2018 Budget the most disastrous ever presented, says Irfaan Al

Budget 2018 has been described as the worst financial paper ever produced by any Government; one that lacks hope, creativity, innovation, and thinking power; and that does not have the ability to create and advance opportunities for the people of Guyana.
This was the firm view expressed by Opposition Member of Parliament (MP) Irfaan Ali, who was the first to lead the charge in the 2018 budget debates which commenced on Monday in the National Assembly.

Ali said the budget has failed to address employment and several other bread-and-butter issues. “The 2018 Budget is by far the most disastrous budget presented to this Honourable House since 1992. This budget is devoid of any measure to rescue the ailing economy, or improve the well-being of our people,” Ali charged.
The former Housing Minister told the House that is it therefore easy to conclude that the so-called ‘good life’ will not be realized with this budget, or during the first term of the coalition Government.
He said that given the many broken promises by the APNU/AFC Government, Guyanese are likely not to fall for it.
Zeroing in on some of the most important issues affecting Guyanese daily, Ali pointed to the fact that parents (especially single parent mothers) who were denied the G$10,000 cash grant are still being burdened with tax on educational services that approximates to G$342 million annually.
Ali told the National Assembly that the Guyanese economy has lost its vibrancy since 2015, and continues to limp along towards the elusive ‘good life’ concept. This, according to him, is evident from the suboptimal growth registered over the past three years.
“Mr Speaker, the suboptimal performance of our economy is not accidental, but may be attributed to poor policy decisions and gross mismanagement by APNU/AFC Government, (which) caused our traditional sectors to underperform,” Ali added, while the Opposition side of the House cheered on in support.
Ali zeroed in on the poor performance of the main traditional sectors, pointing out that the projected output levels from rice and bauxite for 2017 were lower than the value of outputs reported in 2014.
“Given the fact that approximately 61,000 employees and their relatives (some 244,276 persons) rely on these sectors for their livelihood, it means that a significant portion of our population (approximately 32.9%) would have suffered severe hardship,” he opined.
“Mr Speaker, the traditional sectors are not the only casualties of the gross mismanagement by the APNU/AFC Government, but businesses generally. Indeed, this Government has made the environment so toxic that the ‘ease of doing business’ ranking of Guyana slipped to 126 in 2017 from 124 in 2016.”
Inflation
Amidst the slowdown in the economy and consequent loss in income, the average consumer has had to cope with rising prices for food (4.5%), medical and personal care (3.4%), and education (4.6%), according to Ali. The price increases for these exceeded the overall inflation rate of 2.0%, and may be attributed to the taxes that were added to essential food items, education, and personal health care.
The former minister asserted that consumers are expected to pay G$40.4 billion in Value-Added Tax (VAT) for 2017, which is G$3.1 billion more than the amount they paid in 2014. He said that, instead of paying less VAT, consumers are currently paying more VAT, and are expected to pay even more in 2018.
“The VAT revenue for 2018 is projected to be G$3 billion more than the total VAT for 2017, and G$6.1 billion more than the level in 2014. The payment of these additional taxes by the average citizens serves to confirm that they are not living the so-called ‘good life’, but rather they were fed a ‘good lie’,” Ali said.
The Opposition MP has said that if Government is serious about stimulating and diversifying the economy; fulfilling its promise; and delivering the ‘good life’ instead of perpetuating the ‘good lie’, it should consider review, and in most cases remove, the huge tax measures that were imposed on Guyanese.
Ali had submitted a motion to the National Assembly in October calling for the reversal of the tax regime implemented by the Government over the years. The motion calls for the restoration of the purchasing power of the people by removing the imposition of the Value Added Tax (VAT) on zero-rated items, new fees and licenses, and an increase in taxes which were included in the 2016 and 2017 budgets.
The 3000-word-long document extensively lists a number of measures that the parliamentary opposition believes should be implemented to “stimulate the economy and reduce poverty and hardships.”
The PPP have made recommendations for improvements to the tax framework, the finance sector, the business sector, infrastructural development, energy sector, education social services, health, agricultural sector, Amerindian welfare, the sugar industry, the rice sector, and the security sector.