..Opposition Leader says early budget will not change views of electorate
Finance Minister Winston Jordan has announced plans to present an early budget, but Opposition Leader Bharrat Jagdeo has said the coalition Administration is still ignoring technical problems associated with an early presentation, and has not learned from the past.
Jagdeo said Minister Jordan may be pushing the presentation of Budget 2019 ahead of the Local Government Elections (LGE), which have been set for November 12, 2018. He said this may be so far many reasons, but mostly to do with the fact that Government may want to use that to influence the elections.
“I thought that maybe they are trying to catch the Local Government Elections; to present a budget with a few goodies to influence people on how they vote. That is still very likely, knowing how this Government operates. It makes a lot of promises and has a poor track record of fulfilling those promises,” he said.
Jagdeo, General Secretary of the People’s Progressive Party (PPP), said the larger issue is that Government continues to ignore the fact that early budgets do not make any sense.
“The issue is: when you go to the Parliament, you go to debate the framework, and the country expects a discussion on the economic performance in the current year; and based on that performance you will move forward. This is not what we are getting,” Jagdeo declared.
He argued that, in presenting an early budget, the numbers included are not final year numbers; rather, they are numbers related to growth by sector, among others things. But those figures are up to the time when the budget is presented, and the actual numbers are made public only until the following year.
Jagdeo pointed to previous budgets to make the point that after they had been presented, they had undergone several revisions of the growth rate — in some cases four times — because the final figure was much lower than the projection made.
For 2017, initially Government had projected that Guyana’s economy would have grown by a 3.8 per cent growth rate for 2017. This projection was reduced to 3.1 per cent. It was then revised downwards again to 2.9 per cent. The actual performance, 2.1 per cent, was disclosed earlier this year.
Jagdeo, himself a former Finance Minister and President, said the fiscal deficit also varied substantially when the actual numbers were presented. He said if one were to look at the components of the fiscal deficit, one would see a massive change in current and capital expenditures, as well as revenue.
“We had false figures on revenue and expenditure, therefore the fiscal deficit numbers were false. The numbers were patently false figures,” he said. As such, he said, on the external side, the balance of payments’ numbers also changed massively.
Jagdeo recalled that when the actual outcome was seen, it was worse by US$200 million. According to him, this could be a recurring problem.
Jagdeo noted that the balance of trade was also distorted. As such, he said, if the Minister — and by extension, the Government — is serious about presenting budgets that would have some impact and meaning, then it should wait until January, and they can have actual numbers to work with.
“We have a Minister who says nothing about the concerns that have been raised. What we will have is another debate on numbers that look great, but in a month, when the actual numbers are available for the year end, we will see a totally different picture,” he reasoned.
Previously, Jagdeo had said that an early budget puts the PPP parliamentarians at a major disadvantage when debating the financial expenditures of the Government in the National Assembly.
He asserted that there will be a month of “basically the Government being able to do what it wants, because it would have come to Parliament with a figure, but that figure would have had projections.”
The former Junior Finance Minister, Juan Edghill, has also maintained that Government’s early budget was a means of evading public scrutiny, and a means by which to hide their underperformance.
Edghill maintained there was no haste for an early budget presentation, noting that, historically, the country’s budget was presented in the first quarter of the fiscal year.
Government recently admitted that despite some slight improvement in the Public Sector Investment Projects (PSIPs), “tremendous” challenges continue to be faced, particularly with foreign-financed projects.
Jordan has said it is not where he wants it to be. Compiled annually, the PSIP contains capital investment projects funded under the domestic capital budget, and projects financed through external aid.
In February this year, a critical analysis of PSIPs between 2014 and mid-2017 revealed that the performances of many projects left much to be desired.
