2011 Budget will be a burden to future generations – says Corbin

Jan 22, 2011 News

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Leader of the Parliamentary Opposition, Robert Corbin, yesterday, during his party’s weekly press briefing said that the 2011 budget in itself has exposed Guyana’s position about money. The amount of foreign-funded projects will only serve to be a yoke around necks of future generations, he said.
The European Union, China, the Caribbean Development Bank, the Inter American Development Bank and Kuwait are funding projects. According to Corbin it is clear the budget exposes the myth of the government doing so well.
“When we examine the budget we see how many dollars have been borrowed and will be a yoke around the neck of the future generations…(It) is putting a burden on the future of Guyanese…the figures are clear to be interpreted.”
Corbin also questioned the rationale that the Government used to “discriminate” against Telecommunication Companies as it relates to the lowering of the Corporation tax. There has been no lowering of the corporation tax levied against the telecommunication companies. At the same time, Digicel is enjoying a tax holiday.
“One would expect that there would be some rationale to deal with corporate taxes and on what basis they single out telecommunication companies.”
Corbin posited that the Government already rakes in huge amounts from the companies as a result of the Value Added Tax (VAT), which is imposed, on every telephone user. “Already the sector is a cash cow for Government.”
The opposition leader said that the rationale used, is difficult to comprehend adding that the Government, ever since assuming office in 1992, had a policy of attacking GT&T. He said that the companies are making significant investments, so the rationale for the corporation tax not benefitting them is questionable.
The Opposition leader said that his party had taken a motion to parliament asking for comprehensive tax reform that would have dealt with this. “They prefer to deal with it in the ad hoc manner…is an anomaly and can’t see the reason for it.”
He said that as his party predicted, the $161.4B, 2011 Election Budget, presented to the National Assembly on Monday last, fell mighty short of offering a better quality of life for the workers and poorer classes of Guyana.
“Despite the usual boast of it being the largest Budget ever, Guyanese workers are still saddled with the unconscionable, 16 per cent Value Added Tax, (VAT), which makes a mockery of all the alleged increases in old age pensions, and social assistance, and, the raising of the Income Tax threshold from $35,000.00 to $40,000.00.”
He said that given the recognition of the need to raise pensions by 14 per cent, one would have expected that, at the minimum, wages and salaries would have been increased by the same 14 per cent.
“The raising of the income tax threshold, therefore, will have no impact on most workers who are in fact receiving less than $40,000.00 per month, which is grossly inadequate to cope with the high cost of living in Guyana…It is obvious that the Minister of Finance, abusing his parliamentary privilege, feels that the length of his Budget speech is a substitute for substance and coherent measures that can promote the development of Guyana.”
He said that the absence of consultation with stakeholders which characterised previous budgets remains a continuing deficiency and the huge figures announced for capital expenditure give no assurance in the area of transparency, accountability, and value for money.
“More important, the Budget has become a most unreliable source of determining the activities of the administration, which has been notorious with the regular passage of huge supplementary provisions later in the year…
“In December 2010, alone, the Government approved some $6B under the amorphous head of Housing Development. Parliamentary scrutiny, however, exposed the reality: the money was really intended to undertake a number of projects which could not, by any stretch of the imagination, be classified as housing projects.”
Corbin said that the reality was that the PPP had commenced accumulating its election slush fund to be utilised in 2011 for the expressed purpose of buying votes.
The 2011 Budget, Corbin said, was merely an extension of that objective.
“The PPP, however, fails to realise that the people of Guyana are far more intelligent than that party gives them credit for…The huge expenditures announced gives no assurance that the result will be a better quality of service in the various sectors.”
He questioned as an example if the $14B announced for the Health sector will impact the extraordinary high level of maternal deaths at Government Hospitals?
“Or, will the $1.4B allocated to the water sector ensure the delivery of potable water to the many villages on the Atlantic Coast that have suffered from the most unreliable distribution system…ill the residents of the East Coast Demerara still have to endure the experience of obtaining water in containers, drawn from pipeline in trenches and holes in the ground, because of the absence of water pressure.”
He questioned, also, if the huge allocations in the security sector will guarantee greater security for the nation’s citizens.
“The daily newspaper reports of escalating crime confirm that the 2011 Budget will do very little to respond to the major security crisis in our country.”
The Opposition Leader said that in the Budget Debate that commences on Monday the PNCR Members of Parliament, led by newly appointed Shadow Minister of Finance, Volda Lawrence, will expose “why the much touted largest 2011 Election Budget is nothing to shout about.”

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