THE RETURN OF RETRENCHMENT!
One day in the eighties, during the period when the PNC was grinding the economy into the ground, a secretary in a public corporation was given a list of names to type. The names were those of employees of her workplace.
The list was about those who were to be axed as part of the thousands of Guyanese that were sent home after the PNC government could no longer afford to pay their salaries.
The secretary felt special in that she was one of the first to see just who was going to be sent home. The list was the dismissal list. But as she went down the list, she found her own name and immediately fainted.
Of course the PNC did not call sending home dismissals. They coined a more elegant phrase. Just as how they had renamed power cuts as load shedding, they called the dismissals retrenchment. It was to use a colloquial expression, sheer blows, sheer ‘murderation’ of workers.
There are persons who never recovered from that period and it now seems as if history is repeating itself, but this time with the opposition in parliament.
The opposition is now ripping apart the PPP Budget. But it is calling it slicing, except that this is no thin-slicing that is taking place. The opposition is carving out the budget as if it were a Thanksgiving turkey. The cuts are deep and they are penetrating right to the marrow. The cuts amount to ‘murderation’.
There is nothing unusual about the opposition parties demanding cuts in a budget. However, cuts should be based on some objective criteria and not be applied willy nilly, as has been the case with the APNU/ AFC cuts.
What is even more disconcerting is that in their claimed desire to cut out the “fat cats,” the opposition parties have decided to go deeper than the subcutaneous layer. They have made deep incisions into employments costs.
In the case of NCN and GINA, they have effectively brutalised these organisations by allocating a mere dollar. What do APNU and the AFC expect those agencies to do with a mere $1 subvention.
In other cases, they have cut employment costs for contract workers dramatically. Even if the so-called fat cats are pruned from the budget, the severity of the cuts also means that others will have to be sent home en masse. Some of these persons have financial obligations. They have to find food for their children and dependents. So how are they going to survive?
Either the opposition does not understand what it is doing, is following misguided advice, or is simply using workers as pawns in a most vicious game to extract concessions from the government.
One of the concessions it is seeking is a reduction in VAT. But what sense does it make to ask for a cut in VAT? Does the opposition really believe that cutting VAT is going to reduce the cost of living for the poor man? It will not. What it will do is to place more money in the hands of the private sector, which is known to contribute generously to the political parties.
The opposition parties are not proposing a massive cut in VAT. They are only proposing a minor cut of one or two per cent. How much is one or two per cent going to reduce the cost of living of the average consumer?
Even a five per cent cut is not going to help much, since most of the basic items are already zero rated. Therefore, the small cuts in VAT proposed by the opposition parties will make no difference to the small man, but will make a significant difference to those who are selling goods to the tune of hundreds of millions each year. The government is correct in resisting the reduction of the VAT.
The opposition is also way off-track by attempting to cut public expenditures at a time when the economy is doing well and demand is increasing. It is well known that government spending has a multiplier effect in the economy. And therefore any reduction in government spending is going to lead to a serious contraction in the economy, which will undermine the growth of the private sector.
So, on the one hand, by proposing a reduction of the VAT, the opposition is helping the private sector, but overall the public sector will lose out if billions are cut from the budget.
The proposals therefore being made by the opposition make no sense. What it does is reveal the true colours of these opposition parties. They are not there to build the country, but to take it back into that period when there was mass retrenchment.