Opposition Leader, Bharrat Jagdeo yesterday continued his scathing attack on the 2017 budget and said Wednesday’s revelations in parliament about the controversial D’Urban park project were scandalous and the facility could end up with a $1.2b price tag.
He told the media yesterday at Parliament that a budget is about policies and their impact on people and the country… Not a collection of numbers or this speech that anybody could read.”
He said too that Minister of Finance, Winston Jordan never sat in a room where policy was discussed. He said too that the minister did not respond to concerns that were raised about the budget.
Jagdeo said the “miners have been saying that the budget would kill mining… He did not respond to the miners, except to criticize the private sector. He said there would be an increase in disposable income and then he put four taxes on disposable income…When you take tax from people you decrease their disposable income.”
According to Jagdeo, Jordan played a three-card trick game regarding the VAT and that while the APNU+AFC government has fulfilled its election manifesto by reducing the rate from 16 to 14 percent, based on the minister’s numbers, it is collecting $13B more.
He had pointed out in the budget [debate] that the number is underestimated because even from the government’s side they would probably have another $12B. He believes that $25B more than they did last year, would be collected when the total VAT collection was $35B.
“That’s not a 25 percent increase, it’s not a 38 percent increase… it is close to 70 percent increase in the taxes… I pointed out that 92 percent of national investment would be financed from domestic savings… Do you know the impact of this? In 2017, it is up by 50 percent in 2014”
The Opposition Leader highlighted that “two things it tells you; it tells you that foreign direct investment is not coming in and two, that after two or three years of doing this, the balance of payments would get taxed, the private sector would be crowded out in interest rates, which would go up because the government is competing for funds in the local capital market and the exchange rate would depreciate significantly…”
Jagdeo pointed out too that the ministry said there would be measures to increase disposable income of public servants but it did not announce a salary increase for 2017.
From the opposition’s assessment, it looks like public servants would benefit from a five percent increase in 2017.
He said the minister “got so much battering and he then comes in and throws this $25,000 tax free allowance at the end of the year.”
Although Jordan is saying that there is no fiscal space for the increase, Jagdeo said he had argued that the cost of the controversial Charlestown drug bond per year is twice the size of the capital budget for health in region four. He said too that it is also more than the entire capital budget for Region Six.
Referring to the D’Urban Park Development Project, Jagdeo said an “unbelievable scandal” was exposed in parliament on Wednesday evening.
“They started off that this project would cost the nation no money, people had enormous goodwill for the government, they will build the stadium, they will donate… We move from that now to $400M in the first instance, then it moved to $150M, then to $400M” that parliament approved from tax payers money.
He said Minister of Public Infrastructure David Patterson could not provide information to the House, saying initially that it was a private company but now says in parliament that the same company, Homestretch Development Inc. (HDI), needed $500M to pay off its expenses.
Jagdeo noted that there has been no public tender for the project even though $900M of tax payers’ money is involved. Holding up a copy of a list of creditors that the HDI owes, Jagdeo said if the money is added, the liabilities of the company are over $800M.
He anticipates that the ministry would return to parliament for another $300M and said the project would run tax payers into $1.2B at a minimum.
He said a list of names of people who donated was also available but two companies that donated told him their names were not mentioned.
Jagdeo believes that there was corruption in listing the donors and in the lack of a tendering process.
Meanwhile, he said the government was criticizing the PPP but asked what they had to do with it saying that “even if we messed up in the past we did not table a budget that would raise taxes on prescription drugs, doctors’ consultation fees or children’s education or basic food items or water and electricity….”
