Former finance minister Carl Greenidge yesterday dubbed the 2011 National Budget a well-crafted election tool which fails to address critical issues such as widespread poverty and unemployment.
Greenidge was present during Finance Minister Dr Ashni Singh’s three-hour presentation at the National Assembly, which heard of investment in more housing, an increase in the personal income tax threshold, reduction in the corporate taxes, and increases in the payouts for old age pension and public assistance. “It seems to me to be clearly a budget to which a lot of thought has been given and it has in that way been crafted with maybe two objectives in mind; one with an election in 2011 so that it has a lot of goodies for business sector, for the old age pensioners and so forth and it has at the same time a number of political statements many of which have no connection with reality,” Greenidge said.
According to him, while the finance minister had noted the number of laws that were passed in the areas of security and public accountability, the last 10 years “have been the worst” in those two sectors locally. Further, he alleged, all of the records from the Public Accounts Committee and parliamentary sittings for the period 1986 to 1992 were destroyed or removed from the parliamentary records.
He added that people need to know what became of those records if the government wants to speak about accountability.
Greenidge, an economist who was employed with Caricom’s Office of Trade Negotiations (OTN) up to last month, also slammed the government’s practice of returning to the National Assembly after the budget for supplementary pay outs. “The budget is supposed to give you a total picture, on the one side is expenditure, on the other side funding and I’m saying that the expenditure side remains suspect because we have seen in the past a significant proportion of expenditure emerging by way of supplementaries during the course of the year.
That means the picture is inadequate and we are not able to tell the accuracy of the figures pertaining to the real deficit and the impact of funding of the deficit on inflation,” he stated.
He added that budget should also be addressing issues such as poverty and unemployment, both of which were not represented in the minister’s presentation. “The minister made great play of the investment in housing and I think that is great but you know if you provide people with housing but they are unemployed they will consume the houses, meaning that they will eventually become destroyed because you are unable to fund the maintenance of the housing.”
According to Greenidge, a more aggressive approach needs to be adopted to tackle unemployment—a phenomena he has seen a lot on his campaign to be the PNCR’s presidential candidate. He also called for the completion of the tax regime reform. “I wouldn’t call reducing corporate taxes by 5%, [and] adjusting the personal income tax threshold by a few thousand dollars reform, because even within the group of poor and those who fall below the $40,000 threshold there’s need for more nuanced attention. So the question of tax reform outside of that remains. I’m not saying what is done is not useful, one has to recognise that something has been done, these will be of benefit to some of the poor but it will also benefit others who are not poor.”
As finance minister in the Hoyte administration, Greenidge headed the Guyana teams which negotiated agreements such as Paris Club and the first programme for the clearance of arrears to the Multilateral Institutions under the so-called ‘Intensified Collaborative Approach’ for chronically indebted countries and buy-back of commercial debt, on which successful management of Guyana’s Economic Recovery Programme and HIPC eligibility were based.
