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Santa Claus Budget

Nov 28, 2016 Features / Columnists, Peeping Tom

The National Budget will be read today in the National Assembly. What can Guyanese expect?
There will be a lot of goodies in the Budget. A bonus here, a bonus there, an increase here and increase there!
There will be something for the small man but there will be little benefits for the growing middle class in the country. The objective would be to narrow the gap between the working class and the middle class.
A number of things can be predicted with a fair degree of confidence.
First, Guyanese can expect the usual doomsday diagnosis. The PPP/C left a great deal of debts; Guysuco is a drain on the economy;  a number of the sectors of the economy are underperforming, the massive subsidy to keep electricity rates low in Linden has to be increased even further, tax evasion and tax avoidance levels are high etc.
Second, the government will downplay the fact that oil prices are high; two major gold mining investments made under the PPP/C is what is driving economic growth; the Skeldon Factory is actually improving in terms of efficiency but there is simply not enough cane to grind and a great deal of money is being wasted on defence and the public bureaucracy.
Third, wages at the lower end of the scale have been increased by 40% even though the government will not tell us just how many persons were working for below 35,000 per month. The minimum wage has been increased to just over $1,650 per day even though the lowest paid worker on a construction site, the laborers, are still demanding $6,000 per day. No increases will be announced for 2016. This will have to await the usual government imposition, sorry, I mean negotiations with the unions. All workers will receive a $50,000 bonus for Christmas. The eight billion dollars which was received from the GGMC will be used to fund part of this increase.
Fourth, tax reform will be announced. The emphasis will be on plugging tax loopholes.  Penalties, which act more as a disincentive rather than an incentive for tax collection, will be increased. Laws to ensure that certain professional classes pay their fair share of taxes will be implemented. The emphasis will be on increasing tax collections without necessarily increasing the tax base. There will be some increases in fees and licenses, especially for those which have not been increased for some time.
Fifth, the security sector allocations will have to be increased to deal with the Venezuelan threat.  The army will have to receive more monies. There will be planned increase in strength. The prison service will have to be boosted but the police will have to wait their turn.
Sixth, the government will increase spending on infrastructure. They have to. The Chinese have just disbursed a large loan negotiated under the PPP. The money has to be spent. The internet connectivity project of the government will be one of the major selling points of Budget as will be the ongoing distribution of laptops of teachers.
Seventh, housing will be a major priority with billions being allocated to build condominiums and apartments.  A system as to who will get these flats will be left to the discretion of the housing department.
The government will announce measures to stimulate the economy. But these will be too general to really be taken seriously.  The government will also roll back its usual threats to take away lands from investors who have not done what they said they would have done. The case of Barama where over five hundred jobs were lost will be sober reminder to the administration that it has to be nicer to investment if it hopes to attract investment.
Eight, there will be a lots of talk about the green economy but talk is cheap and easy especially at Christmas time.
The Budget will be a Santa Claus budget. You will get something but not necessarily what you want.

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