Government is too big

Dec 13, 2016 Features / Columnists, Peeping Tom

Guyanese are still shaking from the Budget blues. They have a lot more shaking to do. If the taxation measures outlined in the Budget are part of the implementation of the recommendations of the Tax Reform Committee, then worse is yet to come.
Taxes dominated the 2017 Budget. The government is trying to raise more revenues to spend. The problem is that it can hardly spend the sums that it allocated itself earlier this year, much less to try to spend the extra billions that it is seeking to extract through VAT on water, electricity, and on private medical services.
The Budget has become too significant in the lives of our people. The quality of life that people expect to enjoy, hinges too much on government spending. That needs to be reversed so that whatever the government Budget, it does not have such an appreciable impact on the lives of citizens.
When government spending is so important, it shows that there is a problem with the manner in which market forces are working. That problem has to be looked at carefully, because it is pointing to misallocation of resources.
In the United States, the annual financial Bills do not cause the sort of stir as they do in Guyana. The reason is because the economy is dominated by the private sector. Budgets tend to have a greater impact on big companies which compete for massive government contracts rather than the average citizen who works in the private sector.
Big government must be downsized. It is a drain on resources for development. It takes way too many resources from citizens and leads to delays in accessing services.
Guyana has a big government. Guyana’s growth came this year from the private sector. The growth came from gold mining. The gold sector is entirely private sector-driven. Yet, the size of government is expanding. Instead of the government bureaucracy becoming smaller it is becoming bigger, with more and more entities being established.
A number of private sector entities have shrunk the size of their workforce, because they no longer need as many workers to do the same work as they did before. Yet the government bureaucracy has not been shrinking markedly. Any decline in numbers would be very small.
The government needs tax reform, but not to raise more taxes. It needs tax reform to ensure greater equity in taxes. It needs reform not to pressure people more, but to ease the pressure. Someone should do a calculation of what it costs the government to run its bureaucracy, and then decide whether the public is obtaining value for money.
The government should commission a team to go through every single government department and see whether they are overstaffed and how savings can be made. There is too much wastage within government. A reduction in savings can force a reduction in taxes and this will be beneficial to everyone concerned.
The private sector is still too dependent on government spending and contracts. We should have passed that stage by now. The private sector needs to be given a great role to provide services which are presently provided by government. Government services should be outsourced to private persons where that service can be provided cheaper than government.
Government needs to get out of certain businesses. The government should not be competing with the private sector. The government should be promoting policies which allow for the private sector to have a bigger role in the economy.
Then and only then will Budget Blues be a thing of the past. Then and only then will people not have to worry every time Budget debates come around.

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