Budget Focus welcomes the early presentation of the 2016 Budget and looks forward to the practise to the early years of independence when budgets were prepared before the end of the year. Unlike Budget 2015, Budget 2016 is a full year budget and will require continuous management by the Minister and his team.
There is a substantial deficit in the budget and the projections are quite ambitious but yet realisable much will depend on the Revenue Authority returning to normalcy in a year when it is likely to be distracted by a Forensic Audit and for the first time in its existence will be without a substantive Commissioner General and deputy Commissioner General. It will have to contend too with the practice by the Government of acting outside of the tax laws such as tax free overtime in the bauxite industry and tax free payments to public employees. That is not only unlawful, it is also discriminatory and therefore a violation of the Constitution. Finally it has to walk the thin line of pursuing businessmen who give “gifts” to the Police and to the Government for more than altruistic and patriotic reasons. Of course it would help if the practice of inviting such gifts is discouraged and discontinued.
We note that while the budget is the largest ever, it also reflects a massive deficit the Ministry will have to consider the extent to which the Government becomes the sole investors and the nature and sources of investments. We note too that despite increasing sums allocated to social expenditure, the results have so far been unsatisfactory as measured by the Socio-Economic Indicators appended to the Budget Speech. Clearly money is not the solution.
It is regrettable that the largest Budget ever, of which a huge chunk is for capital expenditure, will probably operate in the absence of the constitutionally mandated Public Procurement Commission for which only a nominal $1,000 is provided in the Budget. At least on this it would be hoped that we can have some cohesion.
While the Budget is large it is not particularly generous, if we ignore the substantial sums of remissions which have passed under the radar but which amount to approximately fifty billion dollars per year. Can one imagine the uproar from the Private Sector Commission if half that sum were to be gifted to employed persons? The question is the capacity of the Government to execute the capital programme to ensure value for money.
Transfer payments are another issue which the Government will have to confront sooner rather than later. The cost is rising at what appears to be an unsustainable rate. What is worse is that a significant portion of the Old Age pension is paid outside of the statutory framework.
GuySuCo continues to be a headache for the country. The report of the Commission of Inquiry is welcome but the Government has made it clear that the Commission’s recommendations are “not gospel”. The cost and consequences of closing the Wales Estate are deferred for a while longer but even so, the remaining parts of GuySuCo will continue to need huge subventions.
For the next year or two, there will be budgetary support from Government companies and statutory bodies outside of a proper, certain and defined framework. We recommend that he brings to Cabinet recommendations on a policy for Government companies, and statutory bodies which collect tax revenues but which are not explicitly required to pay over those moneys to the Consolidated Fund.
Hopefully, sooner rather than later the Minister will be addressing the report of the Tax Reform Committee. Assuming that Cabinet supports any of the recommendations, these will have to be sold to the public. That will require not only capacity but political will.
We have to express our disappointment on the question of Contact Employees which continue to increase in number and cost. This is not healthy for our democracy and places a strain on Article 38 G of the Constitution which requires the public service to be free from political influence. By way of example, Agency 05 Ministry of the Presidency reports an increase in contract employees from 298 to 505. Given the revelation of ghost employees under the former administration, we expected a significant reduction.
We repeat that this is not a problem peculiar to the present Administration. The abuse started under the Jagdeo Presidency and continued under the Ramotar Administration. Between 2011 and 2016 the expenditure on contract employees will have risen from $5,274 million to $11,230 million. This makes a mockery of the idea of the Public Service Commission and approved appointments, the hallmarks of good human resource management in the public service. We sincerely believe that President Granger has the authority to end this abuse. We look to him to act on the matter.
We have noted under Who Gets What in 2016 what we believe is an omission in the Budget regarding the Fiscal Transfers Act. This is key to the functioning of the Local Government system as it provides the finances to the newly elected bodies in the upcoming Local Government Elections.
Finally, it is Guyana’s 50th for which $300 million has been provided. Hopefully in the midst of all the celebration, there will be a time for reflection, for considering what might have been, where we went wrong and what needs to be done now.
