A FIERCE BUDGET DEBATE ENSUING

Nov 29, 2017 Editorial

In a speech that lasted just over three hours, Finance Minister Mr. Winston Jordan presented the 2018 budget to the nation on Monday last, under the theme “The Journey to the Good Life Continues”. It was the fourth budget in 32 months and one of the earliest to be presented to the National Assembly in the last two decades.
This year’s budget, like the one last year, has been presented before the start of a new fiscal year. The $267.1 billion budget appears to be sound. The focus is primarily on the future development of the country and to provide a good life for all while simultaneously trying to solve some of the present problems facing the nation.
Unlike the previous budgets, in which the Minister had laid the foundation for the diversification of the economy – away from the country’s traditional products of rice, sugar, bauxite and timber – this time he shied away from it. He stated that it is not practical to sustain and maintain the sugar industry. To do so, would cost the taxpayers an enormous amount of money.
That said, there are many encouraging things in the budget. It addresses some of the complex issues, such as the creation of jobs and to have a robust and resilient economy that is forecast to grow by 3.8 percent in 2018.
Lest we forget, when the Minister presented his budget last year, he predicted that the economy would grow at 3.8 percent. This was based on the assessment that production in the mining and quarrying industries would increase tremendously. It did not happen. By mid-2017, the Minister realized that his forecast was not achievable because production in most of the sectors had dropped. As a result, the growth of 3.8 percent was adjusted downward to 3.1 percent. That did not happen either.
The economy grew at 2.7 percent in 2017, yet the Minister projected a 3.8 percent growth rate for 2018. With regard to taxes, there are numerous developments. The removal of the 14 percent value added tax on private education and a 2.9 percent increase in old age pension were noteworthy. The budget also made several provisions in support of GuySuCo, infrastructure, the Prison Service, roads, water supply system, health care, education and waste disposal, among others.
A major concession is the granting of amnesty to companies and individuals from January 1, 2018 through September 30, 2018, to file and pay their back taxes without penalties.
There are some other positive elements in the budget. For example, the tributors’ tax on miners has been slashed by 50 percent. However, there is also bad news. Despite the high rate of inflation, old age pensioners will receive an increase of only $500 per month.
While many in the wider public have commented on the positive aspects of the budget, the leader of the opposition, as has become customary, has called it “pathetic” and “disastrous” for the country. The public has every right to acknowledge the benefits of the budget in the same way the leader of the opposition has the right to criticize it as the worst in the nation’s history. Mr. Jagdeo opined that the proposed budget would wreak havoc on the people, especially on the poor and the working class. If this is a sign of what is to come, then the nation should brace itself for an explosive and ferocious debate on the budget in the House.

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