Carl Greenidge, Shadow Finance Minister for the main opposition APNU, yesterday wrote off the proposed national budget as one that has ignored severe national problems, such as high unemployment, poverty and high taxation, and he questioned how government could expect any support while it continues to break the law.
Greenidge, who served as Minister of Finance under the PNC administration, was the first speaker as the week of debate on the proposed budget began. The consideration of the estimates, a line by line examination of allocations for expenditure, will begin next week. The budget was presented last week Monday.
Addressing the National Assembly yesterday, Greenidge said Guyana is facing severe problems, including unemployment. “That high rate persists despite an unprecedented flight of Guyanese from these shores,” he said, while arguing that the exodus of Guyanese has left the country where it has started off in the 1960s, with a population similar to that of Trinidad and Tobago but which now struggles to be half of that of Trinidad and Tobago.
“The problems faced by Guyana that contributed to that flight include simmering communal and other tensions, one of the highest rates of suicides in the world, a growing army of destitute and mentally ill persons on our streets along with hordes of unskilled and often hopeless youths,” he said.
He also spoke of the situation of solid waste disposal in the country and questioned whether it was not a deliberate policy to dispose of solid waste in a manner that defies public health standards and practices.
“The APNU continues to draw to the Government’s attention the need to address these burning issues,” he said, while lamenting that “the calls have been resolutely ignored.”
Greenidge recalled that in the run up to the laying of the 2012 Appropriations Bill, the opposition APNU and AFC agreed among themselves that they would only support a budget which addressed the key concerns, which the government was called upon to address.
He added that while the points were again raised in the tripartite talks, last year’s budget failed to meet the demands of the opposition for changes to stimulate growth and improve the quality of life for ordinary people. They remain the major concern for APNU, he added.
“The opposition’s demands at that time were a reduction in the VAT, the reduction in toll rates for the Berbice Bridge, an increase in the salary of public servants, an increase in subvention to the University of Guyana, a removal of the constitutional offices from budget agencies as captured in the Fiscal Management and Accountability Act [FMAA], the call for the government to restructure GuySuCo and Guyana Power and Light [GPL],” he said.
Also among the demands, he said, were the need to restructure the National Industrial and Commercial Investments Limited (NICIL) and to ensure that its finances are treated within the ambit of the Consolidated Fund, the restructuring of both the Government Information Agency (GINA) and the National Communications Network (NCN) and the establishment of the Public Procurement Commission. “There has been very little discussion on most of these matters in the budget statement itself and even less provision in the estimates,” he, however, noted.
No pro-poor
programme
Greenidge said institutional weaknesses hinder effectiveness of the policies which are fashioned and intended to enhance growth and development. “One would have hoped that the budget would have paid some special attention to building the human resources capacity in Guyana and in that way increasing the quality of the human resources we have,” he noted.
However, he said that since the coming into being of the National Competitiveness Strategy, there seems to have been a shift away from poverty alleviation. He pointed on that these strategies should not be competing against each other but complementing each other. “The APNU itself had expected that a pro-poor programme would have been a significant pillar of government policy,” he said.
But he contended that of late the government seems to be more concerned with flagship projects instead of those meant to bring poverty alleviation. “The government seems to feel that dealing with poverty is not their responsibility… that it is the responsibility of the donor community,” he said. “As a consequence, when those donor funds have been reduced, the projects of this type have been denied funds,” he added.
He said that it is appalling that government could not see it fit to raise the Old Age Pension to $15,000 at a time when revenue levels have increased substantially and at a time when VAT collections are significantly higher than the preceding year.
President Donald Ramotar’s commitment to setting up of a tax review committee to address tax reform, including a reduction of the VAT, was also highlighted. “We have nothing in the budget [on the work of this committee],” he said, noting that the committee was to have met and reported to the parties within 2012.
He said that for low income earners, VAT is paid on almost all of their purchases. “The idea that VAT is a luxury tax is so ridiculous as to not merit further comment,” he said. “VAT and Consumption Taxes are regressive taxes and were not high on the priority list of economists since they bear more heavily on the lower than the higher income groups,” he said. “This means that it takes a smaller proportion of the income of the well off than [the income] of the poor.”
The total amount collected by VAT and the total number of persons affected by it is far wider than the Consumption Tax, he added, while emphasizing that VAT is not more equitable and has always been a regressive tax. He said that the VAT had to be accompanied by an adjustment of other taxes.
“My grandmother was fond of saying, ‘God don’t sleep’ and there is an electorate out there which includes the poor, those who pay VAT and there will come a time when you will have to turn to that electorate and they will not forget this bad faith on the part of the President and the PPP,” he said.
Breaking the law
Greenidge also lamented that while the National Assembly is being asked to look at the estimates, the basic requirements of the Constitution are still the subject of infringement by the government. “Article 222 A says that in relation to entities which are supposed to be independent, the annual subvention should be reflected in the estimates by way of an annual subvention approved by the National Assembly,” he said. “They are supposed to be reflected as a lump sum in the estimates,” he said, adding that instead the administration has continuously flouted the requirements of the Constitution and ignored the calls and the decisions and resolutions of the House, passed to amend the FMAA. “In spite of this… we are being asked to approve a budget…to join the government in breaking the law,” he said.
Greenidge pointed out that the government seems to have its priorities skewed. He said he noticed that there is an allocation for the Office of the First Lady with resources made available to it. “I am not saying that this should not be there but I am saying that just as this could have been added—it has not caused a crisis in the Ministry of Finance, it hasn’t caused a collapse in our debt status or anything like that—in the same way the constitutional offices in addition to the Ethnic Relations Commission should have been reflected in this section. Is the government going to ignore the constitutional requirements and at the same time ask us to approve monies for them?” he questioned.
Greenidge also spoke of the president refusing to assent to bills passed by the opposition and said government must consult with the majority to seek its support in order to have its bills passed. He said that government is demanding the rights of a majority when it is a minority in the House.
Turning to the allocations proposed for GPL and GuySuCo, he said the opposition does not believe that the sums made available initially will be all that is required, since these two entities together constituted a black hole which swallowed up cash. He said that the government being enamoured with the Contingencies Fund will come again to draw funds and he mentioned that this was something frowned upon by the Auditor General.
