Budget for the times

Acknowledging the unique political ‘dispensation’ into which the country had been delivered – which he had memorably earlier described as ‘unchartered waters’ – Finance Minister Dr Ashni Singh presented the 2012 budget.

Earlier, of course, there had been some skirmishing by the opposition to become part and parcel of the Budget team, but that had been firmly rebuffed by the government. This budget is therefore the government’s considered plans for dealing with the economic needs of the country in 2012.

The declared theme of “Remaining on Course, United in Purpose, Prosperity for All”, summarises the government’s formulation of its budgetary aims: how it will spend its revenues in 2012. The “Remaining on course” subset reminds the nation that over the past half decade and more, the economy has been guided firmly on an upward trajectory. This is not fortuitous since our partners in Caricom have been headed in the opposite direction, even though they did not have to rebuild their economies from rubbles such as was bequeathed by the previous PNC administration.

The Minister predicted that if all goes as planned, the economy should grow by 4.1 per cent – in line with the 4.4 per cent average growth rate achieved over the past five years.

The greatest unknown for our economy has been political instability. It is hoped that the opposition will see it fit not to encourage reckless behaviour in the populace that would reverse our hard earned gains. In the sugar industry, for instance, while the Minister announced an increase in production last year from the previous year, he candidly acknowledged these figures showed that the industry still was far from its optimum production.

One of the major constraints has been a consistent labour shortfall in the fields and the opposition has been very opportunistic in encouraging a confrontational approach by workers rather than following the industrial practices set out in their labour agreements. The opposition might be pushing for a crisis in the sugar industry for two reasons: to callously make headway into a vote-bloc that has been traditionally PPP and secondly to force a privatisation of the industry – which APNU has announced publicly is its goal.

The same caution against intemperate behaviour holds for bauxite which has increased production rapidly but has not had a proportionate increase in revenues because of falling prices in that industry.

This is a reflection of a soft aluminium market because of the turmoil in Europe and the U.S. Industrial provocateurs, such as those fostered by the opposition and its allies in the labour movement, should be aware that the multinationals can easily swing their production to alternate sites in other countries.

We can end up losing ‘corn and husk”. While the opposition continue with their insistence on ‘opposing for opposing’ sake, they had to strain at the bit to suggest that the budget, in its redistributional function, did not address the problems of the poor. While, of course, governments can always do better in this area – even in the most developed economies – the point is to continue with and not reverse, previous gains. And this is what the government has achieved.

With the income tax threshold increased by Gy$ 10,000 monthly, individuals earning up to Gy$ 50,000 would pay no taxes and have this Gy$ 10,000 available for their own consumption. While modest, pension is slowly inching upwards.

The Gy$6 billion subsidy to GPL must be seen as a subsidy to the populace, since in its absence, they would have been paying a higher rate for their electricity. Similarly, the solid and disciplined macro-economic fundamentals that the government has maintained will insure that the low inflation rate – predicted at 4.6 per cent this year – will be maintained.

Older Guyanese would remember that persistent inflation during past administrations made their wages seem like ‘monopoly’ money.

Finally, in each of the social sectors, especially education and health, which benefit mainly the poor, spending has increased. Let’s not stifle our consciences.