Opposition Leader recommends measures to cushion rising cost of living; hefty salary increases will fuel inflation- Finance Minister

Last Updated on Friday, 27 January 2023, 19:28 by Denis Chabrol

Opposition Leader Aubrey Norton on Friday recommended a “raft of measures” to ease the impact of high cost of living, on the final day of debate on the 2023 National Budget, but Finance Minister Ashni Singh cautioned against rapid wage and salary increases.

They included vouchers for those in public transportation so that they can access lower gasoline prices, waiver of electricity and water charges for low-income Guyanese.

Mr Norton is also asking for GY$5 million or more grants to small businesses, based on objective criteria, so they can expand production and the writing off of University of Guyana student loans and fees to free up disposable income for families.

In terms of actual cash-in-hand proposals, the Opposition Leader asked the People’s Progressive Party Civic (PPPC)-led administration to equitably distribute the more than GY$60 billion- or about GY$300,000 per household- from unexpectedly high oil prices in 2022; a minimum 50 percent increase in wages and salaries for all public servants.

However, Finance Minister Dr Ashni cautioned against the erosion of real value of wages although government would like to pay more. “The answer, Sir, is not to increase wages in a wild and reckless manner that, in fact, would be more inflationary than anything and, therefore, undermines the values of people’s fixed incomes, their salaries,” he said. He  said the solution would be to increase wages and salaries progressively to preserve their real value.

Dr Singh said government could not get “carried away” by oil money but instead spend on current priorities and save some for the future.

Both Mr Norton’s People’s National Congress Reform-led coalition of A Partnership for National Unity+Alliance For Change and the PPPC had promised in the 2020 general election campaign to scrap university tuition fees.

The Guyana government and the Caribbean Development Bank (CDB) have separately cautioned Caribbean countries against paying increased wages and salaries as doing so will fuel inflation and spiral already high cost of living.

But Guyana’s Opposition Leader recommended an increase in agricultural production for localised consumption in order to prevent fuel prices from feeding into inflation. ” This will go a far way in reducing the amount of money regions spent on transportation and will also result in the reduction of food prices in those Regions and are anti-inflationary and will redound to the benefit of all Guyanese,” said Mr Norton.

He promised that if elected at the next general and regional elections, a coalition-led administration would remove income tax from all those living below the poverty line. He added that no one earning below $150,000 should be paying personal income tax as well as use  salary top-ups to bring Guyanese above the minimum livable income.

Mr Norton said GY$50,000 per month would be given to students to attend tertiary institutions, Guyana School of Agriculture and technical institutes among others.

Also being offered in the pipeline  are special scholarships for children if the poor who are capable, increased  public assistances to the pool and their children, reduction of Value Added Tax from 14 percent to 12 percent, and a network of early childhood education centres and systems to help single parents and the poor in general.

The Opposition Leader also sees the need for a home for the homeless. Mr Norton welcomed  the GY$40,000 per month part-time jobs, he said that was not solution to unemployment. “It might be useful to the government as a tool for bribery and control but it is also a manifestation that the government has failed in its quest to provide employment for our young people,” he said.