LAST Friday, Finance Minister presented this year’s National Budget in the National Assembly which amounted to $192.8 billion which surpassed last year’s budget of $161.3 billion which was then the largest in our history.
The budget is indeed an encouraging one as it is clearly working class oriented because one of its highlights is the proposed significant increase of the income tax threshold which could see it moving from $40,000 to $50,000 representing a 25% increase. And already the trade union movement has expressed its happiness at this development because for a long time it has been pressing for such an increase. An additional 21,000 workers would now be removed from the income tax net and which would naturally result in them having more disposable income.
The largest umbrella trade union body FITUG in a statement made it clear that it welcomes this threshold increase and this is not surprising because the government has responded extremely favourable to its call.
“FITUG welcomes this budget as a pro-worker budget, particularly given the 25% increase in the income tax threshold. FITUG also welcomes the support for the sugar workers of this country and their families, also the direct support to avoid increases in electricity bills by 20%, since it is the average worker that would feel the brunt of this. But first, we recognise that the 2012 Budget reflects a country continuing on the rise, and all Guyanese should have a sense of pride of what we, as Guyanese brothers and sisters, can achieve when we work together. Real growth in gross domestic product averaging 4.4 percent over the past five years, external reserves rising threefold since 2006, to US$798 million, external debt being reduced from 658 percent of GDP at the end of 1991 to 47 percent at the end of 2011, the fiscal deficit being reduced from 11.2 percent in 2006 to 4.4 percent in 2011, foreign direct investment amounting to US$1.3B over the past five years, credit by the banking sector expanding by almost 20%, and inflation last year being only 3.3 %. Apart from economic growth, we are pleased with both the level of foreign interest and investment and the expansion of lending by our banking sector,” the trade union umbrella body asserted.
The financial support to GUYSUCO and GPL is crucial and is a further demonstration of the government’s concern for the plight of the working class because without financial support to these two major entities the adverse consequences on the poor classes of people will be severe.
In the case of GUYSUCO it could mean closure of several factories, in the worst case scenario it could mean the collapse of the sugar industry and the associated socio-economic negative impact on the national economy and the lives of people.
With respect to GPL, electricity tariffs would be forced to astronomical levels because of the spiraling fuel prices mainly as a result of the instability in the Middle East.
Perhaps one disappointing area with this year’s budget is the small increase in Old Age Pension and Public Assistance which saw a proposed $600 and $400 increase respectively. But one must also concede that this government has been increasing these benefits every year but because of the low level they were at in the pre-1992 era they still remain relatively low despite the steady increases. Furthermore it must be recalled the abhorrent means test for qualification of Old Age Pension despite attaining the age of 65 was abolished during the early period of this government.
It is also almost certain that if the financial resources were available then the government would have put forward a higher figure for Old Age Pension and Public Assistance. However, it is not too late to see if corners could be cut elsewhere to facilitate additional increases.
But whether one is a supporter or not of this government he/she would have to concede that the budget is one that strives to address all the social and economic issues in an adequate manner as possible.
In addition, the statistics irrefutably demonstrate the astounding performance of our economy in 2011 in a most troubled global arena and for this the macro-economic management of the national economy must be lauded.
But perhaps more importantly would be the stance of the political opposition with their one seat majority.