Even with VAT, the PPP still did not have enough to feed its squander-mania machinery

http://www.kaieteurnewsonline....der-mania-machinery/ 

Dear Editor,

As a Government, the PPP has grown accustomed to living beyond their means. The tax revenues have never been enough over the last 20 years to fulfill the PPP’s spending promises. Initially, this was as a result of the mess rolled over from the Carl Greenidge’s Government; but what about now?

Even after the implementation of VAT, where the PPP like a phantom collected some $15 billion more in new taxes in 2007, they still did not have enough money to feed the squander-mania machinery.  Notwithstanding that they took the money from the people like “Ali Baba” after misleading them into believing that the VAT was cash neutral. The end result; the PPP quite alacritously continued to run a large budget deficit.

To put this squander-mania into perspective, one must look at the year 2001.  In 2001, the GRA (or its predecessor) collected some $41 billion and spent some 39 percent ($16 billion) of that collection on capital works (new school, road, sea walls, etc.).

In 2011, the GRA collected some $111 billion and the PPP spent a sizeable $50 billion of that on capital works.  In 10 years, the business buddies of the PPP were able to set their sight on an extra $34 billion of the taxpayer’s money.  The Fip Motilall contract and all those “slap-dash” works that are disintegrating before our very own eyes today were paid for at multiples of their real value. Prophetically, the latest expose of this wastage was at Enmore, where the AFC revealed that not even the descendants of the Enmore Martyrs, who were the genesis in the formation of the PPP, were exempt from being conned by the business buddies of the PPP.

Don Luciano Reggallo said “Never bite the hand that feeds you, because it will be the same hand that chokes you to death!!!!”  Can you imagine the AFC winning 40 percent or more of the votes in Enmore?

The only way one can read the message of the Minister of Finance is that he shall continue the Bharat Jagdeo way. Since I can find no money for a living wage in this budget; there is no money for a decent pension for the elderly in this budget; there is no money for job creation initiatives in this budget. However, true to form and in full compliance with the PPP playbook; some $75 billion is being proposed to the majority opposition for more capital works so that they can feed their business buddies. That is five times the amount spent in the name of the taxpayers 10 years ago and we are now further away from the fiscal responsibility that Dr Jagan demonstrated in 1994.

To supplement this irrational PPP strategy, it is a proven fact that Guyana does not have the supervisory capacity to spend that kind of money.  So what do you expect?  More “six for nine.” But the taxpayers must understand to continue this immoral administration of the State’s finances, the PPP plans to continue borrowing every single cent they cannot squeeze in taxes. The fact is; as taxpayers the Guyanese people guarantee on these loans.

The plan of the PPP in 2012 is to borrow some $26 billion in the name of the taxpayers. Every year, this budget deficit is added to our national debt which is already a millstone around the neck of our children and grandchildren. Better management of the financial affairs of the people is possible and was done in 1994.  In that year Dr. Jagan and his Finance Minister Dr Asgar Ally brought the budget deficit to a low of 1.1 percent of the GDP and there was a real plan at fiscal consolidation then.  So why can’t the PPP behave fiscally responsible?

It has been a financially painful and turbulent decade for the workers of Guyana under Jagdeo and still the public finances have not been brought under control.
There was much hope that under President Ramotar the people would have seen the beginning of the end of squander-mania and financial wastage in the Government.  But the 2012 budget clearly reveals this is clearly not the case.
It is business as usual.  The only difference is the country’s credit card is no longer publicly in Bharat Jagdeo’s hands. What any skillful reader of this budget would recognize is that President Ramotar is also in a mood to “max-out” our credit card.

This graph shows how the Guyana’s budget deficit under the PPP has fluctuated as a percentage of the country’s economic output (GDP):

As the graph shows, the budget deficit fell under the sustainable threshold of 1 percent in 1994 under Dr. Jagan and 1999 based on what Janet Jagan handed over to Jagdeo.  From the chart, one can observe with facts that Bharat Jagdeo’s  favourite toy was Guyana’s credit card but what is surprising is that he has a loyal student in President Ramotar. If a company were run like this, it would have long been declared bankrupt. So how much longer can we defy financial gravity?

My humble advice to the majority opposition: the voters of Guyana shall deal with you condignly if you dare accommodate this sad excuse for a National Budget.  It is anti-business, anti-working class, anti-women, and anti-young people.  Those are four constituents no sensible political party can afford to alienate.

At minimum, there must be clearer cut plans on how the Government will create jobs for the jobless; offer tangible salary increases and a reasonable increase in pension; industrialize and transform the economy into more value added industries like bio-fuels, agro-processing and finally establish programs that will unleash the empowerment opportunities for our people especially the youths and women.
Interesting times ahead indeed!

Sasenarine Singh