Letter: Long before oil, PPP/C social transfers built household wealth

Dear Editor,

Long before the discovery of oil, successive PPP/C Governments had already established a strong record of providing both cash and in-kind transfers to support Guyanese families.

Since 2021, both the number and value of these transfers have increased, reflecting a continuation and expansion of long-standing social policies rather than a new phenomenon driven solely by oil revenues. Guyanese are well familiar with initiatives such as the “Because We Care” cash grant, the “One Laptop per Family” programme, the “National School Feeding Programme”, and the provision of free textbooks, many of which predate the discovery of oil.

Similarly, the national housing programme, which has transformed the lives of tens of thousands of citizens, began in the 1990s at a time when the country was heavily indebted and emerging from decades of economic and social decay.

Of all these interventions, I believe the housing programme is among the most effective in preventing intergenerational transmission of poverty. Under this programme, beneficiaries receive multiple layers of support. To begin with, there is a substantial land subsidy: low-income beneficiaries pay only 25 per cent of the market value of house lots, effectively receiving a transfer equivalent to 75 per cent of the land price.

This is complemented by infrastructure subsidies that increase the value of these lots as roads, drains, water, electricity, and other utilities are installed within housing schemes.
Over the years, low-income households have also benefited from reduced interest rates on low-income mortgages. The savings generated by these interest rate adjustments, made possible by the Government forgoing taxes on income from such loans, amount to a significant share of the interest that would otherwise be due and payable.

The Government went further by introducing Mortgage Interest Relief, allowing homeowners to benefit from tax breaks. Over the life of a loan, these savings are equivalent to countless mortgage instalments, further easing the financial burden on working families.

When these transfers are monetised, they amount to millions of dollars received and enjoyed by beneficiaries of Government house lots. More importantly, the receipt of a Government house lot often leads to ownership of one of the most valuable assets a household can possess: a home.

That home, in turn, is linked to the accumulation of other assets, including household furnishings and vehicles, thereby enhancing overall household wealth and stability. Based on my calculations, the housing programme has been responsible for a significant number of individuals moving from low-income to middle-income households.

All members of these households benefit from this upward mobility, not only through access to adequate housing but also through the long-term security the home provides, including the potential to be inherited by future generations.

These transfers, such as free tertiary education, scholarships for post-secondary training, Government payments for CXC subjects, and other education-related programmes, deliver benefits that extend far beyond a single year. They provide a lifetime of opportunity, creating households that can stand on their own and thrive without dependence on handouts.

I therefore welcome this budget and look forward to future budgets that will continue to deliver such transformative interventions, further reducing intergenerational poverty and helping to build a more progressive and resilient society well beyond 2030.

Yours sincerely,
(name withheld)