Budget Debate 20131938 02 Apr, 2013
Mr. Greenidge: Thank you very much, Mr. Speaker. I take the opportunity to express the wish that colleagues would have had an enjoyable Easter and are suitably rejuvenated to help us through the exercise that is before us this week and the following week and thank you also for giving me my full title.
Mr. Speaker and Colleagues, I would like to start by thanking the Minister of Finance for giving us on Monday, 25th March, a most interesting budget presentation; a presentation itself which I believe was full of what I might call “slights of hand” and “little tricks”. We had a budget opportunity that would have enabled us, I think, to address a number of very important issues before the country and rather than taking the opportunity to deal with them frontally, we did some other things. Let me say that even a cursory reading of the recent social and political history of Guyana would reveal that a general consensus exists around the fact that whatever might be the Government’s claims as regards economic statistics that Guyana is facing severe problems that warrant attention. These problems include a very high and socially dysfunctional rate of unemployment and that high rate persists in spite of an unprecedented flight of Guyanese from these shores; a flight which has left us in a situation where we started off in the early 1960s with a population similar to that of Trinidad and Tobago and now our own population struggles to be half of that of Trinidad and Tobago.
The problems faced by Guyana that contribute to that flight include simmering communal and other tensions, one of the highest rates of suicide in the world, a growing army of destitute and mentally ill persons on our streets, along with hoards of unskilled and often hopeless youths. No one visiting Guyana within the last 15 years has failed to notice the impending environmental and public health catastrophe associated with what appears to be a calculated policy to dispose of solid waste in public spaces and waterways in a manner that defies civilized public health standards and practices.
A Partnership for National Unity (APNU), in particular, continues to vigorously draw to the Government’s attention the need to address these burning issues. Indeed, I think that we never miss an opportunity. The calls have generally been resolutely ignored and in the run-up to the Minister’s laying of the 2012 Appropriation Bill, the Opposition Parties agreed amongst themselves, that is the APNU and the Alliance For Change (AFC), that they would only support a budget which addressed these key concerns. In their discussions, they called on the People’s Progressive Party (PPP) and Government representatives to attend to these burning issues and in the preliminaries, which was all we had, of the 2013 tripartite talks – these are the talks that never materialised – the points were again raised. Since many, I think, commentators, partisan and non-partisan, seem to forget that the two parties have, at various points, announced priorities that they felt should be addressed, let me just remind the House that the joint APNU/AFC agreement which formed, in part, the backbone to the discussions that took place in 2012, as I mentioned, made it clear that the budget that we saw in 2012 did not meet the demands for changes to stimulate growth, to lower the cost of living and improve the quality of life for ordinary people and those remain major concerns certainly of the APNU and the AFC will speak for themselves.
The Opposition’s demands at that time were a reduction in the Value Added Tax (VAT), reduction and changed arrangements for the Berbice River Bridge toll rate, an increase in the salaries of Public Servants, increases in the subvention to the University of Guyana, increases in the retirement age of Public Servants, a removal of the constitutional offices from the schedule of budgetary agencies captured in the Fiscal Management and Accountability Act which would include Guyana Elections Commission (GECOM), the Service Commission, the courts, DPP, the Auditor General and so forth; the call for the Government to restructure the Guyana Sugar Corporation (GuySuCo) and Guyana Power and Light (GPL) so as to convert them into viable corporations that could contribute in a meaningful way to the development and the exploitation of our productive capacity; the need to restructure the National Industrial and Commercial Investments Limited (NICIL) and to bring its financial assets within the ambit of the Consolidated Fund and to restructure the Guyana Information Agency (GINA) and the National Communications Network (NCN) to make them into responsible national institutions. I might also add that the parties also urge the Government to establish, without delay, the National Procurement Commission.
