AN AMBITIOUS BUDGET

Aug 14, 2015 Features / Columnists, Peeping Tom

The government has read a very ambitious Budget. It is not a complicated Budget and therefore it should not confuse many. It is a typical Budget, not unlike the many that we have had from the PPP.
There will be some disappointment, especially over salary increases. After all, APNU and the AFC did promise that when they got in power they would pay public servants better. They did promise initially a 20% increase. Then this was adjusted to 11% and then to a moderate increase which everyone presumed was back to the 20%. In the end, all that was paid was a 5% increase.
The pro-government press, including those within the private media, has attempted to put its own spin on things by giving the percentage increase for those earning below what is deemed the basic public service minimum wage.
Well, not many persons are earning below the $50,000. In fact, it is felt that most persons at the lower end of the scale are earning on average around $50,000. Hopefully during the debates we will know exactly just how many persons are earning below $50,000 per month.
A spin has also been put on the reduction of the Berbice Bridge toll. The reduction will allow the commuter to purchase a bag of plantain chips and a packet of chicken foot. It is a minuscule reduction; not what most persons who supported the Alliance for Change had in mind.
When the call was made for a reduction in the bridge toll, the people of Berbice were thinking perhaps about a figure of $500 to cross the Bridge, not $1900. This will be a disappointment and there will be misgivings about the way this issue has been handled.
If also, the reduction has to be subsidized by taxpayers, this will add injury to insult. The AFC had at one stage not ruled out privatization of the Bridge to ensure that tolls are reduced. They do not seem to be pushing that line any longer. It will of course be a radical step and it is good that the coalition has not been thinking along those lines.
There are also serious concerns about some of the projections that have been made in relation to growth. Many of the targets are not going to be met. Gold is not going to do well, even with the concessions that have been given. It will take at least another year for persons to mobilize resources. The removal of the tax on fuel will help some miners, but not all, since fuel has to be transported, and there is no indication that transportation costs are going to be slashed. The gold industry is therefore not going to be able to meet its target, even though the miners may have achieved their objective in wresting concessions from the government.
Rice will increase in production. The rice is already in the fields. But come November will there be a market? The Venezuelans have always insisted on a one-year agreement. They have never indicated that they will extend, but they always do. Guyana has to reduce the political belligerence with Venezuela, because even a new agreement needs to be signed for the sale of rice and Venezuela is not going to be willing to sign if Guyana is not careful with its verbal exchanges with Caracas.
Sugar will not likely grow at all. The industry can hardly be returned to profitability. Any industry which suffers a price cut of close to 35% is going to go under and it is time that those who are propping up sugar realize that they should make plans to privatize the industry.
The Budget is a decent start. The new government should be given a chance to show that it can spend the sums that it says it will spend, and for the purposes for which it has been allocated.

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AN AMBITIOUS BUDGET

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