- Opposition Leader says 2017 Budget will not benefit the working class, will ‘kill the Private Sector’
In light of an eventful presentation of the 2017 Budget in Parliament earlier today, Opposition Leader, Dr Bharrat Jagdeo has deemed the entire presentation as “immensely un-resourceful”, highlighting that it may more than likely “kill the Private Sector.”
“I was sitting there; one thought came to my head. That it was immensely un-resourceful, but as we got to the latter part of the Budget, particularly when he (Finance Minister Winston Jordan) announced the measures, I changed that assessment to immensely ominous for the future of Guyana, for the future of job creation and growth, and business development and for the future of welfare and growth in benefits to ordinary people,” the former President reacted.
Dr Jagdeo asserted that throughout the presentation of the 2017 Budget, Minister of Finance, Winston Jordan was extremely repetitive in relation to old information, but failed to elaborate on project ideas, indicating that little effort was placed on thinking the initiatives through.
“…a lot of rehash of old information and then some project ideas that one would recognize that are clearly not being thought out fully. For example, the proposal to start the road from Georgetown to Lethem, going to phase one when no feasibility study has been done.”
He further noted that even the pre-feasibility studies point out that given the traffic flow between Brazil and Guyana, it will prove to be unsustainable to spend US$400M on a road of that nature.
Gov’t competing with Private Sector
The Opposition Leader also contended that the framework of the Budget does not display any support in relation to growth towards Guyana and its people.
“The Minister talks about creating more opportunities for the Private Sector but now the Government, having announced this huge budget, will be going into the local capital markets to raise funds to finance the budget,” the Opposition Leader noted, while highlighting that this would create competition with the Private Sector for funds, since they would both be seeking from the same markets.
He further explained that this competition will influence the country’s growth negatively since interest rates will increase. He stated that this will not only have a major impact on Guyana but it will wreak havoc across the country since many people will become discouraged from investing in light of the state “sucking out all the liquidity or most of the liquidity from the systems.”
Decrease in VAT increase in Utilities
In relation to the tax measures that were introduced in the Budget 2017, Jagdeo asserted that this change is a fundamental one as it will not only add to the lack of growth but will also “destroy any possibility of recovery.”
He noted that the less fortunate residing in Guyana will find it harder because even though the Value Added Tax (VAT) was reduced from 16% to 14%, this tax will now be extended to Light and Water bills, while the list of exempted items were also removed.
“A rich guy importing something fancy now gets his VAT reduced from 16% to 14% but poor people and mothers, single parents who have to find milk for their babies now have to pay Vat on that…and when your electricity bills go above $10,000 you now have to pay VAT on the full amount,” he explained.
Jagdeo expressed his opinion that this will wreak havoc throughout Guyana as it holds no benefit for the citizens of the country.
“In all of my life time, this is probably the worst Budget I have ever seen, the Budget that brought in the most taxes in the history of our country!” – JAGDEO