There has been very little discussion on most of these matters in the budget statement itself and even less provision in the estimates, so before I turn to some of the specifics mentioned by the Hon. Minister in the budget statement, I would like to touch on some of these areas and I start with a set of comments on the question of poverty and pro-poor policies. The proposals coming from the APNU in terms of poverty and the need to alleviate and reduce poverty and the growing income inequality in Guyana was supported by findings from several studies. Those studies, including one prepared by the World Bank and published in 2003, argue that in addition to the outward migration or, if you like, emigration of skilled workers and declines in domestic and foreign investment, the declines in Guyana’s economic growth between 1998 and 2004 were partly due to less favourable political and institutional environment after 1997 and they argued that investment is needed, but it is impeded by a number of factors – some of which appear in the most recent report on the ease of doing business in the Caribbean and in the world, in which Guyana is featured. They argue, for example, that investment is impeded by a complex regulatory framework and that the enforceability of laws remains limited in Guyana.
Beyond weaknesses in legal and institutional arrangements, they note that the polarised nature of Guyanese society is a continuing source of violence and that also acts as a disincentive to investment, but really what I am trying to emphasise here is that the analysis underlines or underscores the role that institutional weaknesses play in hindering the effectiveness of the policies which are fashioned and intended to enhance growth and development and the bank, in looking at the debt relief initiative, had helped to lead, on Guyana’s behalf, pointed at that time to the fact that these institutional weaknesses were hindering the effectiveness of the debt relief initiative and it included a weak capacity to plan, implement and manage development policies and they emphasise the lack of skilled personnel.
The importance of institutional capacity, I think, is one that we cannot exaggerate and in the light of that one would hope and would have hoped that the budget would pay some special attention to building the human resource base, strengthening human resource capacity in Guyana and in that way, not only increasing the quality of the human resources that we have, but trying to attenuate the flight of skills which has characterized us for so long in the Region, but when we had had some discussion on this in the past, there was a justifiable claim on the Government’s side that they had had policies in the past, the Poverty Reduction Strategy Papers (PRSP) in particular, which reflected an agreed approach to poverty alleviation and that approach had been one agreed to between the donors and the Government of Guyana. More recently, as this budget itself shows, there is or has been something of a lack of attention to poverty and poverty alleviation in the approach of the Government and that has been especially the case since the so-called National Competitiveness Strategy has taken the emphasis away from issues of poverty alleviation and put them elsewhere when, in reality, these ought to be complementary strategies and should not be at the expense of dealing with poverty, especially at a time when inequalities and, as I say, destitution in the streets seem to be growing almost daily.
The APNU itself had expected that a pro-poor policy programme would have been a significant pillar of government policy. In fact, when the Government of Guyana was seeking Heavily Indebted Poor Countries (HIPC) assistance it had agreed to give priority to a number of areas and I would like to mention them because in my view, and I think in the view of many others, these areas still warrant priority attention. They were the projects that were captured and these could be called “poverty oriented expenditure programmes”. They were projects executed under the Social Impact Amelioration Programme which, of course, had been launched prior to the accession of this Government to office. There was a Basic Needs Trust Fund. There were elements of a poverty programme administered by the Ministry of Finance. There is also a student loan programme and a number of the programmes and projects within some of the sectors, such as agriculture, communications, the sanitation sector, I may emphasise and the need for institutional strengthening in a number of these areas.
It perhaps is worth mentioning that as the millennium developed pro-poor spending fluctuated and it fluctuated because the priority to poverty was concentrated on a few programmes; these that I have listed, but the thing is that these programmes were funded primarily by external donors and to the extent that the donors funding to these agencies have declined in recent times, the importance of these projects seem also to have declined commensurately. What I am saying is that the decline in the emphasis given to the pro-poor package is entirely attributable to Government’s policy – the policy of the Government and its advisors – which exhibits a preoccupation with flagship project, large, lumpy, prestige projects rather than projects that address the critical issues that are before us. The Government seems to feel that dealing with poverty is not their responsibility; it is the responsibility of the foreign and donor community so as a consequence, when those donor funds have been reduced, the projects of this type have been denied funds. The Government has, in other words, failed to compensate the changed composition of the donor package and in the process, the poor have been neglected.
In the work that we have been doing over the last 14 to 15 months, there is a continuing public concern with this issue of poverty, the related issue of unemployment and a recognition and acknowledgement, a clamoring for institutional reform that could help us to attenuate these problems. These concerns outside seem to find no resonance with the PPP leadership- none at all.
