WPA not worried about bankable risk of cash grant as income

Last Updated on Tuesday, 22 October 2024, 19:45 by Writer

Professor Clive Thomas

The Working People’s Alliance (WPA) on Monday dismissed suggestions that commercial banks might not want to risk accepting cash grants as a type of income to lend money because of the likelihood that the cash grant policy could be changed by a new government in office.

“Why should an incoming government, if a social programme is working, want to abandon it?,” WPA Executive Member, Distinguished Economics Professor, Clive Thomas asked rhetorically. He said there was no different uncertainty from depending on a private employer who disappears without paying workers.

He said the intent is to make the cash grant system part of the cultural, social and economic legacy for the benefit of working people “so that they will not forever be known as the working poor.”

WPA Co-Leader, Tacuma Ogunseye suggested that there would be enormous political risk by any government to withdraw an entrenched cash grant system. “While it is theoretically possible, it is also possible that the masses of people will fight to defend their interest so that will act as a constraining [sic] for any government. It is like asking if any government will take away your Old Age pension,” he said.

Dr Thomas, who first recommended an annual cash grant of US$5,000 per household from oil revenues, said disbursements should be guaranteed by law and linked to income tax compliance with the Guyana Revenue Authority. “Everybody who becomes a recipient of the ‘Buxton proposal’ universal basic income becomes registered for paying taxes so we have that safeguard and that running agency covering their distribution and payment of income to anybody in the country,” he said. He also said a digital identification system could also be put in place to link recipients to monitor their financial and other assets.

Opposition Leader Aubrey Norton last week said if his People’s National Congress Reform-led coalition wins next year’s general elections, Guyanese would get a monthly or quarterly cash grant of GY$100,000 to GY$150,000 that could be used as income to acquire bank loans.

Seeing cash grant or universal basic income as a poverty alleviation tool, the WPA reiterated its recommendation for a feasibility and a pilot study on how best to distribute a portion of the ‘oil money’ to households while, at the same time, guard against convenient splitting of households to drawn down on more money.

Dr Thomas registered his disgust at government’s decision to switch from GY$200,000 per household to GY$100,000 to every adult 18 years and older as of January 1, 2024. He believed that such a move links the grant to electioneering for next year’s general and regional elections. “This, to my mind, is a scandal of very high proportions… crude, nasty and awful and we should not turn ourselves into that kind of person,” he said. He said in Guyana it has been well-established that two features of a household are a “common roof” such as tents and bottom houses and a “common pot” based on the needs, preferences and financing of food.

He called the recently-announced cash grant a “handout” because there was no guarantee it would be repeated or disbursed with stated regularity.