As far back as the 19th century, then British PM Gladstone pointed out that Budgets “are no longer affairs of arithmetic, but in a thousand ways go to the root of prosperity of individuals, the relations of classes and strength of kingdoms”. Very broadly, the objectives of a budget in a free enterprise economy fall under six headings. The various objectives of Government budget are: the reallocation of resources among the various sectors; reducing inequalities in income and wealth through redistributive policies: stabilising the economy: managing public enterprises; fostering economic growth, and reducing regional disparities.
First and foremost, a budget is literally an opportunity to see whether the Government is putting its money where its mouth is: a concrete expression of its policy priorities. Governments make all sorts of promises in policy statements and policy papers, but it is in their budgets that we see whether those policies are being implemented or whether the statements were merely Public Relations. Of course, a budget captures Government’s income and expenditure for one year, and not all policies can be implemented within that time frame.
PPP governments have traditionally been sticklers for translating their manifestos’ policies and goals into their budgets, to make decisions in raising revenues, and spending it to satisfy the country’s competing needs. So, they should have an easier time in explaining their policy choices. Both sides of the equation ought to be examined: what revenues would be brought in, and how they would be spent. In the past, most revenues came from taxes, loans and grants, but now everyone expects that, with oil revenues flowing in, all needs can be satisfied. Are the taxes still too high, both on individuals and businesses? It is up to the Government to defend the policy choices they made, especially at this take-off stage from the poverty we have been mired in for so long.
One of the most salient criteria in our polarised society will be to determine whether the spending is equitable. There will be, of course, the usual accusations by the Opposition of the Government discriminating against their constituency, and this will be the major sticking point during the debate. But we must also look at whether there are regional and municipal variations that are meant to address differing relative poverty and deprivation levels. It is very important to examine clams about equity across all fault lines with factual evidence, and not mere perceptions and allegations. All Budgets have a redistributive function that is meant to address concerns about equity geographically, horizontally and vertically.
Contraposed against concerns about equity is to examine whether the funds are being expended efficiently; that is, to get the biggest bang for the buck. For example, were funds allocated last year spent? And if not, why? The Government has to ensure that those bottlenecks, whether in materiel or manpower, are resolved. The Government’s massive capital investment must be questioned from this perspective. However, we must not sacrifice bureaucratic efficiency for equitable goals, since the function of all budgets is to improve the lives of the people.
Then there is the question of effectiveness: Is the spending in sync with our national policy priorities? Or are they being frittered away on boondoggles? There will always be disagreement on specific issues or policies, but the test must be that the country would benefit. For instance, all Guyanese would agree that high-cost electricity has been a major constraint on our manufacturing expansion. Is the spending on the Gas-to-Shore project the most effective path to solve this challenge? Are there alternatives in view of availability of the gas in terms of timing in lowering electricity costs? Infrastructure has also been a major constraint to business and citizens. Is this also been addressed satisfactorily, accepting that there is no magic wand to have everything done immediately? In Guyana, transparency in the decision-making process on utilizing revenue and matching them to spending has always been a bugbear. Questions about consultations with as wide a swathe of stakeholders as possible must be made.