The second observation that I would like to touch on, because it has not been discussed in any significant way in the budget presentation, has to do with the debate on taxation and the Value Added Tax in particular. As a result of the tripartite discussions last March, President Ramotar had agreed to establish a committee to look at the Opposition’s request for a reduction in VAT rates and that was to be treated as part of an overall review of the incidents of the tax system on different groups. The committee, consisting of business men and at least one academic, was supposed to make recommendations in the light of these concerns. Of course, since the President set up that body and relatively recently, the Hon. Minister of Finance has publicly rejected calls for reduction in VAT and in that regard, he was joined by the Director General of the Guyana Revenue Authority (GRA) in putting forward a most furious and ill-founded argument to the effect that a VAT reduction will primarily affect businesses. The poor private sector, I might add, have had some of their spokesmen swallow this particular line hook, line and sinker, as they would say and followed them along this line of argument and they have even garnished it a bit with an even more alluring and selfless claim, I might add; namely, that the VAT is a luxury tax and therefore, it is mainly borne by the rich and for that reason, the poor should be happy that it is in place and protecting them from the Government, so the Private Sector Commission has been selling this idea as a complementary idea to the Minister’s argument.
Mr. Speaker, I would like to cite you a letter written by two members of an Non-Governmental Organisation (NGO) - Red Thread- in fact, because it is instructive and it points to how distant our policy makers are from the reality of what is in the street and how distant they are, if you like, the considerations governing the theory and policy of taxation. The writers pointing to the impact of tax on their daily purchases state:
“For example, at the cheapest price one pack of chowmein costs $167 plus VAT which is $26.72 extra, one pack of macaroni costs $150 plus VAT which is $24 extra and a 185 gram package of curry powder costs $92 plus Vat which is $14.72 extra, but we not only need food, we need to iron our clothes and a cheap iron costs $1995 plus 16% VAT which is $319 extra. We need to cook and a four-burner gas stove costs $36,000 plus VAT which is $5,760 extra. We need to store our vegetables and meats and a small fridge 5.3 cubic feet in size costs $59,999 plus VAT which is $9,600 extra. We need a bed to sleep on and a single bed costs $15,960 plus VAT which $2,554 extra and a double bed costs $38,640 plus VAT which is $6,182 extra. We need lights and the energy-saver bulb which we will want to use to save money costs$365 plus VAT [I understand that it is uncomfortable] which is $58 extra. The telephone bill also attracts VAT. Most of these extra costs look small [and I am still quoting, Mr. Speaker] but only to those whose incomes are large…”
May I repeat that?
“Most of these extra costs look small but only to those whose incomes are large. Imagine a single mother on public assistance who gets $5,900 subsequent to the 2012 Budget needing a kerosene stove at the cost of $1,512 plus VAT which is $288 extra and the three energy saver bulbs are the cost of $1,095 plus a total of $174 for VAT.”
Mr. Speaker, the authors of the letter to the Stabroek News published on 5th April are making a fundamental point. [Mr. Nandlall: inaudible] It should be familiar… All single mothers do not want to work; yes, Mr. Attorney General. It should be familiar to all second year economic students, namely, that for low-income groups characterized by a Guyanese earning $5,900 or $50,900 a month, the VAT is paid on almost all of the entire income since for obvious reasons, all that income will be spent on basics; notwithstanding the zero-rated items or those attracting low rates which include some unprocessed foods such as flour as well as clothes and medicines- most of the purchases effected by the poor attract taxes. As may be seen from the foregoing example, the idea that VAT is a luxury tax is so ridiculous as to not merit further comment here.
VAT and consumption taxes are termed regressive taxes and were initially not high in the priority list of economists precisely because they bore more heavily on the lower than on the higher income groups. They are a greater burden on the lower than on the higher income groups and this means that they take a smaller portion of the income of the well-off than they do of the poor.
It follows that the suggestion that a reduction of the tax would benefit from the poor little but will mainly be of benefit to the rich is one that any second year economics student would acquire a failed grade for proposing. The burden of taxes is measured not in absolute terms, but in proportional terms. The argument that a tax, which bears more heavily on the poor than on the rich, will not benefit the poor if reduced or lifted is one that I could not imagine a politician in Barbados or Jamaica making and surviving. In a way, Guyana is a blessed place for some.
