Practical financial management by the Government

Dec 14, 2008 Features / Columnists

Just in case the critics have not noticed, the price of gasoline and diesel has been slashed to levels they had not seen in five years. These prices are very low; so low that one would expect a further reduction in transportation costs.

When the price of fuel dropped below the $1,000 per gallon mark the government set out to hold minibus operators to their promise.

They had said that they would hike their prices once the cost of fuel passed the $1,000 mark. Despite appeals, when that price was reached, they did and, while the travelling public was unhappy, the members understood.

It was with this in mind that the government sought to have the owners and operators lower their fares when the prices fell. Today they should lower the cost of transportation even more, because the price is almost one-half of what it was six weeks ago when those prices went down for the first time.

The prices of other commodities have also fallen and the people are beginning to enjoy the benefits because the government recognises that everyone appreciates an increase in spending power.

There are no price controls. In truth and fact, it is left to the wholesalers to determine at which price they would retail their goods.

While this is happening, the government has done nothing to cut or to withhold payment of the cost-of-living increase it offered workers when the world appeared to go crazy and the price of everything soared to unprecedented heights.

This payment is costing the government millions of dollars and the money has to come from some source. The source is export duties, taxes and savings.

The government, as is the case in many countries, could have allowed the market forces, when the prices went through the roof, to determine how people live, and the doctrine of the survival of the fittest would have come into effect.

However, life for the Guyana Government is more than leaving people to their own devices. It is about creating conditions for all so that the country could develop.

The critics seem to forget that the government, in addition to the cost-of-living increase, paid workers an across-the-board increase in wages and salaries which, when taken in tandem with the cost-of-living increase, represents a more than seven percent hike on wages and salaries.

But there are those who now say that the government should pay the workers even more; they feel that there should be the customary pay increase at this time of the year, forgetting that when such payouts were made, they represented failed talks between the government and the trade unions.

When those payouts were made the critics were quick to blame the government for imposing its will on the people. On one occasion, the Guyana Public Service Union actually said that it would ask its members to refuse the “arbitrary payout”.

When it realised that it was harbouring a pipe dream, that union changed its tune to having the people take the money and then take strike action.

It is interesting that the people did not strike because they knew that the government was doing its best for them. They recognised that the government was not compelled to pay them anything until the wage talks were completed.

A caring government, however, does not act that way, so the government kept paying the increases each year, regardless of the state of affairs of the talks. Today there are mumblings from the critics about the non-payment of increases at this time of the year.

If the people received the increase when the prices were very high earlier and they are now benefiting from falling prices, then it stands to reason that they are in fact enjoying a further increase in pay, if only because they are required to spend less on items as a result of efforts by the government to ensure that the benefits of lower prices are passed on to the very workers.

Pay increases are consequent upon inflation – as inflation rises the people need money to cushion the effect. If the prices fall then there is no need for pay increases. In any case, the Cabinet Secretary announced that those end-of-year payouts, arbitrary as they might have seemed, should be a thing of the past.

There is also the clarion call by the critics that the price of electricity should be lowered, and the government is taking note of this, especially since the cost of oil has plummeted. The calculations are being done and in the very near future this should be another benefit that would accrue to the people.

Prudent financial management has led to what obtains today, and the critics should be singing the praises of an astute government instead of seeking to apportion blame, in this case, for no apparent reason.