Govt announces more groundbreaking measures to cushion rising cost of living
President Dr Irfaan Ali has announced a series of ground-breaking measures, ranging from cash grants to households in hinterland and riverine communities to the provision of free fertilisers for farmers, which are aimed at improving the lives of citizens.
The President made the announcements in a special broadcast on Monday. The first initiative he announced is the distribution of a one-off $25,000 cash grant to every household in the riverine and hinterland communities of the country. This measure, according to Ali, will result in $800 million being pumped into the economy and will cushion the impacts of the rising cost of living.
“The second measure I wish to look at is fertiliser support to farmers in order to cushion the impact of the rising cost of fertiliser on farmers and to limit the pass through to food prices my Government will be purchasing 1 billion dollars’ worth of fertiliser for free distribution to farmers for use in planting and replanting activities,” he said.
According to the President, this initiative is being done “considering that fertiliser accounts for between 15 to 30 per cent of the total operating cost for farmers. This initiative will significantly reduce input cost and help ensure scaled up production and adequate supply of output which is critical to maintaining price stability.”
These two measures, he noted, will be financed by the $5 billion allocated in Budget 2022 for the purpose of easing the impact of rising cost of living of locals.
The third measure announced by the Government, is the setting up a special unit to help landowners of both private and Government-owned lots build their houses. President Ali said the unit will support applicants with the process of applying to banks for financing and with the initial phase of construction by releasing the necessary resources. Persons will also have the option of choosing $7 million, $9 million or $12 million house models, for the Government to help them build.
President Ali explained that, “one issue that has been brought to our attention during our consultations with communities across the county is the fact that many households who now have house lot encounter huge challenges managing the process of contracting their homes. That, of course, is perfectly understandable because managing construction of a house is not a trivial task, considering that most of these families have no prior experience in home construction.”
As such, he said in order to help Guyanese families, a special unit will be established.
“Persons who have a house lot and wish to receive Government help to construct a home on that lot may register their interest with a unit that will be establishing soon for this purpose. At the time of registration, the applicant will also select preference from three standard predesigned models at the cost of $7 million, $9 million, and $12 million depending on the applicant’s income level,” the Head of State said.
“Government will support the applicant through the process of applying for bank financing to meet the cost of constructing the home, would also look at helping in the initial phase of construction by the releasing of resources to expedite the construction process and help in bringing the banks, the homeowners together so that you can own your own home,” he added.
President Ali said that the Government will also help to undertake the construction of the home on behalf of the applicant and deliver to the applicant a complete home in accordance with the option selected.
This measure, he highlighted, “will help to drastically accelerate the capacity of Guyanese families to own and occupy their own home and house lots they have already owned or they have been allocated but on which they are currently having difficulties managing the complex process of home ownership and also having access to the financing.”
The other measure will see the removal of Value Added Tax (VAT) on additional construction materials until the market stabilises. These include sheetrock and concrete boards. President Ali also reminded that these measures are in addition to a wide range of initiatives already announced by his Government to address the rising cost of living and to bring relief to all citizens. He noted too that Government will continue consultations and will in the future make more announcements aimed at bringing further relief to the public.
“As you know we have already removed VAT on a wide range of basic construction materials. Most recently we removed VAT on cement to reduce the cost of this critical input in home construction. We are now proposing to extend the removal of VAT to sheetrock and concrete board until the market stabilises…this measure, I expect to cost a $100 million annually, but will provide critical additional relief to persons constructing their homes, in keeping with our strong commitment to make homeownership affordable to every single Guyanese family,” the Head of State said.
Back in March, President Ali had said during a press conference that the Government is not turning a blind eye to the rise in cost of living. According to him, it is a matter that is being addressed on multiple fronts, which includes addressing input cost and issues at the consumer and market levels. Accordingly, he had cited the $5 billion set aside in the 2022 budget.
President Ali reminded that these measures are in addition to a wide range of initiatives already announced by his Government to address the rising cost of living and to bring relief to all citizens as a result of the COVID-19 pandemic and then the war between Russia and Ukraine.
Since taking office in 2020, the Ali-led Administration has introduced several measures to put more disposable income in the pockets of Guyanese. From the onset, VAT was removed from water and electricity. There has also been the increase in old-age pension and public assistance, putting $2.3 billion and $432 million, respectively, into the pockets of Guyanese.
Additionally, the PPP/C Government had reinstated the “Because We Care” cash grant and school uniform cash grant which stands at $30,000 per child in both public and private schools. In addition, a $25,000 per household cash grant was rolled out to assist families struggling during the pandemic.
Moreover, the Government had announced a one-off cash grant of $25,000 to all pensioners where almost 65,000 persons benefitted; this measure placed a total of $1.6 billion in disposable income into the hands of the elderly population.
A one-off grant of $25,000 was also given to all public assistance recipients and persons living with disabilities. This grant benefited about 25,000 persons, and placed more than $600 million in additional disposable income in their hands.
Further, a one-month free electricity for households consuming not more than 75 kilowatt per hour a month was announced – a measure that was intended to benefit some 40,000 households.
Meanwhile, President Ali said his Government will continue consultations and will in the future make more announcements aimed at bringing further relief to the public.
“So, our Government is continuing this exercise of consulting to see the best possible measures that can be brought on stream to support those groups,” the President said, referring to vulnerable sections of society.