‘Adjust, reverse budget measures to benefit Guyanese’ – Jagdeo to Gov’t
Opposition Leader Dr Bharrat Jagdeo is strongly of the view that Budget 2016 and the measures detailed by Finance Minister Winston Jordan, underscored the “need for a more sensible approach” to be taken towards policy-making, particularly since many of these measures do not see greater benefits being directed to the Guyanese people.
Dr Bharrat Jagdeo speaking to reporters today
“When you do these things, they have to make sense. And in that regard, I am calling on President David Granger and his Finance Minister to make changes to several of the measures announced by Minister Jordan,” Dr Jagdeo told a news conference earlier today.
The former President called on the Government to reduce the fuel and electricity prices to reflect the true tumble in oil prices on the global world market.
According to him, “a five per cent rebate in electricity charges is a joke, and why should it be effective until April 1, 2016? Why wait two months?”
Jagdeo said the announcement by itself has absolutely nothing to do with budget. “Will we wait until 2017 if the prices go back up? What we are doing is taking money from ordinary Guyanese people and putting it into the coffers of Government,” he posited.
The Opposition Leader also called on the Government to change the restriction of the importation of used and/or re-conditioned vehicles to under twelve (12) years old – instead of eight (8) years – from the date of manufacture to the date of importation. This will ensure that persons from the lower middle class and the poor, many of whom purchase vehicles on terms, as well as auto dealers, do not suffer the gravity that the announced move will have on their lives and livelihoods.
For example, in speaking to an auto dealer, it was explained that a Toyota Premio costs $2.5M on the local market, and if the new model is to be imported it will cost buyers $3.6M, which is over $1M more than the cost currently.
Dr Jagdeo also called on the coalition Government to “remove totally or change the restriction” of the importation of used and/or re-conditioned heavy duty motorized vehicles, including trucks, canters, etc., to between fifteen (15) and twenty (20) years old – instead of eight (8) years – from the date of manufacture to the date of importation. Many in the construction, mining, rice, forestry and transportation sectors will benefit from such a change, he argued.
Currently, a single axel truck costs between $5M and $6M and the new policy will see that cost increased to as much as $18M. The same applies to double axel vehicles with the cost moving from between $9M and $10M to $27M.
Dr Jagdeo also called on the David Granger-led Government to withdraw the ban on the importation of used tyres.
Instead, Dr Jagdeo suggested expanding the staff and strengthen the regulatory capacity of the Guyana National Bureau of Standards (GNBS) to ensure the quality of the used tyres. According to him, justifying the move as an effort to boost road safety is not completely factual, since most of the accidents on our roadways are caused by drunk driving and speeding.
“I spoke to one owner of a canter and the cost for a tyre is $16,000. The proposed ban will now see him paying $70,000. Imagine the prices for bigger tyres. The prices will be astronomical. A new tyre will now cost about 50 per cent of the minimum wage, which is $50,000,” Dr Jagdeo told reporters.
He said farmers and Amerindians should be exempted from the proposed increase in gun licenses fees, since their livelihoods depend on their possession of firearms.
Dr Jagdeo also called on Government to reduce the announced increases in a raft of licenses by 50 per cent, pointing out that most of the proposed increases see a jump from between 50 and 700 per cent.
The fees to be increased relate to drivers’ licenses, fitness, motorcycles, motor vehicles other than a motorcycle, hire cars, motor busses, good vehicles, articulated vehicles and other vehicles, including motor tractors and trailers and motor hearses. Also included are application fees, licence fees and renewal fees for hotels, off licence areas, liquor restaurants, spirit shops, members clubs, malt and wine and wine bars. There are several others, which will be increased once the laws are changed – over 130, according to Dr Jagdeo.
He also said that the proposed amendment to the Tax Act to ensure that prior to the issuance of all licenses for public use, the applicant must be compliant with obligations to file annual returns and paid, or has made arrangements to pay all taxes due and payable, should be reconsidered.
“Instead, Government should move in a phased manner by first going after areas where the potential of revenues being recovered are greater. In the meantime, the capacity of the Guyana Revenue Authority should be increased to allow it to be able to respond to the changes being proposed,” the Opposition Leader suggested.
“With government’s proposal, we are looking at an estimate of as much as 70,000 additional persons who will have to access GRA’s service to get certificates of tax compliance. The law currently states that GRA has the jurisdiction over the last seven years. If only 50,000 have never submitted tax returns in the past, they will have to submit now, for the last seven years. That is 350,000 additional tax return documents to be processed. Does GRA have the capacity to handle 70,000 new persons approaching them? Any right thinking person knows that GRA does not have the capacity to do this. It will create bottlenecks for business, greater corruption and I doubt it will significantly impact on increased revenue collection,” Dr Jagdeo stated.
