More government spending is necessary to offset the slowing of the economy, Leader of the Opposition Bharrat Jagdeo says.
At a PPP press briefing at Freedom House yesterday, the Russia-trained economist relayed the party’s expectations of the 2016 budget while chastising what he said was the APNU+AFC government’s lack of disclosure which, according to him, prevented the opposition from engaging and contributing.
“It was hard to participate in a formal meeting with the Minister of Finance, it doesn’t make sense because a budget is about numbers. You have to know what the fiscal room is so we can then suggest various things,” he said.
According to the opposition leader, government needs to increase spending should private sector demand be weak or the government could lower taxes or both. He said it is flawed for the government to use global gas prices as a budget ploy noting that fluctuating prices could not be built into policies that are unable to flex.
Jagdeo accused government of so far missing the mark on a huge stimulus initiative by not taking advantage of the low fuel prices. He added that the opposition wants to see the benefits passed on to the citizenry.
“The electricity prices should have tumbled by now significantly,” Jagdeo asserted. Instead, he said, large oil companies are making “billions” while the savings are not being passed along.
Further, Jagdeo said, manufacturers and miners who would directly benefit from the reduction in fuel prices would have passed along those benefits while stimulating the private sector.
“This is a serious matter. Budget is about looking at the dynamics, the global dynamics, the national situation and trying to ensure that you see what is happening globally is in your best interest and to mitigate against negative trends at the global level to ensure continued growth,” he declared.
According to Jagdeo, since November, the PPP had requested the actual income and expenditure revenue statements and the forecast for the rest of the year but there was no response from the Minister in relation to any of the requests. He added that there were also no reports from the Bank of Guyana nor the most recent International Monetary Fund’s (IMF) Article IV consultation.
The Article IV consultation is an assessment by IMF economists through a local visit. They assess the country’s economic and financial developments and discuss the country’s economic and financial policies with government and central bank officials. The economists also oftentimes meet with parliamentarians and representatives of business, labour unions, and civil society, according to the IMF website.
Jagdeo said that the PPP has additionally requested the five-year public sector investment programme. According to Jagdeo, when in government, the PPP would have devised sector strategies for rice, sugar, information technology, mining, tourism, education, housing, crime and for the forestry sector. He charged that to date, the government initiatives as they relate to sector management and what can be expected from the budget on Friday, are unknown.
The former president said that the opposition’s expectations of the budget include that the government would support a reduction in the tax rate, the establishment of the Public Procurement Commission and the reinstatement of the water and electricity subsidy for pensioners. He said that pensioners would need an increase of 35% to re-establish the baseline of their income and to actually reap benefits.