For those who missed the relevant lecture on “Public Finance,” the attraction of the Value Added Tax (VAT) has nothing to do with its intrinsic value on equity grounds, that is, whether it is supposedly agreed to burden upon the rich than on the poor but because its base is every transaction; it is collected from a larger proportion of firms than any other income tax of any type or any single stage consumption tax. Therefore the total amounts collect by VAT and those affected by it are far wider than the consumption tax that preceded it and which it replaced. That is the issue; that is the strength of the VAT; it is not that it is more equitable. It is not more equitable; it is a regressive tax, and that has always been the case.
As far as equity is concerned, however, because it is regressive and because it is inequitable, this tax normally is associated with a reform of what the tax is and a reform of those other taxes is intended to cushion the repressiveness either by promoting more progressive taxes - but that has problems toady in the way that we look at these tax burdens - or by way of specifically reducing those taxes that are normally borne by the poor. In other words, it is to try to compensate by reducing the taxes paid by those who are regarded as being less well off. In Guyana this was especially important because we had, under the Economic Recovery Programme (ERP) and subsequently, taken the step of removing a good deal of the progressiveness in our taxes, including in the personal income tax with the arrangement that we have now where it is a flat tax beyond the certain income level and the same proportion is paid by everyone. That is something which needs to be borne in mind and that is why when the advisers to the Ministry of Finance looked at the question of the VAT it was clearly understood and agreed upon at that time that the imposition of it would be accompanied by the adjustment of other taxes.
The Government, having introduced it and realising that the bulk of the poor are, perhaps, not its concerned, has decided to abandon this second stage. We saw that last year, when the President offered to have the tax regime and the incident of taxation on different groups examined by a group. We have not heard a beep from him since then. It is doubtful whether the Committee has met and the Minister has not had the decency to even report to us as to the status of that Committee and of the report. We have nothing in the budget that tells us that the President does not hope that we have forgotten the pledge that he took to have the Committee meet and report within the year 2012. The structure of the taxation system, which was to have been modified, remains and in the meantime the businesses, which are supposed to gallantly carrying the tax burden on behalf of the poor, are busy, some of them, trying to dodge the burden of the taxes by a range of devices, including the misclassification of a number of items so that they do not have to carry the impost.
My grandmother was fond of saying that “God don’t sleep.” There is an electorate out there and they include the poor, they include those who pay VAT and there will come a time when we have to turn to that electorate and they will not forget this bad faith on the part of the President, in particular, and the PPP in general. We will bear that in mind.
The PPP regime continues to be in denial as regards these general issues of poverty, unemployment, and so forth, which I have mentioned, and that the two opposition parties try to encourage it to examine. I would like to draw to the House’s attention that we have been asked to look at an Appropriation Bill and Estimates whilst the basic requirements of the Constitution are still the subject of infringement by the Government. The Constitution, let me remind you - I know that some people are tired of hearing this - Mr. Speaker that the Constitution, in relation to the format of the Estimates, has something to say and article 222A states that in relation to the entities, which are supposed to be independent, the constitutional entities that the annual subvention should be reflected in the Estimates by way of an annual subvention approved by the National Assembly after review, and so on. They are supposed to be a part of a direct charge and more specifically that are supposed to be reflected as a lump sum in the Estimates.
The Estimate I have before me…, a matter on which the Chief Justice had something to say and specifically he had something to say interestingly enough about one of the few entities, which is reflected in here, that actually should be shown as a lump sum and is shown as a lump sum - the Ethnic Relations Commission. Mr. Speaker, you will find that between pages 397 and 400 the Estimates show that not all of the entities, which are listed in the Schedule, including the Audit Office, are reflected as is the ERC and as is required by the Constitution. I hope that I am making myself clear. We are confronted by an administration that has consistently flouted the requirements of the Constitution, consistently ignored the calls, the decisions, the resolution of this House passed last year to amend the Fiscal Management and Accountability Act (FMAA) and then ignored the Bill which was an amendment to the Constitution adding these constitutional offices where they had been omitted from the Schedule, Third Schedule (a), and in spite of this infringement of the Constitution we are being asked to approve a budget. In other words, we are being asked it is to join the Government in breaking the law.
