Budget 2020 priorities

When he presented the high-deficit $329.5b budget for 2020 on Wednesday, Minister of Public Works Juan Edghill highlighted two “overriding priorities” in the last quarter of the year: bringing the spread of COVID-19 under control and opening up the economy and restoring economic activity to some level of normalcy.

As it relates to COVID-19, the sharp rise in fatalities in recent weeks will lead to concerns that the spread of the Coronavirus is now extensive and that the elderly and those with underlying conditions are now at great risk. The Ministry of Health faces a major challenge. By now the doctors who have treated COVID-19 patients in the ICU must have a clear idea of the best intervention protocols for patients in extreme distress and the Ministry’s role is to ensure that adequate staff, equipment and the necessary medications are readily available. Relatives continue to cite cases where elderly patients who manifested what would have been symptoms of the virus were not taken immediately into treatment but sent back to their homes. These cases must all be isolated in treatment facilities until it is clear whether or not they are infected with the virus. There has also been at least one case where, according to relatives, a woman with a serious cardiac condition was left untreated as medical staff first wanted confirmation of the result of her COVID-19 test. The Ministry and the COVID-19 treatment facilities need to tighten the procedures for handling patients who may present with more than one affliction including COVID-19. Indeed, in the flu season there will be a challenge to determine who is suffering from the flu virus as opposed to COVID-19.

While Minister Edghill cited opening up the economy and restoring economic activity as his second priority, the people of the country who have been battered for six months as a result of COVID-19 illness, trauma of family members being afflicted, the psychological and actual effects of the various lockdowns and the loss of earnings from employment should have been the number one consideration.

The major budgetary intervention for such persons is the pledge of $25,000 per household. While this figure is welcome it could hardly compensate families who have lost significantly over six months and are likely to continue suffering until some normalcy can return to their lives. It would have been advisable for the government to focus the $4.5b in COVID relief exactly where it was needed. The government could have worked with the regional administrations, the municipalities and the neighbourhood democratic councils to determine the families that were in greatest need in their respective communities. This can and still should be done and would offer the local government sys

tem an opportunity to play the pivotal role it must if it is to be considered a serious force in the tiered government.

In his address, Minister Edghill cited squandermania by the previous administration. He mentioned the D’Urban Jubilee Park, the Sussex Street bond and the conversion of what he described as the flood prone, mould-infested Ocean View Hotel into a hospital.

The afore-mentioned cases are indeed worthy of castigation as questionable expenditures. The challenge for the new PPP/C government and certainly for the last quarter of the year is to ensure that all of its expenditure including on employment and capital items are justifiable and transparent. Jobs for the boys and girls and projects purely aimed at rewarding loyal constituencies must be avoided.

The Minister noted in his address that the sugar industry contracted for a fourth consecutive year, with sugar production falling by 11.8 percent from the previous year, to 92,256 tonnes, around 21,000 tonnes below the original forecast for the year. He said that this was primarily due to a shortfall of more than 14,000 tonnes in the second crop below the revised figure, which was attributed to “major mechanical failures” in the Albion and Uitvlugt factories.

Given the ongoing problems in the functioning sugar estates, the government has to lay out a cogent case for the reopening of the Rose Hall, East Demerara and Skeldon estates. In the backdrop of the enormous cost to the industry it incurred there will be great interest in what the government decides to do with the Skeldon factory which remains an unredeemable disaster inherited from the 2006-11 PPP/C government.

The reversal of the Value-added Tax (VAT) on electricity, water, machinery and equipment, exports, and materials for the construction sector will be seen as helpful to householders and small businesses. Given the ravages of the Coronavirus it is advisable that the government perhaps in conjunction with the Bureau of Statistics and the University of Guyana undertake a detailed examination of the financial impact and otherwise of the Coronavirus on households and businesses. Such a study will aid in the shaping of the COVID-19 relief.

Around 25,000 households in Amerindian, hinterland and riverain communities can expect an

upgrade and replacement of their solar panels, Minister Edghill said, and $400.6 million has been set aside for expanded electrification of these communities. These initiatives could well improve the quality of life in these communities and should fully involve village councils.

The Minister also announced that the government intended to provide at least 50,000 house lots to Guyanese during its term in office. It is left to be seen in which areas of the country these lots will be assigned, what basic infrastructure will be supplied, the cost per lot and most importantly the system to award these.

Addressing the oil revenue accruing to the country from the Liza-1 well, the Minister said that some areas to be targeted are: i. Support for job creation ii. World class education and health care for Guyanese iii. Social and economic infrastructure iv. Targeted cash transfer to Guyanese particularly the elderly, children, the poor and other vulnerable groups.

v. Strong local content for Guyanese with legislative safeguards vi. Savings for future generations vii. Tax reduction for Guyanese businesses and individuals

The public awaits the fleshing out of these proposals by the Ali administration.

Effective January 1st, 2021, the Government will introduce a $15,000 cash grant for school children and the uniform voucher allowance will be doubled to $4,000 per child. Also effective from January 1st, 2021, Old Age Pensions will rise from $20,500 per month to $25,000.

One hopes that the opposition will rise to the occasion and perform its watchdog role in Parliament. Considering it was in office for eight months of this year it must also be answerable for expenditure during its tenure. This budget is as much APNU+AFC’s as it is the PPP/C’s.