The former President also called on Government to withdraw the announced move to introduce a broad-based environmental tax, which will place greater burdens on a great number of Guyanese.
“Government has justified to some of these draconian measures as a move to ‘green’ the local economy, in addition to raising additional taxes. We in the PPP/C have always sought to balance the green economy and the Low Carbon Development Strategy (LCDS), with the need to improve people’s lives and not bringing additional burdens on them,” Dr Jagdeo noted.
Alluding to the fact that Government is about creating the environment for citizens to do well, the Opposition Leader said the philosophy of the APNU+AFC Government seems different; “rather than focus on the productive sectors – we saw no help for rice, sugar, mining, bauxite, fishing and forestry – given that these are the sectors that create wealth, we saw a focus on filling the coffers on Government, on the backs of ordinary Guyanese”.
Jagdeo pointed out that the announced measures, related to vehicles, will be a strain on the pockets of ordinary Guyanese in many ways. For example, these moves are expected to see an increase in the cost of public transportation, among several other negatives of such an undertaking, he said.
“Guyanese will be undeniably hard hit by these measures. What Government is doing is essentially taking wealth from people and putting it into the treasury for Government spending,” the former two-term President and Moscow-trained Economist contended.
“If you follow the trail of the measures announced you will find who they favour. The measures are favourable to a few special interests. The trail leads to both individuals and companies, some with real connections to the APNU+AFC government. In this manner, the Guyanese people are not the ones who are being helped. The Government is definitely not helping the poor. This is not how you expand wealth. It is not how you make a country better,” Dr Jagdeo declared.
Other issues of concern that the former President spoke on at his press conference, include the APNU/AFC Government’s negotiation of a Wind Power project with an individual who was publicly endorsed as the “personal friend” of a sitting Government Minister; the lack of transparency and procurement reform that makes Government’s actions less transparent, such as increasing limits for awards of public monies that can be made by Ministers, and an increase of spending limits that required a three-quotation compliance, to ensure the lowest price is paid.
Dr Jagdeo also noted that the “slowdown in investments deal secured by GoInvest” was also noted, a reduction from $89B in 2015 to $11B in 2016. This, he said, shows there is no private sector confidence.
The Opposition Leader promised that all of these issues and more will be expounded on during the debates on Budget 2016, which begin next Monday.
After insults and abusing each other, after long days of thinking, I have concluded that there are three main problems with Guyana. On the social side you have racism, on the educational side you have large levels of ignorance and when i say ignorance, i don’t mean illiteracy because the large group of so-called educated people are practically ignorant. And lastly, on the economic side, you have a confusion in direction -Guyana needs to decide; it is either you are capitalist or you are socialist.
I hear the black people say PPP didn’t do anything for we..is that really true? Yes they did not give hand outs but money was flowing around the economy, anybody could grab it. Yes, i think there were some levels of racism in supporting black business,but more black people made money then than now. The coalition on the other hand believes in making money for the government by taxes mainly which is socialist in nature, an idea I am quite sure would have come from Clive Thomas. However, he might be quick to forget that if the people are not making money in the first place then they can’t pay taxes,which in turn means a decline in growth.yes the coalition is giving hand out but even they know the hand out can’t help either them or the people,it’s like given a man fish instead of teaching him how to fish,you eventually get tired.
In my far assessment the country is already salary dependent which is another socialist ideology. I was at the sea wall last week Sunday…i had not been there since the new government took over, and it was a clear reflection on the state of the economy – a lot of loud music but nobody was buying anything in fact some people came with there food and drinks,while the vendors were complaining bitterly about sales and somebody tried to defend the government by saying i need to come back during the week salaries are paid. Then i told her you are confirming my point. However, even she forgot that this was the week salaries were paid.
The people need to wake up, this has nothing to do with politics,i believe even in politics there must be a middle ground and that ground is foreign relations and economics and this two go and in hand.
The facts are clear…the economy is in a very bad state, and it is not because of global meltdown, that affects only oil producing states…it is rather because of actions and decisions of the government in there first six months,a failure in both foreign policy and economic policy. i as an analyst knows that it would take very good economic minds to get Guyana out of where it is heading in at least three years and that is with political will of the government. But from where i am seating, i dont think that would happen because the Minister of Finance once again is acting with ignorance…he has played his budget into what i call a ‘hole’. The problem with a hole is it just like sinking sand,the more you struggle to get out the more you sink.