The PPP/C is a rich persons’ government

Jul 24, 2022 Features / Columnists, Peeping Tom

Kaieteur News – The government’s efforts to reduce interest rates for loans below G$6M is bearing fruit. Reports suggest that the banks are prepared to offer a modest, but still welcome, reduction in interest rates.

The reduction of interest rates is a key economic variable that could stimulate domestic investment and the local banking sector. The relatively high interest rates deter borrowing. It increases the cost of investing including in home construction.

The other recent measure announced concerns subsidies in the form of steel and cement – both imported items – to home-builders up to a cap of G$25M. Those buildings which cost less than G$6M will receive steel and one sling of cement free. And those costing between G$6 to G$25M are expected to benefit from two slings of cement.

Low-income homebuilders will benefit from these concessions. But no one has yet quantified the exact saving. If this is done and then compared to the tax concessions with the branded hotels are receiving, a different picture will emerge.

The subsidies of steel and cement will benefit the friends of the government who are into the importation of these items. They will benefit from increased sales, already having benefited from the removal of the taxes on cement.

The removal of the taxes – a feature of every year’s Budget, is not intended to help the small man. It is intended to provide a tax relief to the large capitalist entities that are into the construction of hotels, shore bases and other structures. They are the ones that will benefit more than the G$6M homeowner,

The poor man will have to stretch his $G6M to afford a low-income house. That sum can barely build a two bedroom bungalow. At present prices, it costs about G$10,000 per square foot for a low-income house. It means that with G$6M, a low-income earner will at best be able to afford a 20 foot by 30 flat structure. And since we are talking about a bungalow, it will not require much steel. But the G$25M house will require much more steel.

This is the catch which bourgeois governments employ in order to help their friends. The governments give poor people a concession but the real benefits flow proportionately to the rich.

Large amount of steel will be required will be in the construction of those large hotels and offices which are being erected across the country. Those buildings are steel guzzlers, and some of them are being built with prefabricated steel frames.

The rich classes do not have to wait on a Building Exhibition for the announcement of their concessions. They negotiate that through agreements which are signed with the government offering extra-generous concessions.

Importers do not pay imported VAT on imported building materials. Locally built and fabricated steel beams do not attract VAT. Do you believe this benefits the man who is building a G$6M bungalow?

Government should make public the value of the annual concessions given out per recipient. Then a truer picture as to who really gets the hog of government concessions and subsidies will emerge.

Do not be deceived into thinking that the government is a working class government. The last working class champion in Guyana, Mrs. Janet Jagan, died 13 years ago. That was a woman who was generous when it came to poor people.

She and her husband were working class heroes, not the pretenders who now occupy some public offices. Mrs. Jagan had little regard for them and wanted to know how some of them got such high positions. But by then she was regarded as a private citizen.

There are thousands of potential low-income homeowners who cannot afford their house lots. There are young professionals who borrow money from the banks to pay for their house lots. They do not have the savings and the cost of the land, while subsidized it is still beyond the reach of what they have in their bankbooks.

The working class therefore will welcome what the government is doing by offering them free steel and cement. But they should not be deceived by the concessions offered. For every serving to the poor, the rich gets four times. The government is throwing candies at the people. But it is the bourgeois class which is enjoying the sweetness.

The PPP/C is a rich-persons’ government. It does enough to keep the poor happy by offerings such as what was announced on Friday at the Building Exposition. But the reality is that it is the rich people who are fetching away the contents of the candy store.

(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)