THE 2023 BUDGET AND SOCIAL ALLOCATIONS

Jan 29, 2023 News

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CONSUMER CONCERNS

PAT DIAL

Kaieteur News – The Guyana Consumers Association (GCA) over the years has not commented on Budget presentations, mainly because there is always a plethora of comments in the media, and more importantly, because any such comment, no matter how objective, is often times treated as being tainted with the adversarial politics of the country. The Guyana Consumers Association, by its Constitution, does not involve itself in the politics of the day.  This year, however, is the first time that there has been a substantial draw-down from the Natural Resources Fund (NRF) and that carbon credits have to be used in the Budget. This marks the beginning of a new era in the economic and social history of Guyana and this justifies a comment from the GCA this year.  Our comment will however be confined to the social allocations of the Budget, since this affect consumers in a more direct way.

Before we go further, we would like to remind our readers that there have been two schools of thought as to how oil revenues should be spent.  The first which is comprised of mostly academics feel that the easiest, most transparent and quickest way to eliminate the scourge of poverty is to make large direct cash transfers of at least $1M to every citizen, equivalent to several millions per family.  The other school, which consists of mostly politicians and business folk, whose position is similar to opinion in most oil-producing countries today, advocates that part of the oil revenues be kept in a Fund for the benefit of future generations and the other part spent on social and economic development.  This Budget reflects the position of the second school and claims that it addresses, “the present needs of today and the critical investments needed for tomorrow.”

All sections of a Budget affect all citizens, but in this offering, we shall focus on the social allocations only since such affect consumers directly and we would wish them to be aware of them so they would be able to take advantage of them:

Salary adjustments to an amount of $3B would be made to the Disciplined Forces – the Police and the Army – and would positively impact 14,000 persons and their families.  Health Workers inclusive of doctors, nurses, medexes and other medical professionals would likewise receive salary adjustments.  These adjustments would cost $3B.

Income Tax relief which used to be granted at $75,000 per month would now be increased to $85,000.  A total of GUY$3.3B would be allocated to this effort.

The ‘Because We Care’ cash grant which used to be $25,000 for every child attending public and private schools would now be increased to $35,000.  Accordingly, if a parent has three children at school, that parent will receive over $100,000.  A total of $2.2B has been allocated to this grant.

No excise tax would be charged on fuel imports and this would prevent fuel prices from skyrocketing.  This facility would cost $17B.

Freight charges always form part of the price of which imported goods are sold.  An allocation of $6B has been allocated to reduce such charges and this would result in stabilizing prices at which consumers purchase imported goods.

To relieve unemployment, thousands of part-time jobs have been created countrywide with $10B being allocated to cover wages.

Old Age pensions have been increased from $28,000 per month to $33,000 with 73,000 persons being beneficiaries.  Public Assistance has been increased from $14,000 to $16,000 per month, with 29,000 persons benefiting.  A total of $4.11B has been allocated for this relief.

To purchase or build a home, a citizen would have to take a mortgage on which he/she must pay interest.  Mortgages for low-income houses at lower interest rates were increased from $15 million to $20 million and payment of VAT has been removed from the sale of residential property, thus reducing the cost of home ownership.

Tax relief was granted on the purchase of motor vehicles, both electric and those using fossil fuel, which will allow more citizens to own cars.

Though there are substantial allocations for health, education, housing and water which would include items such as upgrading or building new hospitals and health centres, expanding laboratory services and acquiring modern technology; or education which would include upgrading and/or building schools, furthering the GOAL scholarships, free textbooks for primary and secondary schools;  or  housing or water and sanitation or  social services such as the provision of shelters or Sports, are all large and inclusive social spending heads,  we will not deal with them in any detail, since they are macro in nature and do not affect the consumer with the directness of a salary or old age pension increase.

With the spending on specifics as mentioned above, citizens would still be enjoying transfers from the oil revenues though not with the directness of cash transfers of millions of dollars for each citizen.

As consumer advocates, we would always feel that the increases should have been greater.  Nonetheless, we are appreciative of what has so far been allocated and look forward to further increases in 12 months when the next Budget would have been tabled.

 

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