A forward-looking budget that sustains growth and employment

Dear Editor,
As for other budgets, in recent years, I was present in Parliament and listened to some presentations. It was not a debate, like those of presenters of previous years (1970s thru 90s), when there were sharp, witty, humorous remarks that evoked laughter among members and the audience. There was hardly any serious address, or any real debate that left lasting impressions from either side.
But one positive aspect is that there was no lewd, lascivious, misogynistic remark; nor was there any disrespectful presentation that denigrated members of the other side about their sexuality, family, gender, etc — remarks that had brought the chamber into disrepute.
There was a lot of heckling, mostly from the Government side. Some of it was not necessary, but it has become habitual. One had to be in the chamber to hear or see it; youths and the nation in general would be turned off. Hecklers don’t carry respect from the public.
And almost every member was on the phone, presentations were hardly listened to, thereby disrespecting the contributions of colleagues.
As I learned from pursuing a post graduate degree in Economics and in teaching the subject, no budget (not even in America or India) is without controversy, and no budget is liked by everyone. There were several positive aspects of the budget, and there were some negatives or items that Government could have included or given additional revenue.
I travelled around the coast engaging people, and others conducted interviews for me on the budget and contemporary issues. There was an overall positive response to the budget by the public.
The opposition’s role is to criticize the budget, and there was much of that. Only a few members on the government side focused on how the budget would transform the economy, and only a few opposition members were fair and objective.
Almost every member on the ruling bench focused on history, reminding the nation of the terrible governance of the PNC (APNU) during its 33 years in government. I suppose that, in an election year, that makes for good politics. Opposition Leader Aubrey Norton erred in ‘proudly defending’ the ban on food items during the Burnham era.
Overall, the budget aims at inclusive development. The continued focus on capital expenditure and income-tax relief set the stage for continued growth. It was a politically crafted, populist budget in an election year, with huge allocations for health, infrastructure, education, agriculture, social welfare, and other ministries. There was almost something for everyone. Every ministry got an increase. The Natural Resources Ministry brings in the most revenue, but got one of the smallest allocations.
The budget strengthens infrastructure – roads, bridges, airstrips, electric power, etc. Increased investment in infrastructure and social welfare would drive inclusive economic growth. Agriculture, a key pillar of the non-energy economy, received significant resources with the aim of enhancing productivity, which is critical for food security.
A significant amount of money has been given back into consumers’ hands via personal tax rate cuts without disturbing any other macro consideration, although it could drive inflation, which is already very high. Putting more money in people’s pockets would boost consumption and add to growth, but it would also lead to increased imports and dry up foreign exchange.
Higher disposable income, as learned from lessons in economics, is known to trigger a vicious cycle of higher consumption and increased imports, which hurts an economy, if not managed well.
The revisions in personal income and corporate tax rates, under the new tax regime, would significantly reduce tax liabilities and offer welcome relief to middle-income earners and corporations.
Overall, people I engaged around the country were pleased over the income tax relief, taking home more spending money for household expenses. However, it benefits a small fraction of the taxpayers, as more than half of the workforce earn below the tax threshold. Lower-income groups remain untouched by any direct tax relief. Government should have added a scheme that directly benefits those outside of the tax threshold income. The low-income and lower-middle-class populations, who barely earn enough to sustain themselves, end up paying a lot in VAT on essential goods and services that they can’t afford, while those on higher income threshold, with lower taxes, have more disposable income to pay for such goods and services.
The Government could have offered some kind of relief to the poor, like subsidies on essential goods (particularly staples like flour), medicines, utilities, etc. Schemes should shield the economically weaker section of the country.
Policy must be directed at inclusive economic growth for all segments (classes) of the population, not just the upper, middle, and business classes.
The budget would give a boost to the aspirations of young professionals who are already in or are entering the workforce. Specifically, greater consumer spending would benefit retail and real estate, boosting employment opportunities. Enhanced spending can further drive infrastructure development, boost employment generation, and catalyze economic activity across all sectors. And, of course, it strengthens the logistical backbone throughout the economy, ensuring long-term growth and employment opportunities.
The increased funding for entrepreneurial startups is welcome. I would have liked to see significant funding for an internship scheme in ministries and the private sector.
Also, there was not much emphasis on maritime development. The marine economy would assume importance as people move away from growing food. Developing sections of the coast would create growth opportunities for trade and related segments of the emerging blue economy. Government could have offered farmers crop insurance against floods, drought, insect invasion, and other threats. There could have been more resources for enhancing post-harvest storage infrastructure, improving irrigation facilities, transforming the agricultural landscape, increasing rural incomes, and driving economic activity in the hinterland. Higher rural purchasing power would indirectly benefit the corporate sector, particularly those involved in consumer goods and agricultural supply chains.
More resources could have been devoted to improving rural and hinterland livelihoods, because the budget appears more urban-centric. Also, Government could have established an agency to look at economic diversification, so to avoid the resource curse. An agency could have been created to advise or reorient efforts on good or better governance. It is not clear whether there would be realignment of education and skilling and reskilling strategies for new workers and those already in the workforce.
A critique of the budget is the lack of a clear goal. A budget is not merely an accounting exercise, but also a platform for the Government to present its economic vision. A vision was not very clear – what long term goal the country has; what it would like to see Guyana become; will Guyana become a health or tourism hub; should the country delve deeper into agro-processing; will there be a manufacturing hub, say, for fertilizers or other products; etc. A ‘one office’ to ease the process of getting permits for business would be welcomed by investors.
The overarching framework of the budget suggests it is proactive and forward-looking. As businesses and stakeholders begin to analyse, and the public adapt to, the new measures, the true impact of Budget 2025 would be unfolded in the next few months.

Yours Sincerely,
Vishnu Bisram (PhD)