The analyses of Budget 2019 are ongoing and soon the $300 billion odd package will be debated in Parliament. Unfortunately, if the past were to be a guide, there will be little or no room for any meaningful change that may be proposed by the Opposition due to the Government’s majority in the National Assembly.
The Opposition has already branded the budget ‘visionless and disappointing’, while the Georgetown Chamber of Commerce and Industry (GCCI), having noted that some money will be coming back into the hands of consumers, has expressed disappointment over the non-reduction of the Excise Tax on fuel.
From the Government standpoint, the budget is another major step towards fulfilling its promise to provide a good life for all Guyanese and sees as vital that new taxes were not announced. It is confident that will ensure no additional financial burden be imposed on taxpayers and, along with the other measures announced, providing that ‘good life’ seems on track. In announcing increases in the Income Tax threshold, old-age pension and public assistance, the Government is seemingly brimming with confidence to deliver its elusive promise.
Expectations of the ordinary citizens are always rife at budget time. For them, the bottom line is always basic bread and butter issues; will they be earning more? A cursory look through the relevant sections does offer some encouragement that workers’ income will in effect be increased resulting from the upward movement of the tax threshold. Similarly for pensioners and those who depend on public assistance. However, the reality may be vastly different when the magnitude of those increases and the actual value in terms of spending power are taken into consideration.
Come 2019, the Income Tax threshold will go upwards by $5000 and those who earn above $65,000, the necessary tax regime kicks in. In reality, for that group, the increase is less than $5000. Pensioners will benefit from an increase of $1000 per month which is equivalent to just one modest fast-food meal or three loaves of bread for the 30-day period. Those increases must have sounded good during the presentation but the harsh reality would be the lack of effectiveness on people’s spending ability.
Fuel prices, which generally determine the cost of commodities, have quietly crept up. Transportation and manufacturing costs would be unmoved and with constantly rising food prices, the announced increases will be of little value. While it is something despite the miniscule amount, it is not as exciting as it was made out to be.
Of course the Government will boast of implementing necessary measures to increase workers’ income and no new taxes for 2019. The preference will be to highlight the increases in terms of percentage as against the actual sum given the assumed public relations and political value for higher figures relating to benefits seem to bode well with the mind. It will therefore make interesting reading when the various analyses, especially from the labour unions, are made known.
With regard to the no new taxes, a plethora was already unleashed on the working class since the 2015 to 2018 budgets by the current Government. That broke the backs of many and precipitated a vast reduction in disposable income which redounded to lesser spending and sloth in the economy.
Aside from the closure of sugar estates and the devastated effect it continues to have on the lives of thousands of workers and their families, hundreds of other jobs continue to be lost as businesses close due to the lack of the necessary enabling financial environment.
This budget, and the Government’s previous four, have done little to address or reverse those worrying trends and to create jobs. As a matter of fact, its projected growth rates were not met and in some cases readjusted downwards. That in itself speaks volumes over the lack of holistic effectiveness of Government’s budgetary measures.
One can argue that it probably became cognisant of the hardships it imposed on the populace since 2015 with that point effectively brought home by the results of the recently held Local Government Elections. On the heels of the Government’s dismal showing, salary increases were announced with tax-free retroactive pay and the sudden announcement of social projects including a proposed hospital for the Sophia area.
That was not a subtle reaction to make its promise appear as not just a promise. With its own support base utterly disappointed over the lack in delivering the promised good life, the Government would have been hard-pressed to announce any new tax measure. It could also be that there is little or nothing left to tax.
In the context of the realities on the ground, Budget 2019, given its size it terms of its sum, pages and the probably the longest presentation in the nation’s history, may either be an exercise in verbose prowess for maximum screen time to realistically and ironically say little; an endeavor to create a façade to mask the lack of substance; unbridled hope and high expectations for oil revenue down the road. Some may conclude it’s a combination of all three.
