of life across the economy.
The PSC said it therefore welcomed Government’s commitment to take all necessary steps to ensure the completion of the Amaila Falls Hydropower Project and, in the interim, for maintenance and improvement of the power distribution systems.
The private sector is also chuffed at the allocation of $1 billion for cleaning up the country and particularly the $500 million for Georgetown. It says, however, that in order for the funds to be effectively used, there must be “energetic municipal leadership committed to improving the environment, this in turn requires that the enabling framework is in place including structural strengthening of the local municipalities.”
The assigning of $1 billion for entrepreneurship in rural communities is gratifying, the PSC said, since the greatest boost to the economy will flow from motivated entrepreneurs who can contribute to job creation and offer incentives to our young people.
The private sector also expressed happiness at the $100 million for technical and other assessments for the dredging of the mouth of the Demerara River.
“The dredging of the Harbour will have a direct and positive impact on the competitiveness of our exports since freight charges will be significantly reduced. This will undoubtedly have a spin-off effect on the economy. Reduced freight charges will also benefit Guyanese consumers by making imports less expensive”, the PSC said.
The PSC has for years been attempting to have the government invest in the dredging of the river mouth but it has not happened. The cost for doing this will still likely have to be shared between the government and the private sector.
The private sector lauded the $7.7 billion earmarked for rural and hinterland roads and was also pleased at the $231.1 million for the rehabilitation and maintenance of interior airstrips.
Plans for the setting up of a hospitality institute at a cost of US$4 million also found favour with the PSC as it says it will be encouraging to the tourism sector which the PSC said was fast assuming a more important role in the economy.
“Although the Commission would have liked to see more incentives being provided for the tourism industry, it is convinced that a hospitality institute will have a positive impact on both the numbers of returning visitors as well as Guyana’s rating by international travel operators. In the latter regard, branded hotels such as the Marriott, which will open shortly, will provide a boost for business as well as tourist travel to Guyana and, in the medium term as experienced in many other countries, will impact positively on the fortunes of the smaller domestically owned facilities, in part by establishing high quality standards across the hospitality sector”, the PSC asserted.
While the other-agriculture sector has improved, the private sector said it would like to see improvement to the veterinary and plant health facilities so that exports can be certified to international standards. New US rules could pose problems for local exporters.
The PSC voiced satisfaction that no new taxes have been introduced particularly in the context of the tax reductions the Commission had sought and which were instituted in the preceding years, except for the Property Tax which has escalated for most companies since the movement to 2011 property values.
“The Commission, however, feels that much more has to be done to increase the level of collections of revenue from those who evade taxation so that the burden on the salaried employee can be eased and so that a thorough review of the capacity of the NIS is also undertaken to ensure proper regulation and collection from the non-traditional sectors”, the PSC declared.
It said it was also heartened at the announcement in the budget of a growth rate of 5.2% for 2013. It said that the fact that this figure was achieved in the face of weak performance by primary commodities “demonstrates that the economy is diversifying and becoming less dependent on the traditional pillars, agriculture and the primary extractive industries.”