Infrastructure, ICT among sectors for major investments in budget, Jagdeo says
-opposition parties call for introduction of tax credit, free education
The government’s 2022 national budget, which is set to be presented to the nation on Wednesday, focuses heavily on investments for the future that will enrich the lives of Guyanese, according to Vice President Bharrat Jagdeo, who signalled major projects in the public infrastructure, agriculture, ICT and oil and gas sectors aimed at propelling development.
“We have spoken about that framework of ensuring infrastructure for future growth that will be one of dominant areas in the new budget. New highways, roads, investing in power grids, ICT, the same thing that makes our business more competitive so we can generate more jobs and more diverse jobs in agriculture, in ICT in other areas not just oil and gas,” Jagdeo said during an interview broadcast on the National Communications Network (NCN) on Friday.
The Ministry of Finance on Friday announced the subject Minister Ashni Singh will present the budget on Wednesday to the National Assembly.
With the recent passage of the controversial Natural Resource Fund Act, the current administration will have access to some US$607 million for budgetary use this year.
According to Jagdeo, in the preparation of the budget government looked at a number of critical areas before arriving at what it wanted to see reflected. He explained that in some instances, while suggestions were made for measures, they had to look at the sustainability of those measures and how they can be financed.
“We are balancing the spending on ourselves now and the future jobs and benefits because you have to invest for that to happen,” he said before hinting that Guyanese can see some tax reductions in the budget but stopped short of saying where the reduction would be instituted.
While he did not specify what measures will be introduced to cushion the rising cost of living, the Vice President stated “we will have to work with communities during the course of the year to see how we can mitigate some of it.”
With this being the third budget presented by the PPP/C government since taking office 17 months ago, Jagdeo pointed out that the government will continue to look at initiatives to better the welfare of the people, including through investments in health and education.
On the agricultural and food security front, Jagdeo added that there is multifaceted plan in the pipelines for agricultural development across the country.
He went on to state that the budget will continue on the path of a business friendly environment. Measures will be introduced to ensure the environment of continuing to doing business here is improved and made easier, he said.
He noted that the government will look at “making the business process easier for people” by at the same time “implementing the local content law, which will bring big benefits to Guyanese. You see some countries now trying to muscle in on our opportunities, we are not going to allow that to happen.”
Jagdeo further stated that monies will also be allocated to build the country’s human resources capacity. He explained that provisions are in the budget for training opportunities as they aim to create jobs and employment opportunities not only in regions Three and Four, where there is a hive of activities but also in outlying regions.
“…The vision is there, the goals are there, the sectors that we want to support have that clear vision and the budget is now the financial means to achieve these goals and how we see it,” he underscored.
Moreover, the Vice President indicated that with revenue from the Natural Resources Fund pumped into the economy this year, there will be a low fiscal deficit.
“…from a financing perspective, that means we’d have to borrow less because some of the oil and gas revenue will go to replace the high level of borrowing that we have had,” he added.
Turning his attention to calls from the People’s National Congress Reform (PNCR) on Friday for budgetary measures to reflect the needs of the people, Jagdeo said the Irfaan Aliled administration from the time of taking office has been putting measures in place to cushion the effects of high cost of living.
He blasted the party, which was a part of the former coalition government,
People-centred
On Friday, the PNCR, the main constituent of the opposition APNU+AFC coalition, reiterated its proposals for a “people-centred budget’, including the introduction of a tax credit, while lamenting that the main opposition, which represents 49% of voters, has been systematically excluded from the consultations.
“In this fractured society of ours, participatory budgeting in which citizens are involved in the process of deciding how public money is spent should become an integral part of budget reform in Guyana. It is futile to think that nearly half of the population can be repeatedly ignored without it leading to dysfunctional development at best,” the party said in a statement.
