Budget passed

…$37.4B lighter

Avoiding a showdown that could have triggered general elections, the National Assembly last evening passed an appropriation bill for government’s 2014 budget, after APNU and the AFC chopped $22.4 billion from the Finance Ministry’s planned capital expenditure on the last day of consideration of the estimates.

The amount cut last night accounted for the ministry’s entire capital expenditure for “Policy and Administration” and the largest single cut ever made by the parliamentary opposition, which targeted the still contentious Amaila Falls Hydroelectric Project, citing concerns over $18.5 billion provided to fund the stalled project.

Amidst speculation that government might have refused to put the amended Appropriation Bill before the National Assembly and instead move for general elections, Finance Minister Ashni Singh subsequently moved for the amended bill to be put to the House, which passed it.

Speaker Raphael Trotman said that by his count, some $37.4 billion was cut from the estimates, bringing the $220 billion budget originally proposed by government down to $182.6 billion. It should be noted that the overall cuts for 2014 exceeds the amounts cut in 2012 ($21 billion), and in 2013 ($31 billion).

During a press briefing at Parliament after the National Assembly adjourned, Singh said he and his team will have to conduct consultations to determine the way forward. He was at the time responding to a question on government’s intention to restore cut allocations as was done previously.

The minister told members of the press that both the constitution and the recent decision of the Chief Justice in relation to the 2012 cuts have to be studied and taken into consideration along with the advice of Legal Affairs Minister Anil Nandlall before government makes a decision on restoring the amounts removed. Nandlall, who was also at the briefing, said that the decision is one for Cabinet to make, although his legal advice will be influential.

Both men argued that while the issue of the restoration of funds was important, the overarching issue is the negative signal Guyana sent to international investors.

APNU and the AFC voted against the Finance Ministry allocation primarily because they opposed funds intended for the stalled Amaila Falls Hydroelectric Project, and amounts allocated for the Amerindian Development Fund.

AFC Leader Khemraj Ramjattan first raised concerns over allocations for the Amaila project. He reminded Singh of the AFC’s promise to support the project only after the party has had the benefit of scrutinising the feasibility study being undertaken by the Inter-American Development Bank (IDB). He therefore urged Singh to wait until the study, which the minister said should be out by the third quarter of this year. Greenidge also urged Singh to wait on the feasibility study, although he reiterated APNU’s position that the contract with Sithe Global remained one of several other issues.

Sensing the combined opposition’s adverse posture to allocations for the project, Singh began to plead. He promised to make all requested documents available to the opposition for their scrutiny and to re-engage the parties in talks, if only they would vote to pass the allocations for the project. He also told the Committee of Supply that passing the amounts allocated for Amaila will send a positive message to financiers, including those involved in the project, that there is consensus on the project.

Further, the minister said it was not proper order to require international bodies to give their approval to a domestic project before a decision is made at home. Both APNU and the AFC, however, remained unconvinced and so the proposed allocation for the project was voted against.

Also of concern to the opposition parties were allocations intended to facilitate development in Amerindian communities. APNU MP Joseph Harmon raised concerns that the finances might not have been properly utilised in prior years, and he asked for a detailed description of how the amount was spent. Singh entertained Harmon’s request, and revealed that prior year amounts were spent to develop capacity and competence in areas, including beekeeping, aquaculture, cash-crop farming, the growing of cassava, and other activities. Areas that benefitted include Three Brothers, Upper Demerara-Berbice; St Cuthbert’s Mission, Demerara-Mahaica; and Annai Central, North Rupununi.

Since the amounts specific to the Amaila Falls Project and the Amerindian Development Fund could not be cut in isolation, the opposition parties were forced to vote against the entire amount of $22.3 billion provided for capital expenditure.

 Collateral Damage

A host of other undertakings will be affected by the decision. For instance, the ministry proposed a $450 million allocation for the provision of student loans for persons unable to pay cash to attend the University of Guyana (UG). This amount has been cut. Government Whip Gail Teixeira made the point during the press conference that it is the opposition parties which are denying the university money when it is in need.

Also cut as a result of the decision last night was $725 million intended to for Poverty Reduction. According to the programme details, the amount was to be used to “provide support for the vulnerable groups through community development programmes and projects.”

In addition, a $795 million allocation intended to facilitate projects under the 6th and 7th Basic Needs Trust Fund (BNTF) were also cut. The projects were aimed at implementing programmes to develop the provision of education, health services, roads, water supply and skills training.

In each of the two preceding years when cuts were made to the budget by the opposition, the government mostly nullified these.

Last night’s passage of the third budget of the Ramotar administration brought an end to 13 gruelling days of consideration of the March 24th budget speech and estimates – seven on the speech itself and six for the estimates. It is now likely to see stepped up demands for the government to convene local government elections this year.

 

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