Budget debate kicks off with lively exchanges from both sides … APNU publicly admits it has no interest in saving sugar industry
- ‘Sugar workers are YOUR problem’ – Greenidge tells Gov’t
- ‘Gov’t most happy, willing & prepared to help sugar workers’ – Minister Ali responded
- GOV’T STANDS FIRM IN DEFENCE - counters with records, facts and achievements
Written by Chamanlall Naipaul, Tuesday, 02 April 2013 23:42, Source
Finance Minister, Dr. Ashni Singh speaking to Agriculture Minister, Dr. Leslie Ramsammy in the National Assembly yesterday
THE affairs of sugar workers are of no concern to A Partnership for National Unity (APNU), according to its chief Finance Spokesperson, Mr. Carl Greenidge, who, during his presentation to open the 2013 Budget debates yesterday, compared the capital transfer of money to the sugar corporation to that of a “black hole.”
Dismissing the sugar workers and admitting publicly that APNU has no interest in saving the sugar industry, Greenidge said the ‘problem of sugar workers’ is not a responsibility of the Opposition but one for the government to deal with.
Greenidge charged that the $1 billion and $11 billion financial support to the Guyana Sugar Corporation (GUYSUCO) and the Guyana Power and Light (GPL), respectively, represent a “black hole”, and would not bring any returns to the economy.
“Combined, GuySuCo and GPL is a ‘black hole’ in which resources of tax payers are being dumped,” Greenidge declared in the National Assembly.
Government Minister Irfaan Ali, in his response to Greenidge’s presentation, thundered that the government is most happy, willing and prepared to help sugar workers. He also assured members of the House that Government is committed to ensuring that the sugar industry returns to viability as over 120,000 people or 24,000 households depend, directly and indirectly, on it for their livelihood.
Minister Irfaan Ali quoting from Greenidge’s 1990 budget document
In addition, Ali disclosed that the sugar industry brings in vital foreign exchange, bringing in some US$300M last year. This, he said, helps to maintain the foreign exchange supply on the local market and keep exchange rates stable.
On the issue of financial support to GPL, Ali stressed that this is necessary to prevent higher tariff rates to consumers, noting that in its absence, GPL would be forced to increase its rate by 28%. He then rhetorically asked Greenidge if he wants the government to pass on this increase to the consumers.
Minister Ali indicated that because of the widely-recognised and lauded good performance of the economy, the government is in a position to provide subsidies to the Guyanese people and in the process offer protection to the poor and vulnerable.
He noted too that because of the subsidies provided by the government, the inflation rate has been kept at 3.5%.
Quoting from Greenidge’s 1990 budget presentation, Ali reminded him that he had stated that the price of rice had increased by over 200%.
Greenidge, in his p
Opposition spokesman on Finance, Mr. Carl Greenidge yesterday
resentation to kick-start the budget debate, claimed that the budget has not focused on poverty reduction and measures on reducing unemployment which he argued are major concerns in our society. He also claimed that the government has distanced itself from the “reality in the streets.”
However, his arguments were debunked by Ali – the Minister of Housing and Water and acting Minister of Tourism, Industry and Commerce - who cited a plethora of facts and figures to show what the government has been doing and what is contained in the budget to deal with the poor and vulnerable in our society.
Ali, describing the budget as a reflection of the government’s commitment towards achieving the ‘Guyanese dream’, noted that since 2006, national budgets have been planked on a medium term strategy to deal with poverty reduction, pointing out that apart from the 25% increase in Old Age Pensions from $10,000 to $12,500 per month, subsidies on water and electricity bills will actually translate into $18,745 per month for each pensioner.
The minister also pointed out that some $52.2 billion have been allocated to the education and health sectors under which a school feeding programme which will benefit over 64,000 children, provide hinterland scholarships for 388 students, as well as several training programmes, including ICT, which will target youths. This, he added, will also help to build human resource capacity.
PERFORMANCE OF THE ECONOMY
In response to the claim by Greenidge that the government has failed to provide the infrastructure and enabling environment to attract Foreign Direct Investment (FDI) and propel the economy, Ali pointed out that the economy over the last seven years had an average growth rate of 4.5% which has outstripped growth rates among its sister CARICOM states and even several Latin American countries.
He quoted extensively from reports on Guyana from ECLAC, IMF and the World Bank to support his contention of continuous economic growth and the sound macroeconomic management of the economy.
Minister Ali further stated that, according to the World Bank, the economy is slated to grow by 5.6% for this year.
With respect to Foreign Direct Investment, he dispelled Greenidge’s argument by disclosing that FDIs increased from US$104.2M in 2006 to US$1.3 billion in 2012.
Ali said that because of the stable investment climate created by the government, domestic investments dramatically increased as in 2006, loans by the banking sector amounted to $30.6 billion, while in 2012 it jumped to $82.6 billion.
He revealed that Guyana’s banking sector in terms of its capacity to provide loans, is ranked 30th out of a listing comprising 142 countries.
Ali also disclosed that the GDP per capita increased from US$1,694 in 2006 to US$3,148 in 2012.
He asserted that because of the expanded economic base, the competitiveness of the national economy has significantly increased.
Guyana has now been removed from the group of Highly Indebted Poor Countries and reclassified as a Lower Middle Income developing country, Ali said.
VAT ATTACK
Greenidge lamented that the current 16% VAT was hurting the poor and that the government has failed to address this.
He also waded into the Private Sector for supporting VAT at its current 16%, a position most recently articulated by President of the Private Sector Commission, Mr. Clinton Urling.
However, Ali retorted that VAT replaced a 30% consumption tax.
Ali also alluded to the rebate on mortgage interest for first time home owners which he said will accrue to about two months of loan repayments per annum thus reducing the loan repayment period for mostly young people.
On March 25, Finance Minister, Dr. Ashni Singh presented to the National Assembly a record $208.8 billion national budget, announcing a wide range of relief measures including tax breaks on properties, electricity subsidies for pensioners, mortgage interest relief, continued electricity subsidies for residents in Linden and a reduction of the P.A.Y.E rate.
DEFENDING THE BUDGET
“As I rise to initiate the debate on the 2013 budget, I would like to firstly congratulate my colleague, Dr. Ashni Singh, for his excellent presentation of the budget 2013 which captures the vision of the PPP/C’s leadership,” Ali said.
“Mr. Speaker, as I stand here today in this august house, I feel a sense of optimism despite the many challenges which confronts us as a nation. I am optimistic because over the last two decades the PPP/C government has transformed the economic landscape of this dear land of Guyana and in the process:
* created a stable business environment that encourages both domestic and foreign investment;
* improved the quality of the country’s social and physical infrastructure;
* improved access to shelter through the provision of housing to low income households;
* expanded the economic base of the country’s so that it is more resilient to external shocks;
* improved the competitiveness of the domestic economy
* improved the country’s human capital;
* strengthened the national institutions responsible for safety, security and justice;
* reduced poverty and inequality;
* maintained fiscal prudence;
* and most importantly restored hope in Guyanese”
Ali also stated that any analysis of the socio-economic performance of this country over the last decade will reveal the impressive management of the Guyana’s economy under the PPP/C leadership. “It is abundantly clear for all to see, the economy is attracting investment, the private sector initiatives are bearing fruits of expansion, new sectors are developing, jobs are being created, and governance is improving,” he stated.
