Budget 2019 riddled with inflated estimates, poor sectoral forecasts –Opposition MP

Dec 04, 2018 News

The well-known song “Sweet Lies” by Reggae Sensation, Beres Hammond is how Opposition Parliamentarian and Head of the Public Accounts Committee (PAC), Irfaan Ali, chose to describe budget 2019 which was recently presented by Finance Minister, Winston Jordan.
He made this declaration during the budget 2019 debates which kicked off yesterday. Leading off the debate, Ali contended that budget 2019 is riddled with many things, two of which are inflated estimates and poor forecasting.

Opposition MP, Irfaan Ali

“Permit me to provide a few examples of the questionable forecast that this Honourable House was treated to by our Honourable (Finance) Minister in his presentation over the past two years. The forecasts regarding the sectoral contribution regarding sugar were $4.3 billion and $5.3 billion above the actual contribution of this sector in 2016 and 2017 respectively.”
The Parliamentarian added, “The forecast of the sectoral contribution of the gold industry was $2.7 billion above actual contribution on the sector in 2017. The revised estimate regarding the contribution of this sector is also projected to deviate from the initial forecast in 2018 by $11.3 billion.
“The combined contribution of the construction, wholesale and retail trade, transportation and storage, information and communication, financial and insurance activities, public administration, education, health and social services, and rental and dwelling was approximately $6.3 billion below the forecast for 2016.”
Due to these and other forecasting errors, Ali said that the Minister was forced to revise the real economic growth rates for the past three years downwards.
The Opposition member said however, that the aforementioned are not the only blunders made by the Finance Minister. He also accused the Minister of inflating the estimates.
“The inflated estimates are intended to create the false impression that the ‘good life’ is here even though Guyanese have been waiting for three years to experience it. I am also convinced that the inflated estimates are meant to conceal the difficulties faced by the ailing sectors that were punished with higher taxes…”
It is on this premise that Ali sought to share with his colleagues of the House, what he described as some hard facts about the economy that are conveniently ignored by the Minister responsible for Finance.
According to the official statistics produced by the Bank of Guyana, Ali pointed out that sugar production for 2017 was approximately 57 percent less than the level reported for 2014. He noted that export revenue from sugar was US$39.5 million (or $8.3 billion) less than the level reported for 2014. The export revenue for rice and bauxite also contracted by US$48.5 million (or $10.2 billion) and US$17.6 million (or $3.7 billion) respectively between 2014 and 2017.
As for timber production, Ali noted that this fell by 30.9 percent between 2014 and 2017, causing the export revenue from timber products to reduce by US$20.2 million (or $4.2 billion). Meanwhile, Ali noted that diamond production contracted by 47.9 percent thereby causing the export revenue to decline.
The Opposition Parliamentarian said the trouble in the other sectors are similar and may be attributed directly to the tax measures imposed on the productive sector by the government as well as government’s unwillingness to accept that our productive sector is on the decline.
“Now that the Minister is aware of these harsh realities, it is hoped that he would do the honourable thing and amend his budget instead of keeping his head in the proverbial sand,” Ali concluded on this matter.

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