Every year, Focus tracks the implementation of the key issues and policies identified in previous Budget Speeches. Where it seems clear that some issues have been abandoned, such as the Tax Court and legislation on bankable property rights, we disregard these.
In 2009, with the exception of one item, we decided not to bore readers with repetition of the fourteen issues identified as unfinished business in the 2008 Budget Focus. That item was the Justice Improvement Project on which the Minister had announced that $1.8Bn would be spent on strengthening the country’s judicial system in 2009. We noted our difficulty in determining the composition of this amount, and wondered whether the judiciary had the capacity to absorb the expenditure. Those concerns remain.
If we proceed from 2008, the main issues outstanding from previous years are:
● Feasibility work to be done for alternative generations of energy form wind, solar, hydro and biological sources – No progress report but it is already obvious that expectations for any major Hydro-Electricity project were way too optimistic. With LCDS being the new mantra, these would warrant high priority. In his speech, the Minister announced $4Bn for hydro.
● Freedom of Information Act – The PPP/C had committed itself to such an Act in its 1997 Manifesto “within that term.” Twelve years later, the Government resists in the National Assembly the passage of such a Bill initiated by the opposition. This is regrettable since such legislation guarantees every citizen the right to public information and strengthens accountability.
● The Deeds Registry Act – No progress. The Registry is the regulator for the Companies Act and this Act requires setting up of an advisory board. Failure means that a 19th Century regulator is being asked to regulate a 21st Century piece of legislation. Current attempts to review one of the functions of the Deeds Registry seem extravagantly misguided and ill-informed.
● Review of the Companies Act, 1991, the Partnership Act, the Business Names (Registration) Act and the Friendly Societies Act – Nothing was done on the review of the Companies Act 1991, despite a pledge by the PPP/C in their 1997 Manifesto. Ever since the Companies Act was introduced in 1995, it was acknowledged that there were both errors of commission and one particularly significant omission in relation to non-profit organisations creating particular difficulties for such organisations. Additionally, as companies, attorneys and academics began to apply the Act, certain additional areas of difficulty have surfaced, while new legislation such as the Banking, the Financial Institutions and the Insurance Acts, all have some impact on the Companies Act 1991.
● Action plan based on the Labour Market Study as addressed in the Draft 2005 PRSP Progress Report – There is no indication whether this has been done. It seems that the Government is avoiding any issue in relation to employment and unemployment.
Full implementation of the Fiscal Management and Accountability Act – The Minister’s and the Government’s disregard for this Act – the showpiece of the country’s commitment to transparency and accountability – borders on contempt. The Government carefully and apparently with good reason, avoided a proposed amendment to the legislation that would have rendered Ministers liable to prosecution. The Minister should be sanctioned for his serial violations of this Act.
● Establishment of a family court – Committed to several years ago – and again by the Minister in his 2007 Budget Speech. A building to house the Court is now being constructed in the compound of the High Court, which many social workers consider insensitive.
● Review of tax exemptions – The Minister announced in the 2008 Budget that he would conduct a study of the tax system to determine the procedures for the implementation of further tax reform. See Tax reform, below.
● Reform of judiciary – As a result of a court decision the positions of acting Chancellor and Chief Justice have been decoupled and three judges including the judge of the Commercial Court have been appointed to the Court of Appeal. The Minister has announced measures under a new Justice Improvement Project but the results of several years of such effort have not been very successful.
● Bank of Guyana Reform – No report.
● National Drug Strategy Master Plan – Measured by successful prosecutions, this Plan has had minimal effect and cannot be separated from a more comprehensive Crime Plan.
● The Institutional Strengthening Project in the Office of the Auditor General. More money being spent but results uncertain. This project substantially funded by the Inter-American Development Bank, approved in December 2006, is still in the implementation stage. There is an unwillingness to confront the real issues that deprive the office of any effectiveness – financial control, conflicts of interest and low capacity.
Tax Reform
This is perhaps the only year when the Minister did not announce that some foreign agency was engaged on some nebulously defined terms of reference to review the tax system. Both personal and corporate tax rates are the highest in the region; the capital gains tax and the property tax legislation cry out for reform; the tax laws encourage and reward tax avoidance and evasion. VAT is an anti-consumer tax that is widely abused by segments of the business community which do not bear the tax.
The Minister recognises the annual and immoral windfall he receives from VAT and the taxes he can gather from about a handful of major tax payers. Reforms to date were designed to increase tax take, not for redistribution or expansion of the economy.
The second and major unfinished business, which goes beyond the Minister of Finance but of which he is also the centre, is the matter of the National Procurement Commission. The Minister and the Government must be aware that the tens of billions in contracts under the capital and recurrent budget are the subject of strong suspicions, if not outright violations.
These latter two issues must surely be the cause for national and public concern, demanding urgent Government action.