Dear Editor,
The 2016 budget was about beckoning the ‘good life’ and we saw what happened: rising cost of living, drastic decline of rice and sugar production, contraction of the manufacturing sector, decline in the livestock sector, decline in the forestry sector, construction declined, rising unemployment especially among youths, rise in crimes, wage freeze in the sugar industry, paltry wage increase in the public sector, increased taxes and a reduction in the real growth of the economy to 2.6 per cent, while the Ministers and other Government officials enjoyed salaries increase ranging from 50 per cent upwards! This is compounded by the massive and shameless squander mania which the Government at all levels has been engaged in. You do not have to be Einstein to see who enjoyed the ‘good life’ in 2016!
Well, we must give the Finance Minister some credit for the 2017 Budget’s theme; he ensured that he informed us that this budget will be “…bringing a better life for all Guyanese”. So it is implied that if the 2016 Budget failed to give us a ‘good life’ (which it did) then this one will surely bring it! Lenin once warned that “a lie told often enough becomes the truth” and this was perfected by Adolph Hitler. A ‘good life’ and a ‘better life’ repeated often enough will convince Guyanese that they are indeed living a better life even on an empty stomach.
However, the Leader of the Opposition Bharrat Jagdeo made an accurate assessment when he lamented that the 2017 Budget will not benefit the working class and will ‘kill the private sector’ and its ominous signs forebode an equally gloomy future.
Firstly, we have the exact opposite to what the previous Government did to alleviate the sufferings of the pensioners. Pensioners were given electricity and water subsidies which went a long way in ensuring a ‘good life’ for them, unlike this Government which introduces a 14 per cent VAT on those two vital utilities. Similarly, it is not a valid argument that pensioners will not be affected by the imposition of VAT simply because 105,000 residents pay less than ,000 per month. How many pensioners are in this category? It is beyond any doubt that pensioners would have been better off with the electricity and water subsidies. Moreover, how will they be better off when they have now pay VAT on staples such as milk, potatoes and many other necessities? These items are consumed on a daily basis! Therefore, how can no subsidy on water and electricity, plus VAT on necessities, result in a ‘better life’?
Secondly, the negligible reduction in VAT will not result in any tangible gains for the consumers since items which are normally consumed by the working class and were previously zero-rated are now VAT-able. What will happen to sugar workers who have been denied any form of wage increase for the past 2 years? An ever increasing inflation rate will spell disaster for them and their families. This reduction in VAT will only serve to benefit the more wealthy class of people who consume expensive luxurious items.
Thirdly, what will be the cumulative effect (the Domino Theory) of an imposition of VAT on electricity and water? Will these not increase the production costs of goods and service? Most definitely, and the commercial sector will have to recoup these costs and of course the final consumer bears the burden.
Lastly, the 2017 budget shows clearly that the Finance Minister is just an adroit juggler whose main intention is to squeeze as much taxes as possible from the poor working class of people of this country and ensure that the excesses of this Government can be sustained and not its socio-economic development. Monetary and fiscal policies which can stimulate the economy are sorely lacking in this Budget. Next year will definitely be worse than this year. I am sure that the Opposition will expose the inherent weaknesses of this Budget!
Yours sincerely,
Haseef Yusuf
