Since the introduction of the 16% Value-Added Tax (VAT), through which the government earns billions in revenue annually, the PPP/C administration has presented a series of austere budgets, which offer virtually no relief to the poorest of the poor in the country.
With its stagnating income tax threshold, 33.3% income tax, meagre 5% per annum pay hikes for public servants and ridiculously low $7,500 old age pension and $5,500 public assistance per month, it would appear that the government is running a very tight ship. Given that it touts decreased debt repayments one wonders whether the government wouldn’t turn a profit if it prepared a profit and loss account. But perhaps not, considering the wastage of resources that occurs when one project has to be redone over and over again owing to bungling.
After years of the same-old, same-old, Budget Day, tomorrow, has once again become much anticipated because of the new configuration in Parliament of a minority government and a one-seat majority joint opposition. In the run-up to the November 28 general and regional elections, VAT was one of the most talked about issues, both on the hustings and by the people in the street. Almost every citizen quizzed said they wanted a reduction in the crushing 16%; and both opposition parties—APNU and AFC—promised that they would reduce VAT. The AFC had promised that if it won, it would lower VAT to 12%, while APNU had said that VAT could be lowered to 10%.
Not to be outdone, the party then and still in power promised that VAT would be “looked at.” Citizens will naturally expect that tomorrow’s national budget delivers on that promise.
The opposition parties had also said during the campaign season, that they would raise the income tax threshold if elected to office. APNU had declared that it would increase the threshold to $100,000, while AFC had said it would be taken up to at least $50,000 and that it would reduce the income tax from 33.3% to 25%.
The PPP/C had not made any specific promises with regard to income tax. Unfortunately, however, the promise it did make—that consultations would be held with the opposition with regard to the national budget—went out the window after it felt wronged by the opposition in the matter of the election of the Speaker and Deputy Speaker of the National Assembly.
Old age pension and public assistance were increased last year from the horrific $6,600 and $4,900 to the grudging $7,500 and $5,500 respectively. The pension works out to around $250 a day, while the public assistance is around $183 – scandalously and woefully inadequate especially when one considers that the World Bank rates as in extreme poverty persons whose income is US$1.25 and under a day. At the current exchange rate, old age pensioners would have to find an extra $3 to meet the US$1.25.
The AFC had promised to raise the old age pension by 100%; still very low but certainly less beggarly than it is now, particularly given that it is the only source of income for some.
The question in the minds of the ordinary folk now is whether the budget will also reflect the will of the people. Will it show that the government is aware that the rules of the game have changed by including some of the measures the opposition wanted addressed? Will it be a ‘government budget’ as it has been in the past or will it be a people’s budget? In less than 24 hours, all will be known.