Santa Claus Budget

Nov 24, 2018 Features / Columnists, Peeping Tom

The focus in the next few days will be the reading of the 2019 Budget. There is great excitement over this document, given that the government, having suffered humiliation at the local government elections, is thus expected to compensate by offering a bagful of economic goodies that will match anything that Santa Claus can deliver this Season.
So what can be expected? The government has already signaled that it is going to offer wage increases for public servants and increased pension for seniors.
Public service workers have for 2018 been granted retroactive wage increases ranging from 0.5% to 7%. The government, one year before first oil, is likely to be even more generous in 2019 and workers are likely to receive double digit wage increases.
There is talk that pressure is mounting on the government to restore the one month salary bonus to the Disciplined Services. The government will most likely relent on this issue.
Speculation is that with about $G 60 billion to be made available to the government, workers can expect as much as a 25% increases in wages in 2019.
The government, in fact may do what it has done over the past two years – impose the increases without negotiations with the union representing public servants. As such, it can announce an interim 20% increase in wages and salaries on Monday.
In terms of increases in old age pensions, there are high expectations that with first oil around the corner, the government will be trying to woo the elderly vote for 2020. On the street, there is speculation that old age pensions will increase to around $39,000 per month, given the windfall that is likely to come from first oil.
Changes are also likely in terms of the income tax threshold. Some persons have been calling for this to increase to $100,000 but the government which is now trying to improve its tax collection may not go beyond $75,000 which is affordable.
The public is also likely to see a reduction in water tariffs, rather than the PPPC’s demand for the reintroduction of the water subsidy for pensioners.
With Guysuco no longer as much as drain as it was in previous years, the government can divert some of the monies that it was paying to the sugar corporation.
The Budget is therefore likely to see a total removal of fees at the University of Guyana which will return the nation to the days when the government could boast about free education from nursery to university, never mind half of the students were and are still failing their examinations.
Plans for internet connectivity could well see a decision to turn the coastal plain into an internet hotspot which will mean free internet for everyone. This is the best way, of course, to force liberalization of telecommunication.
In terms of education, the government is not likely to reintroduce the $10,000 per year per student grant. It is likely to want to do better than this and to provide free transportation for students instead.
Businesses will not be left out of the loop. Major tax concessions are most probably going to be offered to the manufacturing sector since industrialization will have to be pursued more aggressively if Guyana is to avoid Dutch disease.
Santa Claus is going to be overshadowed by Winston Jordan this Christmas. It will be a goodies-packed Budget with something for everyone, including the Ministers.

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Santa Claus Budget

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