Government must think big, project big, and guarantee big deliveries

Feb 22, 2020 Letters

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DEAR EDITOR,

The Hon. Minister of Finance spoke of thinking about taxes and other incentives intended to boost activity in certain sectors, notably construction. I think those are encouraging, but they are deliberately vague (too much so) and stingily too small (too unacceptably) from the number hinted at to make much of a difference.
I recognise that the government did implement a reduction in VAT last time around. But I assert that it was too sparse to be recognised, to be even felt by the little people. I didn’t recognise either its implementation or existence.
I recognise, also, that prudent financial husbandry demands a little here and a little there, rather than a big splash that could turn out to be unaffordable and burdensome with the passage of time. But even as I extend those understandings, I must submit that a 2% yesterday and another 2% today, barely registers on the scales of consciousness, if they do at all and, where they matter the most, on the balance wheel of the struggling Guyanese household.
As I have said repeatedly, I do not know how people exist day to day in this country; and have existed in the years and decades before. In spite of all the vehicles and the flashing extravagances, there are still too many, who go hungry, cannot afford a roundtrip minibus fare, or are unable to obtain a card for two-hundred dollars of cellphone credit (and that is weekly). All are just out of reach on a continual basis for too many for the longest while now. And no amount of statistics and projections by either government or Opposition people are able to change that unsparing reality.
So, when the government, through its finance architect, steps forward to assure that reductions are in mind and coming, I say they are not enough. Think of this: spend a thousand dollars on VAT-eligible items and the sales taxes paid can buy a small pack of tennis rolls.
The first problem is that too many do not have a thousand, while those at the bottom and lower tiers who do have, must do so without those rolls, because the spare change for them has been swallowed up by VAT. Matters are as simple and as complicated and final as that for too many folks in this country.
It is why I say again that any examination of and action on VAT should not be of the ‘fine change’ variety. Two percent is not it; it does nothing. If that is what is contemplated, then shelve it.
In fairness to the Minister, he did include the qualifier of “at least” which signifies that a few more percentage points must be on the table. To make this have some needed oomph and actually be felt and then work for the people who need it the most, any VAT reduction has to be at least six percent. At a rate of eight percent, the small man should be able to flex a little buying power with his scarce dollars, and I am talking of survival instincts only.
When that level of VAT is coupled with whatever other reductions/incentives are in mind for the construction industry, there is so much more productive activity that follows, through some combination of tax credits and the rest that should give a bigger bang for the dollar invested.
I agree with Minister Jordan that a “boom” is to be expected in that sector. With the cascades of people coming and oil money sloshing around, I do not foresee how it can be otherwise in the building trade. The man at Energy did say recently that some 5 million barrels should come Guyana’s way; multiply that by anything and there is something.
I think that what is big in the government’s thinking is that cash handouts/giveaways (whatever) is the biggest of big-ticket items, and that is where it plans to put much muscle and political capital. Though I do not like it and I still disagree, it could hardly be found fault with as a surefire bestseller in any elections season, as there is no greater motivator. For pure political attraction, there is nothing sexier, more irresistible.
For certainty, everybody mutters about better hospitals and schools and technologies, along with all those other exciting things like a new city and increased salaries. Therefore, the reality is that, though there should be more cash to go around, there are so many areas and places that cry out for addressing and are competing for it.
In effect, this means that what started out as plenty, suddenly assumes the stretch of sparseness, and this is only considering that the wisdom of prudent financial management prevails. Generally clean practices in that field, too.
For all these reasons, I recommend that, instead of the piecemeal of nickels and dimes, the government is better served by identifying those meaningful things (to the masses) that it guarantees to deliver, and at a material level.
Sincerely,
GHK Lall

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