2019 budget pushes Treasury overdraft to $210B

Dec 11, 2018 News

Local financial analysts are deeply concerned about the increase in the overdraft of the national purse. As at December 31, 2015, the Treasury was in an overdraft of $42.7B. But that is expected to climb to over $200B with budget 2019.
Expressing concerns in this regard recently was former Auditor General and Chartered Accountant, Anand Goolsarran. The financial analyst pointed out that at the end of 2018, the Consolidated Fund will be overdrawn by $180 billion. Taking into account the 2019 budget proposals, the Chartered Accountant said that the overdraft will increase to $210 billion at the end of that fiscal year.
But what is even more alarming to Goolsarran is the fact that there has been no reporting in the 2018 and 2019 Estimates of the status of the Consolidated Fund.
In his recent writings, Goolsarran said, “It has been the practice for information on the Consolidated Fund to be presented within the budget documents to enable legislators to view the budget proposals in the context of the availability of funds in the Treasury to meet the proposed expenditure, taking into account anticipated revenue collections.”
He added, “Over the years however, compliance has been uneven. In particular, there has been no reporting in the 2018 and 2019 Estimates of the status of this account.”
Goolsarran said that indeed, legislators appear unconcerned about the sources of financing of the budgetary proposals, with the approval of such proposals.
Further to this, Goolsarran has told this publication that a heavily overdrawn Consolidated Fund most definitely affects the budget process.
The Chartered Accountant said, “The overdrawn balance will definitely affect the size of the budget and the process for it, if government is to exhibit financial accountability and control. We have to aim over a period of time to ensure that we have a balanced budget, meaning that expenditure must not exceed revenue.”
The financial analyst said, too, that Guyana has been living beyond its means and as a result, has accumulated billions in deficits. The former AG insists that the government needs to pay particular attention to revenue assessment and collections where this issue is concerned.
Goolsarran had said that the overdraft situation can be traced back to 1992 and earlier periods.
He said that the evidence suggests that expenditure from the Fund over the years exceeded revenue paid into it at worrying rate. Goolsarran said that for the period 1992 to 2012, the total revenue paid into the Consolidated Fund amounted to $1.643 trillion while expenditure totaled $1.727 trillion, giving a deficiency of $84 billion.
The Chartere

Chartered Accountant, Anand Goolsarran

d Accountant said that it is evident that “We have been living beyond our means for decades only to be rescued by borrowings from the issuing of Treasury Bills, which attract additional costs by way of interest charges.”
When Treasury Bills, otherwise known as ‘T-Bills’, are bought, it simply means that money has been lent to the government. The special bills have a face value, but are sold for less than they are worth. They also have a specified date upon which the face value is repaid.
If Guyana has a T-Bill worth $60, it is sold for $50. But by a certain date, $60 is what is repaid. The buyer essentially earns $10 for the investment.
Treasury bills are one of the safest forms of investment and are considered risk-free.

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