Budget 2018, the fourth such budget under the coalition Government, is scheduled to be presented by Finance Minister Winston Jordan in the National Assembly today (Monday). Going into the budget presentation, there are a number of expectations for areas in which the Government will have to do better when compared to previous budgets.
One such area is the implementation of the Public Sector Investment Programme (PSIP), the poor implementation of which can have a negative effect on the economy. But more than that, the parliamentary Opposition is holding out hope for concrete measures that will directly stimulate the economy and create a good life.
As a start, People’s Progressive Party/Civic (PPP/C) parliamentarian Juan Edghill pointed out that there should be measures to ensure job creation. This, he said, means the Government must be able to lay out its strategy for creating jobs in the mining, tourism, manufacturing, rice, agro-processing and the general agriculture sectors in Guyana.
he National Assembly where Finance Minister Winston Jordan will deliver his fourth budget speech in just less than three years
“The Budget must address the retaining of jobs. We have seen, over the years, thousands of jobs being lost. This budget must have some measure that would allow for the retaining of jobs, which would include addressing the issue of sugar and the impending loss of jobs in the sugar industry.”
“Secondly, it must address the creation of these jobs. Because we have too many young people who are unemployed and we have too many adults who were in jobs and have lost jobs and are now in the ranks of the unemployed.”
The Opposition Member of Parliament (MP) also stressed the need for new foreign direct investment to be brought to the country, something he pointed out the Government has failed to do, but has instead maintained PPP/C-procured investments.
“The Budget must send a signal to the Private Sector, both local and international, that Guyana is a good investment destination. All the signals they have been sending so far are chasing businesses away. There have been layoffs, contractions; the Budget must be able to address those things.”
The former Minister within the Finance Ministry also noted the role played by a reliable supply of electricity in almost every sector; hence, the Guyana Power and Light (GPL) power generation woes were not forgotten.
“The Budget must address the issue of poor, unreliable and inadequate electricity supply,” he said. “If we have a budget that doesn’t address bringing reliable, renewable, cheap electricity to Guyana, we are wasting time because that is the catalyst for transformation in Guyana’s economy.”
Edghill expressed the need for Value Added Tax (VAT) to be removed from education and medical supplies, as well as in sectors where it has had a negative impact. He lamented the fact that despite the Party trying to use the parliamentary channels to get it reversed, its motion has been stymied.
On the issue of Old Age Pensions, Edghill called for a substantial increase rather than the usual “pittance”. The pension has been incrementally increased since the Government took office, moving from $18,200 to $19,000 in the last budget.
“APNU/AFC [A Partnership for National Unity/Alliance For Change] promised huge increases to pensioners. And it is time that they fulfil their promises. And we are not expecting a pittance,” he stressed.
In the Government’s 2015 Budget, some $221 billion was declared in funding for the fiscal plan. The Budget was even more substantial in 2016, with a whopping $230 billion being announced. Under the theme “Building a diversified green economy: delivering the good life to all Guyanese”, Budget 2017 was read last year with $250 billion being allocated.
The economy
But on a sector by sector basis, the last report on Guyana’s economy tells a worrying story. The Finance Ministry’s half-year report, which was released in July of this year, had showed contractions in certain sectors, when compared to the corresponding period in 2016. The declining sectors had included sugar, livestock, forestry, mining and quarrying and even the bauxite industry.
It showed that sugar production was recorded at 49,606 tonnes at the half year and when compared to 56,645 tonnes during the first half of 2016, represented a decline of 12.4 per cent. The livestock industry also contracted by 10.9 per cent in the first half of 2017, as heavy rainfall severely affected production, second-quarter production was even more so affected.
The forestry industry also showed an 18.2 per cent reduction in the first six months of 2017, compared to the same period in 2016. Declining production within the forestry industry was due to structural changes in the industry.
The mining and quarrying sector contracted by 4.0 per cent, during the first half of 2017. Gold production fell by 1.7 per cent to 317,096 ounces, in the first half of 2017, compared to the same period in 2016. Also, the bauxite industry declined by 11.5 per cent, as a result of reduced production of higher value grades.
This was on account of poor weather combined with mechanical issues at one of the mines. However, production of metal grade bauxite (MAZ) increased by 97,016 tonnes or 21.3 per cent, the half-year report had stated.
The report coincided with the trial period for the broadened imposition of the 14 per cent VAT on production in most sectors – even the education sector.
