-Advances slew of fiscal measures for Budget 2018
The Opposition People’s Progressive Party/Civic (PPP/C) is gearing to table a slew of Budget measures it wants to see for 2018 – the proposals coming days before Finance Minister Winston Jordan is set to present the coalition’s third annual Budget.
The measures have been documented in a Parliamentary Motion piloted by Chairperson of the Public Accounts Committee (PAC) and PPP/C Member of Parliament, Irfaan Ali, along with party Chief Whip, Gail Teixeira.
Parliament formally emerged from its recess this week, but there would not be any sittings until after October 21.
This obtains since several Members of Parliament, including the Speaker of the National Assembly, are on an engagement in Russia.
The PPP/C parliamentarians – in presenting the menu of measures – insisted Government’s tax-oriented approach to growth and policies is among the key factors responsible for the deteriorating economy and pointed to the introduction of increases for every category of taxes on income, property, production and consumption, and international trade, including environmental taxes.
The Finance Minister on Monday announced that there would be no new taxes in Budget 2018, but the Opposition members contended that the 200 new taxes alone that were imposed in the last budget were currently costing Guyanese $10 billion in disposable income.
According to a draft copy of the motion seen by this publication, there has been a marked effect on the business community, “there is a marked reduction in the overall demand for goods and services”.
The motion attributed this marked reduction to the reduced disposable income, “dwindling sugar and forestry sectors that employ in excess of 40,000 persons directly, the downsizing of many businesses and reduction in investment in agriculture”.
According to the motion, the PPP/C, in calling for an affirmation of the adopting of its menu of measures, will point to the fact that Government in addition to dismantling the local productive sectors has also been depleting the foreign reserves/savings of the country while escalating its debt.
“The Government expended US$18.3 million from the Bank of Guyana’s net foreign assets, thereby reducing the net foreign reserves from US$633 million in June 2016 to US$574 million in mid-2017, the lowest-ever recorded in over seven years,” the PPP/C motion outlines.
In addition to Government dipping heavily into the foreign reserves, the PPP/C contends that external debt increased by US$53 million to US$1 billion.
In arguing for the inclusion of its own list of measures, the PPP/C in its motion argues that Government continues to “crowd-out”, outstrip and deprive the Private Sector of much-needed credit for investment.
According to the motion to be presented to Parliament for a date for debate, “there is no shadow of doubt that the economy is in a dire state; indicators are showing strong signs of distress and imminent economic failure with a severe shortage of foreign exchange, the decline of key foreign revenue streams such as sugar, bauxite, forestry and even rice to an extent, while concurrently the Bank of Guyana foreign reserve continues to be depleted and servicing our external debt will become more burdensome.”
The political Opposition insists the Finance Minister needs to admit that his framework of fiscal policies and tax-oriented solutions have contributed to this state of affairs and have successfully dis-incentivised the economy, and, therefore, urgent and immediate measures need to be taken to reverse this economic decline”.
The PPP/C, in laying down the gauntlet, further contended if Government was serious about national development and the ‘good life’ for all Guyanese, it needed to urgently change its policies and support the Opposition proposals “urgently introduced to stimulate the economy”.
Finance Minister Jordan on Monday met members of the local press corps to provide an update on his imminent 2018 Budget, but did not commit to a reduction of any of the existing taxes.
On the matter of consultations with the political Opposition ahead of the budget preparation, the Minister downplayed the hiatus, along with the PPP/C’s request for pertinent documentation.
Budget 2018 will be presented to the National Assembly on November 27.