The Government is praised for presenting what is a tough budget for the rest of the year. In a normal year, a budget is never easy. This year is rendered even more difficult by the election fraud and the pandemic. The economy had come to a virtual halt for several months, worsened by misspending by the preceding regime. The country is in economic crisis precisely because of the economic errors of the preceding regime closing down sugar estates, laying off over 10K workers and taking care of friends, and neglecting the vulnerable.
I applaud the theme of the budget – it is transformational, preparing for the oil economy. It is a poverty alleviation budget. It addresses the issue of the Dutch disease in every sector economy to make sure the country doesn’t fall in that trap and would utilise resources of the oil sector to buttress the rest of the economy. Clearly, the intent is to diversify the economy—the budget gives incentives for agriculture, mining, and manufacturing. Taxes are removed that are obstructionist to investment. And Government is out the paddock helping the poor and vulnerable right away rolling out benefits like school grants.
Benefits are spread through the reduction in VAT, grants for poor and aged, rates lowered for electricity and water, among other benefits. It is noted that oil money is not used to pay for expenditures. I applaud the Government for not touching the Natural Resource Fund (oil money) that must be transparently used. The oil money will be budgeted out hopefully next year for social security and spending in terms of basic needs and must be spread out across the board. The deficit this year is financed through borrowing (bonds), not a long-term borrowing. The Government will begin to repay money soon. Recall that the preceding regime borrowed US$750 million over the last five years. Now this Government has to repay that money.
As Bharrat Jagdeo reminds the country, over half the budget was already spent by the opposing side – the first for any budget of the country. The Government is correcting the accounting books of money already spent and abused. The people feel the spendthrift must be held accountable; they should be investigated and prosecuted if they violate laws.
No matter what the Government presents, it would be criticised by an opposition, never mind that this opposition was fast and loose with the nation’s money. The budget was criticised for reasons not having to do with sound economics and for reduction of taxes and the huge deficits. The deficit is sustainable; it will be paid off with oil money and increasing economic activities. More taxes will be collected since the Private Sector won’t be squeezed as in the past with choke and rob taxes. Money will also be saved as Government reduces its own spending eliminating ARA, SOCU, and fat cats in EPA, drug bonds, and other frauds. Wastage would be eliminated going forward.
I was most impressed with the presentations of Jagdeo, Anil Nandlall, Frank Anthony, and Vindhya Persaud; they are experienced MPs who were very focused and not boring. Jagdeo and Anil’s inputs evoked laughter. Vindi and Frank were serious as was Priya Manikchand. Anil spoke directly about his Ministry. Jagdeo gave a spirited defence of the budget. Others were not so focused and some were all over the place; they are excused for youth and lack of experience.
The public salutes Jagdeo’s closing stewardship of the budget presentation. Much of the public welcome re-opening of the sugar estates; Wales must be re-acquired, they say. Those who partook in financial and land improprieties must be held accountable – jail them is what the public says. Those having a good time at the clubs of the sugar estates must go.
The Private Sector and sugar workers and the poor express profound thanks and gratitude for this budget that attempts to rescue the economy. The budget demonstrates a commitment to vulnerable communities and the suffering Private Sector. There are varied grants for families and pensioners and the sick and disabled. Hospitals would be equipped with medicines. Funds are set aside to combat COVID. The Government has been open and transparent on COVID issues. More is committed now to COVID fighting including testing than under the preceding regime. The Private Sector has been hurting over the last five years and particularly so over the last eight months. The small businesses, in particular, need relief.
The Government is criticised for reducing license fees for businesses; that would redound to the benefit of people. When taxes and fees are down, everyone benefits. With more businesses, increased earnings will be taxed to reduce the deficit.
A huge deficit is expected in any budget. Countries and governments (national, state, local) are reeling from this pandemic. They are all operating under deficits that are normal in such a situation. But ours will be manageable. The Private Sector can’t run on deficit. Government must make up for the shortfall in spending. So one can’t look at Government expenditures negatively. Money will come in over time to correct the budget shortfall.
The Government should encourage and support public-private partnership to bail out both. I would have liked to see money set aside for soft loans for small businesses for creative enterprises and farmers that would be necessary to rebuild the economy.
Overall, a good budget with praises from sections of the public and the Private Sector.