The 2002 annual estimates of national revenue and expenditure presented in the National Assembly by Finance Minister, Mr. Saisnarine Kowlessar does not include new taxes, fees and fines, the fourth consecutive year this has been done.

Themed "Promoting Economic Growth: Accelerating Social Gains" and conditioned by domestic and a hostile world economic environment, this year's Budget is 6.5 per cent more than last year's, a feat Minister Kowlessar said "is testimony to our (PPP/C Government) unceasing efforts to win debt relief for our country and prudent management of our resources".

The largest allocation of 17.2 per cent goes to the Education sector and is 8.5 per cent of the Gross Domestic Product (GDP), one of the highest in the Caribbean.

Smartly decked out in a dark coloured suit, complemented with white shirt and matching black and white tie, the bespectacled Finance Minister made the 52-page presentation in exactly two hours, 16 minutes 2.11 seconds, stopping occasionally to sip water.

The Opposition benches were, however, empty as members of the People's National Congress/Reform (PNC/R) staged a dramatic walkout as the Finance Minister stood to begin his presentation.

Earlier, Speaker of the National Assembly, Mr. Ralph Ramkarran announced that leave of absence for yesterday's sitting was granted to Leader of ROAR, Mr. Ravi Dev.

The Budget, Kowlessar said, clearly sets out a package of policies, programmes and measures that would stimulate investment and growth, create employment and employment opportunities and reduce poverty, resulting in an improved standard of living and a brighter future for all Guyanese.

The Government envisions a Guyana that is not falling behind but stridently pulling itself together, proud of its past achievements and confident about its future, he said.

As such, he implored Guyanese to rededicate themselves to the task at hand and work together to build this nation, conscious of one thing, regardless of their beliefs, that "we have been blessed with the gift of a beautiful country - a country with enormous potential, a blend of the world's best cultures, an enchanting climate of diversity that is healthy and rich."

"Even as the wider world suffers from natural and manmade disasters such as earthquakes, wars, and famine, we are blessed with relative peace and stability," he added.

For 2002, the economy is projected to grow by two per cent; there will be a five per cent rate of inflation; the exchange rate is expected to be stable; the international reserve will again exceed its target, and there will be more investments in the economy thus creating more jobs, he said.

There was no announcement of wage increases in the budget for public servants, but Kowlessar pointed out that though the Government had refrained from so doing, it is again inviting the Guyana Public Service Union to begin negotiations for a multi-year incomes package for public servants for the period 2002-2004.

Such a move is in keeping with international trends, and aimed at avoiding the yearly haggling and problems that characterise the present process, he said.

"It will redound to the benefit of the Government, the unions and, ultimately, the workers since it will remove the uncertainty about increased incomes over a defined period while allowing for better planning and timely implementation," the Finance Minister noted.

He said too that the Government is committed to improving the state of the industrial relations climate within the Public Service and pointed out that apart from the setback of not reaching agreement with the Public Service unions on the magnitude of increase in wages and salaries, the relationship has reached the stage where the parties are in dialogue with a view to developing a smooth and harmonious relationship.

He said the Government views the upcoming rounds of negotiations "as very crucial and hope that they will be conducted in an atmosphere of civility, in which all issues could be fully discussed and resolved, in a spirit of compromise."

"We believe that this will pave the way for lasting peace, stability and harmony within the Public Service. We implore the unions not to lose this opportunity to put the interest of the workers first, but to join us as equal partners in moving the economy forward," the minister stressed.

Touching on private sector development, he reiterated the Government's position that it will "tangibly support investment activities that enhance the value added of the sector or industry, including agro-processing, eco-tourism, garment manufacturing, jewellery and information technology".

To this end, $350M has been set aside in the budgetary allocation for economic ventures and a further $200M for the development of industrial estates in support of the private sector.

In an effort to assist the cinema industry to retool and compete effectively in the rapidly changing entertainment industry, he announced huge reductions in the Entertainment Tax for urban and rural cinemas, effective April 1.

From that date urban cinemas will pay a 10 per cent Entertainment Tax, down from 25 per cent, while that for rural cinemas will be five per cent, down from 20 per cent.

Effective from April 1, too, will be an increase in the remission of Duty and Consumption Tax, equivalent to 50 per cent of the value of the investment, for the expansion of existing, and the construction of new hotels.

According to Minister Kowlessar, the further tax concessions in support of tourism are as a result of the Government having recognised for some time now, that the potential of the tourism sector is an important new growth area, and is in an effort to enhance the contribution of the sector.

Additionally, a previous compulsory 10 per cent room tax which was applicable to resorts will no longer be in place from April 1.

Kowlessar also announced that the Government is about to embark on a study that will inquire into, and make recommendations for reform of the tax system and tax administration, taking into account the impact on growth, competitiveness, revenue, poverty reduction, and Guyana's international obligations.

He said the terms of reference for the study have already been finalised and that work is expected to start in the first half of this year.

On completion of the study, the Government will consult widely before finalising the document for implementation beginning in 2003.

The Finance Minister, who noted that every year there are calls by stakeholders for the waiver, remission or abolishment of one tax or the other, pointed out that while many of the appeals are made in good faith, these do not take into account the total impact this would have on the macroeconomic fundamentals.

"No tax regime can perform its functions if the Government is expected to respond favourably every time such a call is made.

"Equally, however, we are not unmindful of the need for periodic reviews of the tax system to ensure that it is meeting economic development and societal objectives," he added.

There is a $2 billion provision in the 2002 Budget to be spent for poverty-reduction programmes of which the Social Impact Amelioration Programme (SIMAP) has an allocation of $861M; Poor Rural Communities Project, $325M; Poverty Programme, $387M; Linden Economic Advancement Project (LEAP), $352M; and the Basic Needs Trust Fund (BNTF), $54M.

Also, there is a $259M allocation under Subvention to Neighbourhood Democratic Councils and Municipalities, to support local government bodies in the execution of their programmes.

Resources for the health sector for this year have been increased to four per cent of the GDP and eight per cent of the Budget, to allow for the ministry to embark on a study of health systems, including an inventory of facilities, validation of health statistics and an analysis of vertical programmes.

Considerable improvement in the delivery of medical supplies and drugs and providing better control of inventories is also projected.

In addition, there are plans to approve the National Strategic Plan for HIV/AIDS, within which is a comprehensive HIV/AIDS package valued at $528M.

Critical works for which $350M has been set aside, will be carried out at the Georgetown Public Hospital Corporation (GPHC) and hospitals and health posts countrywide, the minister reported.

Under housing, the Government has plans to, among other things, improve property rights over land, increase land ownership by the poor, facilitate the settlement of squatters and provide titles to enable persons to access credit from financial institutions.

The launching of a revolving fund for low income house construction of about 100 houses in the initial stages, is also on the cards.

Kowlessar announced that the Government will begin a massive restructuring and modernisation of the Guyana Sugar Corporation (GUYSUCO) starting June this year, in order to increase the competitiveness of the industry.

In the Agriculture sector, support will be given to a number of priority areas, among them fisheries, other crops, cut flowers and agro-processing.

Some $231M has been set aside for the purchase of crime fighting vehicles and other equipment and resources have been allocated for the on-going recapitalisation of the Army, the Fire and Prison Services to enhance their capacity, the Finance Minister announced.

Deliberations on the budget will commence on March 25, Minister of Parliamentary Affairs, Mr. Reepu Daman Persaud said.