Budget Speech 2019, the fourth presented by the current Administration, lasted approximately four and one half hours, testing the stamina not only of the Minister of Finance but the membership of the National Assembly and his audience. The Speech clearly did not lack details, at times sounding like passages from the Gazetteer, and in which the “procurement and installation of 100 LED street lamps” earned a mention.
There is also too much evidence of simple reproduction of the 2018 Budget Speech which can inhibit originality and thinking.
By his own admission, the Minister failed to comply with paragraph (f) of section 15 of the Fiscal Management and Accountability Act in relation to projected oil revenues. We also note the pattern of failure to comply with paragraph (e) of the same section in relation to explanation for major differences between budget and actual expenditure.
Against what he stated was a continuing expanding international economy, the Minister projected domestic end-of-year real GDP growth of 3.4%, compared with an original budgeted growth rate of 3.8%. He announced growth in all the significant sectors of the economy, except sugar, projected to record a “severe contraction” of 25.2%, fishing – 1.9% and gold – 13.5%. See section Policy Issues and Targets for the projected growth rates in 2019.
Total expenditure for 2019 is $300.7 billion, making this the first Budget to cross that threshold, while total income is $248.6 billion, giving an overall deficit of $52.1 billion. The revised deficit for the preceding year 2018, was $41.3 billion.
Once again, the Minister is proposing a raft of tax measures, some of which are reversals of earlier measures including VAT credits for electricity and water and the restoration of the gold and diamond miners Withholding Tax as a final tax. Other proposed tax measures deal with Income, Corporation, Property and Capital Gain Tax, VAT, Excise and Customs. These measures are addressed in greater detail in section Budget Measures.
The Budget contains a number of provisions for people with disabilities and several measures for the employed and the self-employed but is silent on women and gender issues, single mothers, the unemployed, including the recently unemployed, the National Insurance Scheme and the Berbice Bridge which the Government took over earlier this month. These inevitably lead us to conclude, as we did last year, that this Administration does not seem to regard income and wealth inequality as serious issues and accordingly there is nothing in the Budget that could be considered a pro-poor step.
The Budget seems to have been prepared along neoliberal lines, hopeful that the benefits of the business friendly measures will trickle down to the rest of the economy. Anyone familiar with the era with which the Washington Consensus is associated will know that all this does is foster inequality and breed dissatisfaction. Yet, the Minister appeared not only confident but comfortable that the business community would welcome the measures. On the other hand, it did not seem to faze him that the market vendor, the single mom and the unemployed and others who struggle at the lower rungs of the social ladder may view the Budget very differently.
While the Minister should be congratulated for his stamina, the salient features of the budget are lost in minutiae. Of course, not everyone will have the benefit of the entire Speech but it is also true that not everyone will have the Minister’s stamina or share his passion for details.
Debate on the budget is scheduled to begin on Monday, 3rd December. This should allow for the passage of the Budget before the beginning of the new year, and the certainty which this brings to Budget Agencies and others. This is an impressive achievement that should be enshrined in law.