Budget a major disappointment - GPSU By Gitanjali Singh Stabroek News March 29, 2000 Elements of labour and the financial sector yesterday dubbed this year's $62.2 billion budget a "major disappointment", and one which made a mockery of the annual pre-budget consultation process. They said its only significant feature was the 26.6% pay hike for teachers and the disciplined services and dubbed it an electioneering budget not sustainable by the country's revenue base. The budget placed heavy emphasis on infrastructure projects. For the Guyana Public Service Union, the budget focuses on "silly" economic indicators such as the primary balance and inflation--targets which in the past have not been met--rather than issues such as job creation, poverty and the welfare of citizens. But for leading city businessman, Yesu Persaud, given the international situation which Guyana faces in commodity prices, as well as the huge increase in oil prices, the budget though unexpected, was "reasonably fair." "While I would have liked to see a number of stimulus in the budget to stimulate exports, we need to ask ourselves can it be done?" Persaud said. Chartered accountants Ram and McRae in their budget analysis in today's edition found the 2000 budget to be lacking in vision and creativity with a marked reluctance by the government to respond to the pleas of the private sector. The private sector on the other hand, the accountants said, has hardly distinguished itself by courage, innovation and commitment to the general good of the country. Ram and McRae said Minister with responsibility for Finance, Saisnarine Kowlessar, deserved the understanding of fellow Guyanese for attempting to prepare his budget in the most difficult administrative arrangements possible and urged that he be given more authority and technical resources to manage the Ministry of Finance and the budget effectively. "Unless this is done the economy will continue to move at a pedestrian pace when what is needed is rapid acceleration," the accountants asserted. They revealed that the Guyana Manufacturers' Association held the view that the budget consultation was an "exercise in futility" and was seriously considering the advisability of future submissions for the purpose of consideration within the national budget estimates. Ram and Mc Rae said these concerns were lodged with the Private Sector Commission which was unlikely to have done anything about the complaints and spoke of many private sector leaders 'cosying up' to the government for favours rather than lobbying selflessly for the sector they represent and the economy as a whole. The accountants said the trade union movement has also been silent, more concerned about protecting turf than defending the living standards of workers. Meanwhile, at a press briefing yesterday, the GPSU expressed disappointment in the budget which it said had failed to accommodate a single recommendation made by the labour movement over the last several years. "The labour union must ponder in future the usefulness of submitting proposals to the ministry and particularly in the annual charade called consultations in view of this experience," Chandra Persaud, GPSU executive member stated yesterday. She said that the budget seemed to be incurring a massive deficit in an electioneering exercise to provide water, house lots, clinics or schools for every village or township from Georgetown to the Rupununi and Crabwood Creek to the Pomeroon River, all of which had to be financed by international lending. She noted that simultaneously, the country continued to seek debt relief. Persaud said that the government's continuing policy of mendicancy and greater dependency would fail and she expressed her union's concern that the budget failed to address job creation or economic growth in a meaningful way. The GPSU executive member said that the government ought not to take credit for the 26.6% hike for all public servants as it had nothing to do with the government's generosity, but rather the strong advocacy before the Armstrong tribunal award. She said that the government continued to refuse to honour the award as it related to allowances and the payment of 31% in 1999 to public servants in the fire and prison services. But she said the union was happy to note that teachers and members of the disciplined services would benefit from the 26.6% award won by the public service struggle. Persaud also noted that though there was much talk about public service reform, the budget was silent on the modernisation of the sector and the government was probably awaiting the coming of Inter-American Development Bank consultants this year, who would tell it what to do. She argued that the budget was a document prepared by technicians of the Ministry of Finance and was really a report to the World Bank and the IMF saying how well the conditionalities had been complied with. She lamented that the urgent need for tax reform, revamping of the National Insurance Scheme (NIS), the regional distribution of revenues and efforts to deal with marginalisation, boosting investment and tackling poverty in a real way, and preparing the student population and the work force to meet the challenges of computer literacy were not addressed. The labour movement over the years had asked for: an increase in the income tax threshold to $25,000 per month; allowances for families; allowances for mortgage interest deductibility; allowances for spending on education; the corporation tax rate to be reduced; the abolition of property tax; NIS reform to ensure that workers' money was spent on mortgage financing and not financing retail business operations; a national minimum wage; a policy for pensions, SIMAP to be overhauled, hire-purchase legislation and health insurance and policies for staff enhancement, as well as establishing recreational facilities for a healthier population. The union restated its position that the government was wasting money annually in sterilising liquidity; the target sum this year being $4.4 billion compared with $2.7 billion last year. The union said this policy was based on a fallacy and argued that monetary management should be entirely left to the Bank of Guyana and not the budget. The central bank, it said, should seek the highest possible returns on Guyana's reserves and use that to help mop up liquidity.