THE 2011 National Budget presented in the National Assembly Monday by Finance Minister, Dr. Ashni Singh, gives further hope for optimism because of the many positives outlined in the document.
The budget has addressed key areas of concern such as taxation, the income tax threshold and Old Age Pensions and Public Assistance, apart from continued focus on infrastructure development, drainage and irrigation, investment initiatives and the social sector.
This will certainly be welcomed by most people.
The reduction of corporate taxes should give businesses and industries a greater opportunity to reinvest, expand and recapitalise and this will help create employment and in the long term improve the national economy.
In fact, a study by the Inter-American Bank (IDB) had found that corporate taxes were too high and was a disincentive for local businesses to expand their operations and consequently had recommended a reduction of corporate taxes.
Upping the income tax threshold from $35,000 to $40,000 will get a nod of approval from all Guyanese, particularly those from the working class because it means a greater take home pay and increased spending power. Indeed, this was one of the issues which many people were anxiously waiting to see how it would be dealt with.
Some may argue that it should have gone a bit more but they must also understand that there has to be a balance because if there is too much revenue loss, the developmental programmes and social sector spending could be adversely affected. However, it was not surprising that the threshold was increased as the current government has been increasing it progressively within the limits of affordability.
Increases in Old Age Pensions and Public Assistance are another demonstration of the government’s commitment to reducing poverty and helping the underprivileged and here again the increases are not surprising because these have been continuously rising under this government.
At the macroeconomic level, it is most heartening that there was economic growth for the fifth consecutive year as the Finance Minister reported a figure of 3.6 %. Growth for this year is projected at 4.6 % while inflation is estimated to be at a very manageable 4.4%. This is testimony to the sound management of the national economy which has been acknowledged by the major international financial institutions.
The claim by the political opposition that the budget is geared to buy votes in an elections year is not surprising.
The current opposition parties believe that their job only is to criticise and as such even if the government does something good, they will not acknowledge it. Instead, they would seek to invent or manufacture faults or flaws. These comments on the National Budget are yet another example of this belief.
And herein is the difficulty in improving the political culture of this country which is so vital to moving it forward at the desired rate.
Until and unless this culture is changed, moving forward politically will remain painfully slow.