Finance Minister schools APNU/AFC on Govt spending

…after Granger-led Govt left Treasury empty

Finance Minister Dr Ashni Singh on Wednesday schooled former Junior Housing Minister in the APNU/AFC coalition administration, Annette Ferguson, on the financial management and functioning of Government.

He was at the time responding to Ferguson, who had asked how much monies the Coalition Government had left in the Consolidated Fund, and where the new PPP/C Administration got funds from for the 2020 emergency budget as well as for the COVID-19 Cash Relief initiative.
Dr Singh informed the House that the Consolidated Fund was empty when the PPP/C took office on August 2,2020.
“No monies were remaining in the Consolidated Fund as of that date. In fact, Mr Speaker, the Consolidated Fund account was in overdraft in the amount of $78.7 billion. And I might add, Sir, that that amount would not have reflected, as of that date, cheques that were issued but had not yet been cleared, and therefore would not yet be reflected in the bank balance,” he stated.
The Finance Minister further pointed out that if the overall picture of Government’s accounts at the Central Bank were taken into consideration, the net overdraft left by the Coalition regime would be a staggering $93 billion. Again, he explained that this does not cover the aggregate of cheques that would have been issued on those bank accounts and are yet to be cleared.

Dr Singh noted that this $93 billion net overdraft should be contrasted with the last PPP/C Government’s net position when it demitted office in April 2015.
“The [last PPP/C] Government was a net depositor at the Central Bank with an amount totalling $16 billion in the aggregate of Government’s bank accounts in the Central Bank”, he said.
Contending that the Coalition’s overdraft is “even bigger”, the Finance Minister reminded that this accumulation of overdraft was previously flagged by a number of commentators, including international agencies such as the International Monetary Fund (IMF).

However, after this response from the Finance Minister on the state of the public purse when the APNU/AFC demitted office, Ferguson followed up by asking where the monies for the $330 billion 2020 Emergency Budget – which the PPP/C presented in September just one month after taking office – came from.

Finances in dismal state of disarray
But even after Minister Singh explained that these were largely revenues generated by the state daily from services offered, along with grants and loans obtained through regional and international donor partners, the Opposition MP again enquired about the source of the $4.5 billion for Government’s COVID-19 Relief programme, which was also included in the budget.

“Can the Honourable Minister say where exactly these monies, the 4.5 billion that is being distributed as COVID Relief funds to the Guyanese people, where those monies came from… If is the Consolidated Fund or which other fund…,” the former Minister, who had joined Wednesday’s sitting via zoom, questioned.
In response, Dr Singh declared, “For a long time, I tried to understand how the public finances could’ve been left in such a dismal state of disarray. I now understand. The pieces of the puzzle are finally falling into place, sir, because such a display of lack of understanding of the way in which the public finances work could only have resulted in complete and absolute mismanagement of the public purse over the last five years.
“I could be clearer, sir: All of the expenditure provided in the budget and appropriated in the Appropriation Act is financed by the traditional sources of financing of budget and expenditures around the world. Firstly, Government revenues are being collected every day… Secondly, Government grants being received, where we have partnerships with external agencies that we might be eligible for, and we might draw down on Government grants. Thirdly, there is domestic and external borrowing. We borrow for fiscal purposes both domestically and externally. And so all of the expenditures in the budget is financed by one or all of these sources… It is beyond my humble faculties to break these down into simpler terms.”

Falsehood
Moreover, the Finance Minister called out the Opposition MP for trying to create a falsehood of the former APNU/AFC Government leaving behind resources that were used for the cash relief programme.
“The honourable member and her Government were more preoccupied with holding onto power illegally than with bringing relief to the people, and it is an absurdity to come to this House and try to suggest that this $4.5 billion is somehow being distributed by a pool of resources that was left so graciously by our predecessors in office. Quite the opposite sir! When the Honourable Member and her Government finally relinquished the reins of Government, which they were so desperately holding on to, we inherited a staggering overdraft in the public purse,” he asserted.
In fact, beyond the overdraft accumulated, Minister Singh disclosed that the PPP/C had also found a number of other significant sources of indebtedness by several State agencies and entities. He pointed to the fact that several Government agencies owe in excess of $12 billion to the Guyana Power and Light (GPL) Inc – a situation he says has translated into “grave financial distress” for the power company.
“Those numbers are not counted in the overdraft. Obviously, they’re not counted in the debt numbers that are reported, but they constitute liabilities of the state,” the Minister asserted.
Another such liability Dr Singh pointed to is the $30 billion Bond taken by the National Industrial and Commercial Investment Limited (NICIL) to finance the operation of the cash-strapped Guyana Sugar Corporation (GuySuCo). Of that amount, some $17 billion has been drawn already, and according to the Finance Minister, Government will have to cover the cost of the bond if NICIL fails to fulfill the payments.

Opposition at ACCC virtually
Some of the members turned up at the Arthur Chung Conference Centre (ACCC), where Parliament sittings are being held due to the COVID-19 pandemic, on Wednesday morning, but did not sit in the session. Instead, they picked up their documents from their assigned seats in the dome and retreated to one of the Conference rooms, from where some members joined the sitting via zoom.
However, after one of the Opposition MPs had asked a question virtually from right at the Conference Centre Building, Government Chief Whip, Governance and Parliamentary Affairs Minister Gail Teixeira, raised a point of order on the issue, pointing out that this was not in keeping with the arrangements that were made for members to attend the sitting virtually.
“It’s a rather strange occurrence today that Members of the Opposition are in a room in the building… and are participating virtually…. In fact, this is a form of boycott yet participation. I think this House should not condone that. If they’re in this building, they should be in this House to speak… It is not to be abused by the Opposition, sitting in this building and using the internet and everything in another room… This is beyond what is acceptable in this House,” the Government Chief Whip contended.
House Speaker Manzoor Nadir, who had previously indicated that 20 MPs had asked to join virtually, subsequently announced that Members would henceforth not be allowed to join the sitting while present at the Conference Centre.
“Persons who are in the Arthur Chung Conference Centre – the place that has been designated for the sittings of the National Assembly – ought to be present in the dome… After today, if you are here present, I won’t allow your participation virtually,” Speaker Nadir declared. (G8)