PEOPLE’S BUDGET –Private Sector hails Budget 2016 as ‘pro-working class’

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PSC Executive Ramesh Dookhoo

By Svetlana Marshall

THE $230B budget presented by the APNU+AFC Government will set the stage for massive development in Guyana. In the words of Clinton Williams, immediate past President of the Guyana Manufacturing and Services Association (GMSA), it is a “people’s budget”.“It is a pro-working class budget,” Mr Williams told the Guyana Chronicle on Sunday, adding that “it sets the stage for the good life that the coalition Government has promised the people of Guyana.”

In the budget, which last Friday was presented to the National Assembly by Finance Minister Winston Jordan under the theme “Stimulating Growth, Restoring Confidence: The Good Life Beckons,” $40.3B have been allocated for the Education Sector, $28B for the Public Health Sector, $24B for Public Security, $20.3B for the Agriculture Sector, $15.8B for Housing and Water, and $14.4B for Public Infrastructure. This is in addition to the US$50M loan agreement between the Governments of Guyana and India for the construction of a new road link between Ogle on the East Coast of Demerara and Diamond on the East Bank of Demerara.

According to Mr Williams, the rebuilding of physical infrastructure — such as roads, bridges, airstrips and harbours — is critical for the development of the country.

Former GMSA President Clinton Williams
Former GMSA President Clinton Williams

“Investment in technical and vocational education is critical for our existing manufacturing sector, and also for the mining sector and the emerging oil and gas sector, among others,” he said.

AFHP
Chairman of the Private Sector Commission’s (PSC’s) Trade and Investment Sub-committee, Ramesh Dookhoo, applauded Government’s decision to reconsider construction of the Amaila Falls Hydro Power Project, noting that this initiative had, in the past, gained the support of the private sector.

Though not considered to be viable in its current configuration, the coalition Government and the Kingdom of Norway are engaged in discussions for a final review and determination for the future of the Amaila Falls Hydropower Project.

Additionally, the Government proposes to prioritise the construction of four mini-hydro power stations at Kamaira, Kumu, Tumatumari and Tiger Hill.

Expressions of interest (EoI) have also been invited from firms for the rehabilitation and operation of the Moco Moco Hydropower Scheme under a Build, Own, Operate and Transfer (BOOT) arrangement. The intent is to supply power to the Lethem Power Company Inc.

Mr Dookhoo said this is a step in the right direction. “The private sector needs a massive solution to our energy issue. If we are to remain competitive, we need to have electricity that is comparable to any other country in the world,” he said.

In addition to the production of renewable energy, Mr Dookhoo was also in favour of Government’s decision to reduce excise tax on motor vehicles and ban the importation of used tyres.
According to him, the reduction in the excise tax will pave the way for more of the “average Guyanese” to become owners of vehicles.

Excise tax on motor vehicles under four years old and under 1500cc is in line to be removed. Currently, these vehicles attract excise tax at the rate of 30 per cent and an effective tax rate of 118.7 per cent. With this removal, the effective tax rate will be reduced to 68.2 per cent.

Additionally, there has been a reduction of excise tax from 50 per cent to 10 per cent on motor vehicles under four years old and between 1500cc and under 2000cc.
As a result, the effective tax rate of 152.3 per cent will be reduced to 85 per cent.

“This is a very positive move,” Dookhoo said, as he alluded to the measures to reduce excise tax on imported vehicles. In addition to the reduction of excise taxes, the Government has taken a decision to reduce the importation of used and/or reconditioned vehicles under eight years old from the date of manufacture to the date of importation. This restriction will take effect from May 1, 2016.

USED TYRES
Since 2011, the Guyana National Bureau of Standards (GNBS) had called for a ban on used tyres, citing safety implications. Approximately five years after that call, the new coalition Government has taken up the challenge. Among measures announced by the Finance Minister were an intended ban on the importation of used tyres and a reduction of taxes on new tyres to encourage their use.

This ban will be put into effect as soon as some procedural hurdles are cleared, and according to Dookhoo, the Government has once again made a very good decision.

“I totally agree with the ban on used tyres…. Why should we be using second-hand tires from another country?” he asked.

In addition to representatives from the private sector, the Guyana Trades Union Congress (GTUC) was among organisations that applauded the Government on this year’s budget. The GTUC has said that the Government’s decision to await the conclusion of discussions with unions before announcing salary increases for public servants ought to be applauded.