A bourgeois Budget

Jan 31, 2022 Features / Columnists, Peeping Tom

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Kaieteur News-The 2022 National Budget follows in the tradition of recent Budgets. The Budget has been described as pro-people but it is fundamentally pro-business.
Considering that the Budget is more than 40 percent higher than last year’s pro-business Budget, local and foreign contractors – both large and small – can feel satisfied that this year there will be lots of money to be made through public spending.
The Budget is biased towards the construction sector. More than 20% of the National Budget is assigned to the infrastructure sector. The government has been preaching about food security. Yet, infrastructure is allocated more funds than agriculture. Infrastructure is also allotted more funds than health or housing, water and sanitation.
Despite all the pre-Budget hype about energy and particularly the gas-to-shore project, spending on energy (5.3 percent of the total Budget) pales in comparison to the allocations for infrastructure. In addition, contractors will benefit considerably from the allocations to the social sectors – education, health, housing and water in which capital works will be undertaken.
But contractors also have other reasons to be happy. They have been specially selected to benefit from the removal of the withholding tax on resident contractors, yet another discriminatory measure which contravenes the Revised Treaty of Chaguaramas.
The strange and belated discovery, by the government, that the country’s industrial and commercial transportation fleet needs renewal will also benefit the construction sector. The fleet was being renewed for many years without any need for support from the government. Now suddenly it comes along and decides to reduce taxes on the importation of motor trucks which are less than four years old and used for the transport of goods, single and double cab pickups which are less than four years old, and the removal of VAT on container haulers. The business class will be the prime beneficiaries of these tax measures.
Interestingly the construction sector was said to have grown by a whopping 29.8 percent in 2021. According to the Senior Minister in the Office of the President, this growth emanated from works in major public infrastructure as well as increased private sector activity in industrial, commercial, and residential construction. It can thus be concluded that it is this spike in construction in 2021 which therefore would have been principally responsible for the performance of the non-oil sector. More importantly, the construction sector grew without having the benefits announced in this year’s National Budget.
The contractor class sits pretty for 2022. It sits so good that the government projects a 10.5 percent growth in the construction sector for 2022.
In the meantime, consumers are feeling the squeeze from the massive increase in the prices of both imported and locally produced goods. Last year, the government provided a concession to importers in which they would pay taxes on a reduced freight. There have been concerns as to what extent this measure has helped to either reduce or curb further price increases.
It is not clear whether any analysis has been done in this regard but the business class will enjoy a further extension of this measure. The extension will last until the end of the year.
Reducing the excise tax on fuel has been presented as a means to reduce the cost-of- living. But there will not be any corresponding reduction in the cost of public transportation. In effect, and since all vehicle owners benefit, this measure cannot be seen as either a form of cost-of-living or working class relief. In any event, fuel prices are increasing globally and this measure can be better seen as helping to offset the increases which are expected at the pump.
No cost-of-living allowances were announced in the National Budget. However, the income tax threshold has been increased and this will place more monies in workers’ pockets.
The government has also NOT announced whether it will be raising the national minimum wage to the proposed sum of $60,000 which will be a real boost to poorly paid workers particularly shop workers, domestic workers and security guards, many of whom are paid less than $60,000 per month for a 40-hour workweek.
Considering the concessions which have been granted to the business class, a great insult was committed against pensioners and those receiving social assistance. To have only increased old-age pension by $3,000 per month is unconscionable especially considering the recent surge in the cost of living. It also shows the callous approach of the PPP/C towards the poor, the elderly being the most vulnerable segment of this demographic.
Poor people cannot afford life insurance and very few poor workers enjoy medical insurance coverage. Yet, the government generously allows for premiums for life and medical insurance to be deduced from their chargeable income. Who will benefit the most from this concession? Obviously the rich.
The National Budget essentially serves the interest of the bourgeois class. The working class has been thrown some sweeteners but the real honey is reserved for the rich.
(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)

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