The concerns which the Budget must address

Nov 26, 2018 Features / Columnists, Peeping Tom

Budget 2019 which will be read today, aside from the basket of goodies which it will provide to placate the public, must address certain fundamental questions as well as some issues of concern about the management of the economy.
In the days of state control of much of the economy, Budgets were looked upon with trepidation and anticipation. The Budget set the tenor of the citizen’s lives; they would determine wages and prices in the economy and in fact whether persons would be laid off and if the dollar will be devalued and by how much.
These days, Budgets are looked upon in terms of the level of taxation, pensions, public service wages and concessions to the private sector.
Also, they send signals as to what will take place in the economy and how well it is going to be managed. Much needs to be said, at this stage of Guyana’s development as to how oil and gas is going to be managed because this is the centre of attraction in the economy.
The first of these concerns is the overdraft which the government is running. The government must provide credible reasons for having such a high overdraft. It must be able to provide explanations as to why having inherited a surplus it is now running an overdraft. This is driving fears that the government may be forced into heavy borrowing in the future to finance government operations or may be forced to increased taxes even more than at present.
The second measure which should be explained is the reducing international reserves. In 2012, Guyana’s international reserves were as high as US$ 825M, they have now fallen to a level which is hovering around three months of imports. Guyana can find itself having to tread water in case of major rise in oil prices before 2020. The Minister has to explain why his policy in terms of the level of international reserves being maintained.
The third issue which should be addressed concerns the steps which are being taken to increase investment in the economy. Markers suggest that private investment is falling, despite the claims by GOINVEST about the increased investor interests. Without investment, jobs simply cannot be created without a bloated government bureaucracy.
The fourth concern is the size of the government and the enormous cost of administering the bureaucracy, now estimated at $500M per day. The size of government is much too bloated and there is a need to prune expenses and to make it more efficient. The government keeps creating new agencies each day while continuing others which are as much as drag on revenues as was the sugar company.
The fifth concern is about the US$30B which the government has borrowed for the sugar industry but for which most of it is parked attracting a stinking amount of interest while both the Minister of Agriculture and the sugar company have complained about not seeing much of these funds. These monies are guaranteed by the government. The Budget can be used for the Minister of Finance to debunk concerns that this US$30B will not turn out to be Ponzi scheme financed by taxpayers.
Other issues which the public is hoping that the Minister will provide clarification are the future of the Berbice River Bridge, the fate of the Marriot Hotel, the new bridge across the Demerara River, the road link to Brazil and jobs for young people.
The Minister has had his honeymoon period with his first four Budgets. He will find the public less sparing of criticisms, now that he has jumped on the political platform. He has a full plate this time around and unless he can provide answers to those issues mentioned before, he will find public sympathy and understanding quickly evaporating.

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