President of the Federation of Independent Trade Unions of Guyana (FITUG) Carvil Duncan says the federation supports the 2014 national budget as, like those in the past, it continues to focus on the working class, poor and elderly.
FITUG recognises that the budget comes on the heels of substantial reforms undertaken in 2013, including increasing the tax threshold by $10,000/month to $50,000/month; a reduction of the income tax rate from 33.3% to 30%; the introduction of the mortgage interest relief; continued support to electricity customers within GPL, Linden and other communities and support to the sugar sector, according to a press release.
The group asserts that when considered in the context of the 5% increase in wages/salaries paid last year against a recorded 0.9% inflation rate for the same period, public service employees “would have benefited from a real wage increase and at the same time supported by various measures to reduce the cost of living.” It has also noted the reduction of the external debt of 41.9% of the GDP, stable exchange rate, low inflation rate, continued growth rate, robust foreign direct investment, and continued expansion of credit, all signalling a well-managed macro economy.
An injection of $6B into the sugar industry to help the company meet the financial requirements of its transformation plans, has come at a critical time. 18,000 workers and their families will benefit, the group said.
Pensioners
FITUG is also pleased that its proposals for an increase in the electricity subsidy by 50%, to pensioners from $20,000 per annum to $30,000 per annum was approved. This, coupled with the increase in old age pension to $13,125 per month, following an increase by 25% in 2013 to $12,500 and a further 5% increase per month, amounts to an increase in the disposable income of pensioners to over $300M. The annual impact of the increase in old age pension amounts to an overall pension bill of $6.6M this year.
Electricity
The budget also provides capital transfers to the Guyana Power and Light (GPL) totalling $3.7B to help the company meets its financial requirements. This allocation is expected to benefit over 170,000 of GPL’s customers and their families and avoid tariff increases. Meanwhile, allocations totalling $3.2M have also been made to meet the cost of maintaining the electricity subsidy in Linden and Kwakwani, to the benefit of the $10,500 electricity customers in Region 10. Education
Coupled with the education grant which amounts to over $2B, the $10,000 education subsidy for each child will add to the disposable income of families. This, along with the school feeding programmes and investment in the education sector, indicates that “the budget continues to focus on our youth and development of our upcoming workforce.”
The federation also welcomes the injection of US$4M into the training and establishment of a hospitality institute.
It noted too that last year, about 3500 persons were trained in computer efficiency under the One Laptop Per Family programme while another 2300 were trained under the NTYPE and BIT with plans underway to train over 3500 this year. This training will be extended to single parents.
FITUG reiterates that budget continues to augment previous budgets and offers “substantial benefits” to the nation.