New levies on electricity, water are a harbinger of inflationary pressures

Dear Editor,

The 2017 budget is a disaster for those languishing at the bottom of the food chain. First, it takes way more than it gives.  When analyzed, even cursorily, it is clear that the ordinary, regular working class citizen is going to be pummelled where it hurts the most, in the pocket.

I agree with the tax hikes on used tyres, alcohol, passports, and at the airports.  They are necessary and make for good sense; they are overdue.  In the next breath, there is so much with which to disagree, and which brings flinching.

The two per cent VAT reduction is swamped by the proposed tax additions to electricity and water bills.  I would argue that most law-abiding citizens consume more than the exempt amounts of ten thousand dollars and fifteen hundred dollars monthly for electricity and water respectively.  In terms of electricity, all it takes is one fridge and a few bulbs, and that threshold is exceeded.

As for water, I still struggle with the quantum of my own monthly bill, which is several multiples beyond that minimum, and which I have difficulty reconciling with believed usage.  Still, the bottom line is that that water minimum of fifteen hundred dollars monthly is easily passed with a few brief showers here and there, and a couple of pots of water to boil rice.  Therefore, I can see that this levy (both of them) is going to shrink the little people even further.

Further, using a tiny monthly breach through usage of the minimal figures for utilities, that amounts to approximately two thousand dollars in increased expenses, for a an aggregation of twenty-four thousand dollars annually.  The ‘savings’ from the two per cent VAT reduction and individual income tax exemptions at the lower levels will quickly evaporate and be lost.  This might be contested.

Moreover, and this is not contestable, I submit that the new levies on electricity and water will automatically translate into higher costs for businesses, which will then pass those on to consumers in the form of higher prices.  Because electricity and water (especially the former) are such vital components in a host of basic activities and items (think retail commerce and necessities for a start), these new taxes will hurt those most in need of help.

I foresee this as a harbinger of inflationary pressures, and representative of generalized pain to the poor and struggling for some time to come.  While I laud earmarked spending increases for the security and education sectors, I wish there was more to commend, as such relates to the lowly.

Instead of the 2017 budget bringing some cheers, it has prompted more tears, and the jeers that are already making the rounds.

It is for these very reasons now tabled and still unfolding that the abominations of that self-awarded fifty per cent pay hike and the level of a recent pension proposal are now seen as totally and unequivocally without merit, and hence inexcusable and unforgivable.

Yours faithfully,

GHK Lall