What to look for in today’s budget
August 10, 2015 | By KNews | Filed Under Features / Columnists, Peeping Tom, Source
Today is Budget Day! There are high expectations of this Budget since it is the first one for the new coalition government and there are high expectations that it will bring relief to a number of sectors in the economy.
Today, I will examine what are some of the important things that Guyanese should look for in the Budget. These are some of the things that you should expect or not expect in the Budget.
Over the past few days the government has been cushioning expectations. This means that there will be some surprises in the Budget, some very pleasant surprises.
The other thing is that the government will have to deliver on its election promises and therefore despite what has been hinted over the past few days, there will most likely be an attempt to honour most of the promises which have to do with the Budget.
It is hard, for example, to see how VAT will not be cut. Two possibilities exist. One is that it will be reduced to 15% which is a one per cent cut with a promise of further reductions in the future.
The other is that the government will go the PPP way and simply reduce the VAT on some consumer items. The latter seems most likely. So expect perhaps to no longer pay VAT on tennis rolls and pastries.
The government also promised significant salary increases. It later modified this to indicate that the increases will be moderate.
There have been no negotiations with the GPSU and the government over wage increases for public workers and the new APNU+ AFC administration is not likely to want to impose any increase on the workers.
They are therefore not likely to announce an increase. They are more likely to indicate that some provisioning will be made until such time as they have concluded their inquiry into the benefits of public servants.
As such, the same thing that the PPP did over the last ten years is likely to repeat itself again with no increases for public servants being announced but provisions being made for whenever the increases are decided on. This is usually in time for Christmas back pay.
There will also be no tax reform measures announced. The PPP was fond of saying that there will be no new taxes. The new government is likely to repeat that pronouncement. They too are likely to announce no new taxes for this year.
This will of course disappoint some folks at Town Hall who were hoping that their twenty- two year proposal for a container tax would have been favorably considered by the new administration.
But perhaps, they have not yet made a formal presentation to the new government about these new taxes. So do, not expect any municipal new taxes also.
So just what should the Guyanese people expect? Well for one there will be benefits for gold miners. They will get some relief on tools and fuel. This has already been announced.
There will be some relief for the sugar industry, even though it is likely to be less than what was given last year. The subsidized tariffs for electricity in Linden will take up a few more billion dollars.
Nothing will change with that. But perhaps, those inquiries that the PPP reneged on may be recommenced as a means of trying to find a solution to this inequitable situation whereby one set of consumers pay one price and the others pay a fraction of that price for electricity.
Expect more spending for the military. After all, there are a lot of ex-military personnel in government and there is a threat from Venezuela. So the military will have to be boosted.
The business community will be told that a stimulus package is on their way. This stimulus package will be in the form of public works. This of course is the same strategy that the PPP used year after year by priming the public sector investment programme to provide a boost to private enterprise.
The more you look at what is likely to play out today with the Budget, the more you want to feel that what the APNU+AFC coalition will deliver tomorrow is a typical PPP Budget.