Noting the likely heavy demand for labour as a result of the impact of oil and gas production, the PNCR made a case for the introduction of an earned income tax credit into the tax system to ensure that low-income workers get support from the government by filing a return even though they might have no taxes to pay. “If employers of these workers fail to file the return information of these workers, GRA will know because the workers are likely to complain since they will be unable to get the credit. Further, knowing that they would get additional money from the government if they worked, more people will seek employment,” it argued.
The party also said that while it supports direct cash grants for citizens, cash grants alone will not reduce poverty and so it sees the need for the creation of businesses. In this vein, it highlighted the need for small industrial sites in certain depressed communities to cater for labour-absorbing business ventures.
The PNCR also called for financial infrastructure and risk protection architecture to keep food production and food security as robust components of the economy in light of the threat facing food production.
A week earlier the party had called for an increase in the income tax threshold to $1.5 million or 1/3 of gross earnings, whichever is higher, from the present $780,000; change in the income tax law to ensure that the minimum wage is never taxed; restructuring of the income tax rates from the current 27% and 40% to 15% on the first $3,000,000 of chargeable income, 20% on the next $3,000,000, and 25% on the balance; and payment of an interim increase in wages and salaries to public servants of 10% pending the start and finalisation of wage talks.
It said no tax would be paid on the minimum wage. ‘If we factor in our proposal for an interim 10% increase in salary, those at the minimum wage would have an extra $9,150 per month take home pay,” it said, while adding that no income tax would be paid on income equal to or less than $125,000 per month ($1,500,000 per year). “The immediate saving to workers is $14,540 per month. With a 10% interim increase in wages and salaries, workers would take home an extra $23,570 per month in 2022. These are measures we believe will benefit the working people of Guyana and their families.”
“We expect the 2022 budget to emphasize sectors that improve the lives and livelihoods of all Guyanese. Then and only then it will be a people centered budget,” the party said, while stressing that the budget must impact the people directly, tangibly and beneficially. “We are pointing to the urgent, pressing problems that are faced by especially ordinary Guyanese: problems such as the frequent blackouts – something which the Coalition government had brought under control; no vehicle to transport the dead in at least one rural community, shortages of drugs and medicines, especially in rural communities (recently, a young Guyanese lost his life unnecessarily because of the absence of anti-venom serum),” it added.
The party said it expects several employment opportunities to be created, a transparent procurement process, and that as far as practicable labour will be sourced from the communities that are expected to benefit from investments.
“Use must be made of ‘set asides’ as provided for in the Procurement Act and Regulations, so as to ensure that vulnerable members of the population, including youths and women, are guaranteed a piece of the expanding pie,” it added.
Free education
Meanwhile, the AFC on Saturday called on the PPP government to immediately abolish fees at the University of Guyana as part of the reintroduction of free education from nursery to university using the country’s oil wealth.
In a statement, the party said the country’s oil earnings must not be squandered away behind projects that only provide kick-backs for “the boys” and advocated for priority spending on education. “In this context there must be no fees or costs for persons wishing to pursue higher education at our premier tertiary education institution,” it said.
It also called for adequate remuneration and benefits for lecturers, the establishment of university campuses at Linden and Essequibo, the establishment of a technical institute at Lethem and improved facilities to support virtual and face-to-face learning at all campuses.
The AFC noted that in recent years over 10,000 to 12,000 young Guyanese graduate secondary school but just about 3000 go on to university. When compared to the number of students graduating secondary school, it said, it is clear that not enough of the country’s young people are seeking a university education. It added that fees are one major obstacle.
Simultaneously, it further said, the University itself needs an influx of finance for both the Turkeyen and Tain Campuses. “Even as virtual learning continues, lab facilities, lecture rooms, equipment and interactive programmes for virtual learning must be enhanced,” it added.
“Sustainable development of our nation will depend on us having an educated population be it at the university or technical training levels as provided for at the technical institutes, Carnegie School of Home Economics or other such institutions,” the party said, while urging other leaders in society, including the private sector, the Bar Association, trade unions, political parties, and religious organisations to demand free education from nursery to university for the nation’s young people.