Opposition Leader, Bharrat Jagdeo on Monday assailed government’s 2019 National Budget moments after Finance Minister, Winston Jordan delivered a GYD$300 billion package of revenues and expenditures.
‘We can’t support this budget, not in its current form,” Jagdeo said, adding that the opposition People’s Progressive Party (PPP) had expected government to take into consideration its concerns and the pending no-confidence motion.
Jagdeo, a former Finance Minister when Jordan was government’s Budget Director at the time, said the budget offers a GYD$1,000 increase in old age pension and public assistance but overall takes back GYD$223 billion in taxes, a GYD$31 billion increase over last year’s figure. He labelled the budget “visionless”.
“On jobs, on crime-fighting, on welfare, on stimulus for business, on cutting extravagance: they have failed. This budget has failed. It is the same visionless budget, filled with platitudes and condescending attitudes that they have come up with once again,” Jagdeo added. Crime-fighting, he said, largely focused on rehabilitating and rebuilding prisons and police stations.
Overall, he questioned how could the government be giving up GYD$3.5 billion in revenue through tax exemptions and reductions without putting in place a stimulus package and job-creation plan. He described the exemptions to the manufacturing sector as “cosmetic” and gave “nothing” to the mining sector. In the area of housing, he said government failed to grant tax exemptions on sand, cement and steel but merely did so for concrete blocks.
He said government failed to provide a stimulus package for a “tanking” economy or any job-creation opportunity. He calculated that from 2015 to 2019 government would have collected GYD$88 billion annually on a base of GYD$135 billion when the PPP lost power.
“This is unbelievable that a government that thinks that the economy is already tanking in spite of what they said, you would think that they would either give a stimulus through greater tax write-offs or reduce the overall taxation or alternatively, they would come up with a series of policies that would be a stimulus to the private sector,” Jagdeo said.
He noted that Finance Minister Jordan “confirmed that the economy performed badly in 2018″ when one looks at the revised economic growth and the performance of a number of sectors.
The Finance Minister has said the mining and quarrying sector is projected to contract by 2.3 percent, in 2018, despite remarkable growth expectations for the bauxite and other mining sub-sectors.
With debt servicing now calculated at seven percent of revenue, Jagdeo said the PPP should be credited for taking a bankrupt economy in 1992 and reducing the debt service ration from 153 percent. “He should give credit to the PPP for doing that,” he added.
A range of tax exemptions and reductions have been announced for government employees and the private sector.
During his more than four-hour long budget speech, the Finance Minister announced that real Gross Domestic Product is expected to be 4.6 percent next year compared to 3.4 percent. Inflation is projected to be 2.5 percent and the central government overall deficit is is expected to be 4.6 of GDP in 2019, .4 percent less than in 2018.