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Budget 2018 on the road to “conservatism”
…as Finance Minister reveals expenditure pressures mounting
Finance Minister, Winston Jordan
Like the 2017 budget, it appears that the 2018 Budget will be one of conservatism.
This was alluded to by Finance Minister Winston Jordan, recently, as he said that the 2018 budget is being crafted at a time when domestic revenues and other sources of financing are not expected to be substantially higher than 2017.
Jordan said that Guyanese are well aware of demands by certain groups for removal of one tax or the other. He said that they are also well aware that as a result of the nation’s upper middle income classification, concessional resources are dwindling.
Given the aforementioned, the Finance Minister said, “So, we will have to exert greater effort to widen the tax net through greater efficiency in the administration and collection of taxes.”
In this regard, Jordan took the opportunity to congratulate Commissioner General of the Guyana Revenue Authority (GRA), Godfrey Statia and his hard-working staff for the work they have been doing to safeguard and collect the country’s revenues.
On the other side of the coin, the Finance Minister said that expenditure pressures continue to mount.
“For example, in 2018, we have to find new monies to finance Local Government Elections and re-build the country’s prison system, even as we continue to support the Guyana Sugar Corporation (GuySuCo), which continues to consume billions of dollars.”
When the numbers are crunched, Jordan said, the glaring picture is that lower expectations for revenue, juxtaposed against higher demands for spending, equals bigger budget deficit, which in turn means bigger debt and debt repayments for present and future generations.
Given the poor performance of some of the nation’s main traditional sectors such as rice, timber, bauxite and sugar, President David Granger had said that the 2017 budget was expected to feature an element of “conservatism”.
The President had said, “What we are looking at essentially is institutional sustainability. We want to ensure that our institutions such as the Auditor General’s Office, the Guyana Elections Commission, the Judiciary, various boards and Commissions are functioning efficiently and effectively.”
The Head of State had disclosed that the 2017 budget is centred on ensuring financial sustainability.
In this regard, Granger noted that some of the traditional pillars of the economy have not performed as the administration would have hoped.
Granger noted, however, that Government has had some success with gold and diamond. In fact, he asserted that Gold production has actually become the backbone of the economy at this time.
The President had said, “So we are looking at that type of sustainability. We have to reduce unnecessary expenditure in certain areas and ensure we generate more employment for young people. We have to continue to put money into the social sector to ensure people are happy…”
Granger added, “So the key word for the (2017) budget will be sustainability and there will be an element of what I would say is conservatism. There wouldn’t be any loose spending, because as I said, those four important sectors of the economy have underperformed.”
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