Shadow Finance Minister Carl Greenidge opened the debate on the 2012 budget yesterday calling for the government to reduce VAT in stages and to increase public service wages, saying that the administration would be able to find the money once it reins in improper spending.
He also called out the Donald Ramotar government for allocating a $6 billion subsidy in the $192.8B budget for the Guyana Power and Light Company (GPL) at the same time that it is moving to end the subsidy to the people of Linden.
“When the Minister rose to [present the Budget for 2012], there were no prizes to be had for predicting that it was going to be largely self-congratulatory and back slapping. Few would have been brave enough at that time to bet on the balance that would have been struck on the distribution of the benefits of recent growth which the government has been signalling for so long,” Greenidge told the National Assembly, adding that it was a missed opportunity to address some of the more glaring needs of the country.
“When one looks at the measures [of the budget], they are so mean in many ways that it is not really worth the time. I think that the Income Tax threshold move is a most welcome one. It is, however, not sufficient,” he said. “The question of VAT and its reduction in stages is one that I would commend to the government. Not only had the government committed itself to implementing a rate that was not a net increase intake, but it also is a heavy burden to taxpayers…” he said.
Greenidge also argued for the need for tax relief measures in addition to the relief provided to pensioners and recipients of public assistance, saying special tax exemptions for elders could have easily been handled by the government in light of its increase in revenues. He called it unfortunate that government could not find a way to give more to those persons who would have served their country long and well and are vulnerable in the context of the difficulties that they encounter today.
He also called for the government to reduce the toll on the Berbice Bridge, saying it is hurting businesses and students.
Greenidge also said that public service wages need to be increased across the board in conjunction with a set of measures to reform the public service, in line with the recommendations submitted by consultants retained by the government. He also made a call for the government to restore collective bargaining in the public service and to adopt international standards.
“In addition to that there should be an increase of 20 percent in the minimum wage in the first instance,” Greenidge said. “Mr. Speaker, I urge the Minister to revisit these matters and I would urge him to undertake at least a doubling of the old age pension, which is what the APNU would have done.”
He also said that there is need for an intense programme that would address employment both in the short and long term, while adding that this programme should be associated with projects to restore infrastructure and to enhance the environment and to provide employment to persons in depressed communities.
The need for there to be careful management of the National Insurance Scheme was also emphasised and Greenidge said that all of the recommendations by the actuaries and by reform committees and other bodies seemed to have been ignored by the government. “In the longer term, we believe that the Scheme needs to be made more comprehensive… it needs to be widened so that it can be a social security and insurance scheme,” he added.
Addressing how reduced taxes, wage increases and greater public relief could be financed, Greenidge said that stamping out the abuse of government finances is the key. According to him, the biggest challenge in Guyana is the abuse of power with regard to revenue and he spoke about the abuse of the Lotto Funds, for which he said Finance Minister Ashni Singh has failed to commission an investigation. “These are areas for which, if we do our work properly, resources can be released to fund pensioners and sorely needed projects and initiatives for the poor,” he explained.
He called for the Public Procurement Commission to be established to ensure better procurement. He called also for fewer white elephants, “including those that may emanate from the Ministry of Natural Resources and the Environment.”
Greenidge also expressed concern that after the government set aside $4 billion for GuySuCo and $6 billion for the GPL, there has been no discussion on whether the companies would be more efficient even after the injection of funds. He also questioned government’s planned withdrawal of the electricity subsidy to Linden, while providing a subsidy to the people of other parts of the country. “It is unacceptable to have this asymmetrical treatment of different communities, especially when one is a depressed community in the first place,” he said.
“The economic and financial goals and targets pursued by the PPP Government under Mr. Bharrat Jagdeo have increasingly been the object of criticism because they have been characterised as growth without employment, growing income disparities and the related and contentious issues of corruption and abuse of power,” he added. He called the part of the budget theme that speaks of “prosperity for all” a tongue in cheek afterthought. “The worsening of income distribution at the personal and community level in this country is very plain for all to see,” Greenidge said, noting that the top 20 percent of income earners in Guyana account for between 47 percent and 60 percent of income, while the bottom 20 percent account for less than seven percent.
He also noted Minister Singh’s reference to tripartite consultations in his budget speech and said they had not produced much. “In fact, the five months of meetings have yielded very little, except committees which conveniently divert urgent matters to bodies. Two such bodies are the budget committees and the tax review committee. In the case of the latter, the President appointed, without consultation, a distinguished industrialist and that industrialist’s accountant as two of the committee’s three members. Apparently, that committee is yet to meet and we have been informed that it was never intended to report prior to the laying of the 2012 budget,” Greenidge said.
He did admit that he was pleased to receive a copy of the Official Gazette No. 20 of 2012, in which the Ministry of Natural Resources and the Environment has been made a budget agency under the Fiscal Management and Accountability Act. “I am delighted that at least that consultation, although not official, has yielded fruit, even though I am sure it was not the intention to give us any credit for it,” he said.
The debate will continue up to Monday, after which the House will consider the estimates before considering approval of the Appropriations Bill for the passage of the budget.