Jordan presents a ‘Jagdeo’ Budget

Dec 01, 2017 Features / Columnists, Peeping Tom

There is a stark resemblance of this year’s Budget Speech to those which were presented under former President Bharrat Jagdeo. The structure of the Budget speech is almost the same.
While the Fiscal Management and Accountability Act specifies what should be included in the National Budget, it does not mean that the Budget has to be regimented each year along the same lines. Ministers can be creative while honouring the obligations under the law.
The similarities between the structure of the Budget speech between 2015 and 2017 with that what existed under President Jagdeo, may have to do with fact that the current Minister of Finance was a key technocrat under Jagdeo when he was Finance Minister. As a former Budget Director, he would have played a prime role in the Budget process. He therefore, now as Minister of Finance, may have stuck with what was familiar to him.
The problem with doing that, though, is that the Budget speech read very much like Jagdeo’s budget speeches. It covers the well-trodden ground – international developments, domestic developments, targets etc. And then it highlights some measures which are like sweeteners, because they get people excited.
There were quite a few this year in the Budget speech, relating to vehicles for use in tourism, removing the discriminatory nature of the travel tax allowance for the benefit of private sector employees, granting an amnesty for tax defaulters, removing the education tax; removal of taxes on buses with seating capacity in excess of 21 seats and an increase in old age pensions by the princely sum of $500.
These are the measures which will excite people. They are the basis on which the average man judges the Budget. But how do these measures fit into the overall strategy of the government? It is important that measures not be ad hoc based on consultations, but become instead, part of the strategic approach of the government.
In this regard, the 2017 Budget does not seem much different from those which were presented under Bharrat Jagdeo. They do not address the fundamental economic concerns: unemployment, growing the economy at higher rates than what existed before; setting a living wage etc.
How do the Budget measures fit into a plan for reducing unemployment? How do the Budget measures stimulate growth for the private sector when government is pushing the private sector out? There is a lack of fiscal space for paying workers a living wage, yet the revenues which are being collected now, are many times what was being collected in 1992.
Teachers were given an interim increase in salaries. They were expecting something more before the end of the year. The negotiations obviously are not completed, because the Minister has not announced any further increases. If the government cannot afford to pay a miserly $25,000 bonus to public service workers, how is it going to find the money to pay the post-interim increase for 2017 for teachers?
We hear a lot about the green economy, but where is the evidence that Guyana is going green, apart from painting buildings in green. How many government buildings have exited the national grid? Most are still utilizing energy from the national grid which is generated from fossil fuels?
Jagdeo’s Budgets were about government spending. Each successive Budget was bigger than the next. The same scenario is repeating itself under Jordan. Each successive Budget of Jordan is bigger than the other. The question is whether the government has the capacity to spend that kind of money.
Jagdeo’s secret weapon was to give everybody something so that they could feel nice. This year’s Budget is a feel good Budget. It tries to give as many persons something to feel good about. Jordan himself said it is about giving back. Last year was about taking back from the workers by taxing the living daylights out of them. This year they get a little ease, and you know what? Guyanese are so gullible, they will smile and say that this is the best Budget ever, just as they did with Jagdeo.

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Jordan presents a ‘Jagdeo’ Budget

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