Latest update April 19th, 2024 12:59 AM
Mar 24, 2013 Editorial
Tomorrow the Minister of Finance will present the budget for 2013. Even though promised some time ago that it was going to be unveiled much earlier, and this was accomplished on a number of occasions, we seem to have reverted to slipping the proposals for the annual national income and expenditures just in time before its March 31 deadline. By the time the debate winds up in mid April, almost one-thirds of the year would have expired.
Maybe this year, the delay was occasioned by consultations between the Budget Office and various ‘stakeholders’. However, one subset of that grouping, possibly the most critical subset – the Opposition, appears to have missed another opportunity to engage in what the Georgetown Chamber of Commerce and Industry (GCCI) labelled as ‘meaningful’ consultations.
There was a particularly acrimonious and unfortunate public exchange between the Finance Minister and his ‘shadow’ from the Opposition benches, Mr Carl Greenidge as to why a scheduled consultative meeting never transpired.
In light of the events surrounding last year’s budget in the National Assembly, this lack of substantive discussion between the Executive Branch and the Opposition that controls the Legislature, is very ominous. As all Guyanese are aware, last year, the Opposition excised $21billion from the $192billion budget – some 11 per cent – which led to the government taking the matter to the Courts.
In a rather gnomic interim ruling, the Chief Justice evidently decided that while the Opposition might comment on the Budget and suggest changes in the line items, they cannot actually make cuts. The Executive, the court ruled, was not only mandated to make estimates for expenditures but to also not have them altered.
The Opposition, not surprisingly, were nonplussed: was the Legislature to be simply a “house of recommendations” which the Executive could or could not accept at its own discretion? The leader of the Opposition, Retd. Brigadier David Granger, had signalled that his coalition grouping, APNU, intends to appeal the ruling.
But in the meantime it is hoped that the Chief Justice would issue the final ruling, that would clear up some apparent ambiguities in the preliminary ruling and also offer concrete grounds for the intended appeal.
On Monday, then, we can expect the Minister of Finance to present another record budget as far as dollar spending is concerned. No new taxes are expected but no significant reduction of present mechanisms of revenue collection, such as the VAT, is also expected. The government is adamant that its spending regime in infrastructure and social services has been the driving force of growth over the last decade and these cannot be reduced, as will be necessary, if governmental income is reduced.
On the matter of taxes, in 2011, non-commercial companies benefitted from a five per cent reduction in their tax rates from 35 per cent to 30 per cent of their profits, on the expectation that they would funnel the extra funds retained into expansion programmes that would generate jobs.
It would be interesting to learn whether any such expansion was engendered or whether the profits were merely pocketed. This newspaper has persistently pointed out that the banks routinely pocket billions of dollars in profits while keeping their lending rates sky-high. The government via the Bank of Guyana should control more stringently the safety net provided to banks through Treasury Bills. If lending rates to businesses are reduced to the low single digits that are common in the developed economies, job-creating investments will certainly ensue.
With the constraints on the Opposition making substantive inputs to the budget, their only recourse would be to make proposals on spending and income collection that makes more sense to the voting public. With this in mind we suggest that rather than becoming frustrated, the Opposition craft a budget of their own to which the one presented by the Minister of Finance can be compared.
This would remove the not unreasonable suspicion in some voters’ minds that the Opposition may just be grandstanding by throwing out ‘populist’ numbers.
The country will not gain by having another ‘rumble in the (urban) jungle’ in the Stabroek area.
Where is the BETTER MANAGEMENT/RENEGOTIATION OF THE OIL CONTRACTS you promised Jagdeo?
Apr 19, 2024
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