What happened to the 5 billion dollars?

Aug 08, 2023 Features / Columnists, Peeping Tom

---

Kaieteur News – The PPPC government did not have a comprehensive plan to address the cost of living crisis. This betrayed the intellectual bankruptcy of the government and particularly its inability to develop wide-ranging and effective policies to counter the rising costs faced by consumers.

This is why during its Budgets, it has had to announce that it was setting aside five billion dollars last year for the cost of living relief. At the time of the presentation of Budget 2022, it could not announce the uses to which the five billion dollars would be put because it simply did not have a comprehensive plan.

It was not until May 2022 that the government announced a one-off cash grant for households in riverine and hinterland communities. This was estimated to have cost the government less than one billion dollars.

This year, another five billion dollars has been set aside for cost of living relief. But no measures were announced as to how this five billion dollars would be allocated.  And as at the end of July, this year not a cent had been allocated to cost of living relief.

The government has never developed a comprehensive menu of measures for cost of living relief. This is why it is seeking refuge in the supposed increases in disposable incomes as a response to the cost of living crisis.

The removal of VAT on water and electricity and water and the reintroduction of the ‘Because We Care’ cash grant were not cost of living relief measures. These had nothing with cost of living and were merely concerned with reversing the actions of the APNU+AFC government. The removal of VAT on certain basic food items followed the same rationale: how dare APNU+AFC place taxes on items which were previously free of VAT?

This is not to say that there were no positive measures implemented to stem the cost of living. They were. The reduction of the excise taxes on fuel helped to suppress the pass through-effects of rising fuel prices. Considering that in 2020, almost 20 billion dollars was collected by the government as excise taxes on petroleum products, this measure represented a significant loss of revenues for the government.

The government also sought to contain imported inflation by allowing importers to pay import taxes on a pre-pandemic freight rates. This reduced the taxes that importers had to pay. This it was hoped would help to contain the prices at which these imported items were sold. The measure failed because consumers did not benefit much from reduced freight cost adjustments.

The freight rates have since declined to almost pre-pandemic levels. But there has been no corresponding decline in the prices of goods on the shelves, meaning that the business class has been profiteering from the freight cost adjustment measure.

The government also promised farmers’ markets to ensure that local produce was sold at a lower price to consumers. This was a recognition that green grocers had jacked up prices in response to the general increase in inflation. This measure was mere a window dressing. Farmers markets were held too intermittently to impact on food prices.

In this year’s Budget, the government sought to classify and employment-generation measure, the part-time jobs programme, as a cost of living measures. The part-time jobs programme has been poorly implemented and has deviated from its stated intention that the beneficiaries would have been the sole income earner in their household. In many instances, this rule has been observed in the breach.

The part-time jobs programme is geared more as an unemployment programme ( safety net) and not as a cost of living relief measure. The programme ie mired in controversy since many of the beneficiaries were not actively seeking jobs and many have paramours that are employed.

The government was not receptive to the suggestion that a monthly cost of living allowance be paid to public sector workers until prices return to normal. This would have brought immediate relief to government workers, placed monies directly into their hands and force private sector companies to follow suit. Instead, the government has monies set aside for cost of living relief but does not know what to do with these sums.

The people of Guyana are not unreasonable. They are not going to blame the government entirely for the rise in cost of living. The average citizen knows that there is a global inflation crisis.  Guyanese living overseas would have been conveyed to their relatives back home that they too are experiencing high prices.

What citizens need are not promises about setting aside 5 billion dollars or giving concessions to the business class. A cost of living allowance for public sector workers was doable. The money was there to pay this allowance. It is not too late for a small allowance to be paid. It is not too late to address one of the root causes of the local inflation crisis: greed.

---

---