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A NUMBERS BUDGET: TOUGH DEBATE AHEAD
In his speech that lasted for about five hours, Finance Minister Winston Jordan presented the 2019 budget to the nation on Monday, under the theme, “Transforming the Economy Empowering People, Building Sustainable Communities for the Good Life.”
The $300.7 billion, 99-page budget is 12.6 percent higher than last year’s $267.1 billion. It is the largest in the country’s history and the fifth presented by the current government in three and a half years. While many, including the leader of the Opposition, are opposed to it, some, especially supporters of the government, are encouraged.
The budget addresses the complex issues facing the country, including the revamping of the tax system, the creation of jobs and the development of a robust and resilient economy, among others. It projects a real economic growth rate of 4.6 percent in 2019, amid steady growth in the global economy, lower oil prices and stable commodity prices. Meanwhile, the real economic growth rate for 2018 has been revised once again to 3.8 percent.
According to the Finance Minister, all the major sectors of the economy will expand in 2019. Agriculture, Fishing and Forestry are expected to grow by 3.9 percent, sugar production is expected to rise by 15.6 percent, despite the closure of several sugar estates, rice by 2.7 percent, gold declaration by 2.7 percent and bauxite will continue to grow by 8.6 percent.
Meanwhile, the mining and quarrying sector is expected to expand by 3.7 percent, manufacturing by 4.2 percent, construction by 10.5 percent and services by 3.7 percent.
Overall, the Budget projects a 9.9 percent increase in revenue in fiscal year 2019. The growth rates along with the increase in revenue, if materialized, will bode well for the economy and hence the country.
However, similar predictions were made by the Minister in his previous four budgets and none was achieved. Lest we forget, when the Minister presented his budget last year, he predicted that the economy would grow by 3.8 percent and there would be significant increases in all of the major sectors. This did not happen. By mid-2017, the Minister realized that the anticipated 3.8 percent growth rate was not achievable, and as expected, it was adjusted downward to 3.1 percent, which was not achieved either.
Even though there was little mention about oil in the budget, there are many good things in it. There are several provisions in support of Education, Healthcare, Infrastructure, upgrading of roads and the water supply system, waste disposal, prison system, and major tax breaks for companies and public servants.
Corporate tax has been lowered to 20 percent over a ten-year period; the amount for old age pensioners has increased by $1,000, from $19,500 to $20,500 and the income tax threshold from $60,000 to $65,000. While there are tax reductions in the budget for businesses, homeowners and farmers have also benefited from the exemption of VAT on some construction materials and on pesticides, limestone, and some farming equipment, among others.
While many, including businesses, have commended the Minister of Finance on the budget, the leader of the Opposition has labelled it “tone-deaf,” visionless and filled with platitudes and condescending attitudes. Mr. Jagdeo claims that the budget has no provision for crime fighting and job creation and that the proposed tax exemptions in the budget are cosmetic and would wreak havoc on the economy and the people, especially the poor and lower working class.
Not only did he condemn the budget, but has stated that the government has failed to deliver on its promises. 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 one of the worst in the history of the country. 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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