For the sixth consecutive year the national budget has failed to increase the non-taxable income threshold from $18,000 monthly despite repeated calls from the private sector and the unions. This year, the request was for the threshold to be taken to $35,000 monthly with widespread expectation for some relief after the five-year freeze.

The $68.9 billion budget presented by Finance Minister, Saisnarine Kowlessar, yesterday was also silent on a stimulus package for the economy; on any meaningful tax relief for overburdened taxpayers; and on measures to retain critical Guyanese skills being sought by other states, including teachers.

The budget measures (see page one) speak generally of support for investment activities that would enhance value-added and of tax reform with the only specifics covering a $2 billion poverty programme; the allocation of $350 million for unspecified economic ventures; $200 million to develop industrial estates and the slashing of the entertainment tax to ten per cent from April 1 to aid the cinema industry, while increasing remissions of duty and from consumption taxes for the tourism sector to 50 per cent of the value of the investment. The budget continues the tradition since 1999 of no new taxes.

On job creation, Kowlessar said US$103 million to be invested in 67 projects in new growth areas would create 3,449 new jobs, while the government will implement a Temporary Employment and Maintenance Programme to hire between 300-400 unskilled persons. These persons would be required to remove derelict vehicles, clean drains and weed grass verges on the highways and main roads throughout the year. This, Kowlessar said, will help to beautify the environment and support the tourism drive. The government has also designed short-term programmes to provide cash and other support to displaced workers while they seek other opportunities in the labour market, Kowlessar said.

Kowlessar said new growth areas would be pursued in the traditional and non-traditional sectors this year with the government's medium-term agenda consisting of policies that would benefit manufacturing, agriculture, tourism and technology.

Garment manufacturing parks would be developed in strategic locations to stimulate production and export, Kowlessar told the National Assembly devoid of PNC parliamentarians. Last year, US$15.9 million was invested in nine projects in light manufacturing, textiles and garments and Kowlessar said a further US$7.7 million was expected to be invested in these activities this year.

The priorities in the agriculture included fisheries, other crops, cut flowers and agro-processing. The minister said mechanisms were being put in place to boost the export of fish and fish products to the European Union. A five-year plan has been developed for organic agriculture with special emphasis on cocoa, peanuts and cashew nuts.

Kowlessar said the expertise of the Food and Agriculture Organisation (FAO) would be used to introduce sustainable cut flower, honey and integrated fish and crop farming industries this year. He said advantage would be taken of Guyana being certified free of foot and mouth disease to revive the cattle industry. In 2001, US$34.3 million were invested in 12 new projects in fish processing, poultry farming and processing and wood products and it is anticipated that another US$8.5 million would be invested in aqua farming, cattle farming and fish processing this year.

For tourism, the minister expects Guyana to draw heavily on its natural resources to develop specialised markets in areas of eco-tourism, adventure tourism and cultural and heritage tourism. He said initiatives this year would include the establishment of the long-talked-of Tourism Authority; the development of a tourism website critical to marketing and promotion strategies; and revamping the incentive regime for tourism. Sub-sector strategies for accommodation and air access are also to be developed. Kowlessar said funding would be sought for the development of a Hospitality School to equip service providers in the industry with the requisite skills. Last year US$4.2 million were invested in the tourism sector and US$1.8 million in investments are planned for this year.

The minister said the government intended to aggressively target the technology sector. He said three projects worth US$5.4 million have been attracted and this year, another US$8.2 million will be invested in Demerara and Berbice in two telecentres and a medical prescription service.

Kowlessar said the government's policy to stimulate economic growth and generate jobs concentrates on programmes that generate quick supply and labour responses and support increased private sector investments.

But to the specifics of these, he said, the government will maintain a stable macro-economic framework; adopt sector policies to stimulate production; restructure and modernise the traditional sectors; target new growth areas and provide systemic support to the private sector.

Macroeconomic policies will continue to target stability of the exchange rate and contain inflation. A comprehensive review of the tax system, on the cards for years, is one of the fiscal policy measures to be pursued. The budget also promises tighter expenditure controls.

On policies to support private sector development, the budget boasts that Guyana has one of the freest economies and one of the most attractive incentive structures in the Caribbean and Latin America. It also recognises that the private sector needs more support to increase its competitiveness and play a meaningful role in economic development.

"In this context, the government will assist the sector in export and investment promotion and the development and expansion of small business and cottage industries," Kowlessar told the National Assembly.

But in the area of export and investment promotion, Kowlessar referred to the much-criticised investment code tabled in parliament. He also referred to Go-Invest being reorganised and having been identified as the one-stop agency. Kowlessar also referred to the stock market, which should be operational this year and said a commissioner of insurance should also be appointed.

The minister said work would be done with the private sector to improve the quality of their products in line with international standards, to put in place a dispute resolution and settlement mechanism. It would also be given support to participate in overseas trade fairs.

Kowlessar also cited the export potential of small businesses and cottage industries and said the government would create a conducive environment for the regularisation, growth and development of small businesses and cottage industries. This refers to the small business legislation, promised for some time now.

The restructuring of traditional sectors is also on the cards. Kowlessar spoke of the US$110 million modernisation project for the Guyana Sugar Corporation, set to start in June and a ten-year strategic plan for the rice industry's recovery. This plan focuses on research to increase production via higher yields; higher quality of rice for export; expanding market share and support services for the industry.

Kowlessar touched on Omai Gold Mines Ltd's interest in Linmine and said regardless of the outcome, the government was committed to the comprehensive restructuring of the sector with a view to channelling current subsidies into job-creating and poverty reducing activities in the affected communities.

The minister said that the government continued to support Omai's search for new gold bearing deposits and added that two energy-related projects costing US$10.4 million will start this year.