The Georgetown Chamber of Commerce and Industry says that adequate monitoring mechanisms should be in place prior to budgeted monies being handed over to the various initiatives outlined in the 2014 budget.
The GCCI held a press briefing on Friday to discuss the budget.
President of the GCCI, Clinton Urling stated that the chamber was pleased with the social programmes contained to assist struggling families. He hailed the $10,000 education allowance, but stated that “government will have to find appropriate mechanisms to ensure that the funds allocated reach its intended targets and that the monies once received by the family, is spent for the purpose intended.”
He stated that the government had to consider the logistical issues prior to implantation and the resource issues that may arise in the monitoring phase.
Urling stated that the $2 billion initiative may require additional funds for implementation and monitoring. He did state that the money could have been allocated to increase teacher salaries as that would have be far easier to implement as the structures in place to increase salaries already exist.
Urling said that the allocated sum being used to increase teacher salaries or even the salaries of members of the police force could have been far cheaper in execution.
During the 2014 budget speech, Finance Minister Dr Ashni Singh revealed that for every child in the public school system, parents will receive an annual allowance of $10,000; the initiative is expected to benefit over 188,000 families.
The GCCI president stated that it was not only the education allowance that would need mechanisms in place for execution and monitoring but also the $6 billion intended for the Guyana Sugar Corporation. Urling stated that “an annual Government subsidy to GUYSCO is an unsustainable strategy and measures would have to be put in place to diversify the products manufactured by the entity.”
He said GuySuCo had to seriously diversify products. He contended that energy, confectionaries, molasses and animal feed were ways to expand the current industry, adding that “underperforming estates can be sold or offered at concessionary rental to multinational firms looking to invest and set up their manufacturing and industrial operations.”
Urling pointed out that semi privatization would absorb employment that was lost during the closure of the underperforming estates. He said that while the subsidy was not sustainable, given the current state of the industry, it was necessary.
Urling said that it was not just the sugar sector that had to think about value added and overlapping of sectors in a broader sense, but also aviation which he said could have been given a larger budget for the development of hinterland airstrips necessary to grow both the mining and tourism sector. He said the dredging of the Demerara Harbour was vital to continued import and export activity, but in the future more money had to be allocated.
Urling said that the chamber would have wanted corporate tax to drop by 5%. He added that the PAYE tax should have also been reduced.
“Last year, as a result of the 3 1/3 percent reduction in this rate, the economy lost around $1 Billion in revenues. The government could have further reduced that rate another 3 1/3 percent and look at other ways of offsetting the revenues lost.”
Urling argued that reducing corporate tax and reducing high tariffs on imported meats could save billions in disposable income. Urling noted that foreign direct investment dropped by US$79 million in 2013 and remittances into the country also decreased by US$141 million.
The GCCI president called for a comprehensive tax reform programme for the government to be guided by. He said that “this proposal should be shared with the entire population so that everyone knows what to anticipate over a number of years as it relates to tax reform.”