Nov 30, 2017 News
While Budget 2018 provides a number of positive fiscal measures, the Private Sector Commission (PSC) is still disappointed with Government’s failure to address certain fundamental issues. It identified some of these to be income inequality and the proper management of resources and public enterprises.
The Commission made this, and other remarks, in a missive to the media last night.
The PSC said that many would agree with the fundamentals set out in the Budget and the targets it sets out to achieve higher growth for more and better jobs, the need to invest in skills development and growth and employment in the productive sectors.
The Commission said, “There are, of course, other fundamentals that this budget should be addressing: the reallocation of resources, the reduction of inequality in income and wealth, ensuring economic stability, the management of public enterprises, and the reduction of regional disparities. The question is, to what extent has this budget addressed these fundamentals?”
It continued, “It is too early for the Commission to offer a comprehensive analysis on the Budget, but we can legitimately ask whether this Government’s Budget is committed, in real terms, to the vision it speaks to of improving the quality of life of its people.
“We recognise that the measures in the current Budget will have a positive impact on local businesses.”
“We believe, however, that distinctly absent from the budget is those measures necessary to sufficiently reverse the negative impact of the measures in the 2017 Budget, for instance, the VAT on electricity, the VAT on agricultural and mining machinery and inputs.”
The Commission expressed disappointment that there is no clear policy enunciated for addressing a projection on the level of corporate taxation based on which the business community can reasonably plan future investment.
It reminded that this was a recommendation which was put forward to Finance Minister, Winston Jordan.
The Commission said, “We compliment the Minister on the monies allocated to education, but, we urge the Minister to put in place, systems to ensure an adequate return on this investment and that these monies result in the acceleration of human development.”
The PSC noted that the Budget recognises that the challenges faced by the public health sector are many and, by the Minister’s own admission, point to the shortage of drugs and problems of procurement. In this regard, it stressed that there is a need for a policy to address the shortcomings.
It said, “We note that, with regard to energy, the Budget, consistent with Government’s long expressed position, has abandoned the Amalia Falls Hydropower Project.
“It advances a mix of energy projects, but offers no clear indication of the cost of investment in the energy mix and the future cost of energy per kilowatt hour.”
On the issue of Oil and Gas, the Commission said it expected that Budget 2018 would have said more than seven paragraphs on Guyana’s preparation.
The Commission said it is obvious that the Government should already be engaging the services of industry experts to negotiate and engage, as equals, with multinationals such as ExxonMobil.
It noted nonetheless that the budget is peculiarly silent on the need to build capacity for oil and gas.
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