It is difficult to argue with the specific measures announced in the Budget Speech, including the transfers to the poor. But we need to understand that such transfers are mere palliatives, not unlike the relief measures under the Social Impact Amelioration Programme (SIMAP for the older folks) which provided social support to ease the harsh consequences of the Economic Recovery Programme, including the termination of employment of thousands of workers.
Transfer payments, helpful as they are and necessary in the short term, do not constitute economic policies. Some of them – such as the part-time work in nearby Government offices – may even counterproductive. Given the ad hoc nature of that Scheme, it is unlikely that the Government offices obtain any real benefits or that the individuals become more employable as a result.
And of course, this Programme is tainted by the fact that it excludes Region 4.
The Budget 2023 measures are fewer than they were in 2022 and some continued the measures from earlier years. The actual numbers establish that Guyana is now an oil economy with all the attendant implications. It does not need renegotiation for the government take to increase. It needs better administration on which the government has promised but not delivered. Out of 102 lifts or cargoes, Guyana has earned 13 or less than 13%. That is supposed to represent Guyana’s minimum share of 121/2% of profit and 2% of gross production as royalties.
Instead of meaningfully regulating the sector and the oil companies, we have now entered into side agreements with Exxon for the gas-to-shore project and Hess carbon credits. Despite the high-powered resources at its disposal, the Government would not even commit the feasibility studies on major projects. If the Government does not consider studies for such projects, it is unlikely that all the Government-administered projects receive anything more than anecdotal consideration.
Pandering to the private sector, the Government refuses to deal with the private sector minimum wage which must act as a deterrent to productivity. It is not accidental that none of the submissions by the private sector organisations address this question of minimum wage even though privately the top brass of these bodies and companies all admit to its complete inadequacy.
Responding to the private sector submission on the financial market, the Minister announced that there will be a convening of stakeholders to identify practical actions that can be taken to promote capital market development. The truth is that the private sector is unwilling to accept any form of regulation unless it is done with sanctions in law, as in the case of the Corporate Governance Code published under the Financial Institutions Act. There can hardly be a capital market where our leading private sector companies are opposed to any Codes of Good Corporate Governance and where there are grounded suspicions of market manipulation.
Over the past two years, large segments of the self-employed sub-sector of the private sector appear to have granted themselves a tax holiday, no doubt aided and abetted by tax accountants. Over $9 billion has been allocated in the 2023 Budget to the Guyana Revenue Authority but for some reason, it seems unable to collect more than 20% of the tax estimated payable by the self-employed. We have sat for almost 20 years in addressing the question of presumptive tax. It is time that we revisit it.
And let us not deceive ourselves: those people are no more mindful to observe the money laundering laws and the bribery and other laws.
The Budget was presented against the background of as bad a relationship between the government and the opposition in any administration, as may have ever existed. The National Assembly has not delivered on its mandate and to describe its output as poor would be an understatement. Unfortunately, instead of civil society stepping in, its inactivity and silence are regrettable.
After thirty-three years of Budget Focus, Ram & McRae is tired of repeating essentially the same thing about the public sector financial architecture, including the Fiscal Management and Accountability Act, the budget process itself, the contents of the budget speech and accountability by accounting officers. Reporting by ministers to the National Assembly seems to be more an exception than the rule. These issues do not need a consultancy, they need common sense and the will to change.
It is not that no progress is being made. Rather, they are being done so slowly that by the time they are done, the action is overtaken by events, as with the much delayed the private sector minimum wage.
No doubt that the many poor among us would welcome the transfer payments to making their lives less challenging and painful. But the loudest support for the budget has come from the main private sector organisation, including the PSC, the GMSA, the GCCI and a new kid on the block, the Region Three Private Sector Inc. Apart from the prosaic and lofty language in the three statements, it is striking that the Budget did not deliver on maybe 90% of the items in the wish list submitted by the PSC, the GMSA and the GCCI to the Minister for Budget 2023.
