Budget analysis shows economy has stagnated
May 4, 2000
Although the Customs rate over the past year has jumped from $140-US$1 to $180-US$1, the import duties collection target of $4.1 billion has shown a shortfall of some $400 million.
This was pointed out by Manzoor Nadir, leader of The United Force, during his contribution to the recent budget debate.
Nadir stated that the movement of income tax collection from $5.6 billion to $6.2 billion was probably due to a third of the $2.37 billion of the Armstrong Tribunal Award being given back to the government in taxes. These were only a few examples but the government must do the analysis on the revenue heads of the budget and see that it tells a story that the economy has stagnated.
Nadir reminded that the tax issue was not addressed and recalled that IMF Caribbean Chief, Gopal Yadav had contended that the country was overtaxed; the income tax rate should be $15% instead of the high 30%.
Tax cuts would spur more consumption with more consumption meaning more taxes for the government. Giving the people more disposable income means that the government gets more in taxes, Nadir stressed.
He said that the country was in a crisis in relation to inflation, race relations and foreign affairs. But the issue of stabilising the country should remain the top priority. He declared that the Ministry of Finance should hear alarm bells as the majority of the 35 subheads in last year's budget underachieved.
He said that the Ministry of Trade, Tourism and Industry, one of the most important ministries of the government, was given scant attention with a mere $168 million allocated. Of this, Nadir pointed out, about half was budgeted for administration while after deducting a few millions for other arms of the ministry, only about $44 million remained to do any trade development work. This was where all the important activities of the ministry take place, he said.
Nadir stated that he saw the Beal Deal for the setting up of a satellite launch site as the "Beal Steal" with the only interest being "land speculation."
However, Nadir lauded government for the plans to establish a University of Guyana campus in Berbice. He also supported the $1 billion allocated for the upcoming elections, saying that it was important since it was where political stability lies.
Nadir also warned the government to be careful of the way it sells the voluntary separation package where government in moves to streamline various ministries has decided to let go of some employees. He said while the statistics indicate that ministries were overstaffed, this was mainly in the labour categories of the regions, the weeders, and cleaners. He contended that the other overstaffed area was the Ministry of Education.
He noted that last year while $200 million was allocated for contracted employees, this year about $650 million was apportioned to that area. Nadir urged the Ministry of Finance to be careful lest there should be cries of victimisation since on one hand ordinary staffers are to be severed while on the other hand more money is being made available for contracted employees.
This would only lend credence to the victimisation claim by the Guyana Public Service Union (GPSU), Nadir stated.