Maybe, I should add that just in case there are some questions as to time or the ability of the Government to amend the relevant tables I notice - I am not trying to be malicious - that on page 398 of these Estimates there is a category, which I had not noticed before. Obviously, it was there, but it now has resources alongside it, for the year 2013, and that item is called, under Agency 01 under the Office of the President, Office of the First Lady. It has been added and there is a figure there. In other words, it seems that the Government has its priorities a bit skewed. I am not saying that this should not be there, but I am saying that just as how this could have been added… There is a First Lady. I am not sure what the office does, by the way, but let us not dwell on that for now. The fact is that it has been added; it has not caused a crisis in the Ministry of Finance; it has not caused a collapse in our debt status, or anything such as that, and we are being asked to find money for it. In the same way the constitutional offices, in addition to the ERC, should have been reflected in this section of the Estimates.
The question, which has to be asked, is: Does the Minister have a right and is the Government, in order to ignore the constitutional requirements, at the same time, to ask us to approve moneys for them? Mr. Speaker, there is absolutely no reason why these requirements could not have been dealt with. You will note that last year, I am sure you will remember, the distinguished Minister of Home Affairs and our very energetic Minister for Housing and Water, and acting on Ministry of Tourism, Industry and Commerce, and so forth, had a lot to say, in addition to the Minister of Finance, as they usually support him on this matter, when we cut the amount for Customs Anti- Narcotics Unit (CANU) and State Planning Secretariat on the grounds that the Auditor General had properly pointed out that these things should not have been where they were and we were not prepared to approve moneys for them. I am happy to say that this year, I note, that the funds for CANU - the Customs Anti-Narcotics Unit - have been reduced to zero under this subsidy and presumably funded where it should have been funded in the first instance. I think I noticed that it is the same for the State Planning Secretariat.
I do not know whether I am making sense. [Interruption from the Government Members.] Well, it is just in case, because if you can get the economics…[Interruption from the Government Members.] You cannot understand the difference between a question and a comment. Those who cannot understand the difference between a regressive tax and a luxury tax then one needs to make sure as, you go along, that you are being followed. This is a simple exercise. We are saying that until such time, as the Minister comes and talks to us on this matter,…It is not a surprise to them because I read to them the fact that these issues were raised when we had the tripartite meeting with the President and his advisers. The excuse they made, at the time, was that those corrections, in terms of the Third Schedule, required, first, a constructional amendment. We agreed with them on that and we have subsequently effected that constitutional amendment. Nothing stops the Minister from including these items in the Estimates. I am interested to know that a lawyer, our Attorney General, could find that a procedural matter to with a constitutional requirement does not warrant attention. [Interruption from the Government Members.] I am speaking about the substance of the Estimates…
Mr. Speaker: Members, allow Mr. Greenidge to make his presentation without interruption and unhindered.
Mr. Greenidge: The Constitution requires that these Estimates come to us differently prepared and differently presented. We would like to know how the Government proposes to do that because, at this point in time, it cannot attract our support, because it is unconstitutional.
We had also discussed, drawn to the attention of the President and his advisers, that several constitutional offices remained unfilled or the offices, such as the ERC, which were not properly or fully established. It is true of the Ombudsman’s office. There are issues in relation to the Public Procurement Committee. Incidentally the PPP is the only party not to have submitted a list of nominees for this particular body. That is another dimension that had been raised and I think we need to get answers, maybe at the Committee of Supply, so that some decision could be taken on this side as to how to deal with the Government’s request.
I will also draw to your attention, Mr. Speaker, as you will be aware, that this House passed a resolution pertaining to the Extra-budgetary Agencies and it specifically called upon the Minister…, in relation to those very contentious agencies which seem to be used as a device for bypassing this House, entities collecting State revenues and using them in a manner that is less than transparent, in a manner that seeks deliberately to deny this House its role of overseeing and reviewing the expenditure request of the country, and looking at the priority. National Industrial and Commercial Investment Ltd. (NICIL), Guyana Geology and Mines Commission (GGMC), the lotto fund, the use of the funds from the 2005 floods, the Cricket World Cup, the hosting of Caribbean Festival of Arts (Carifesta) X and the International Cricket Council (ICC) Twenty20 tournament, all of these items were the subject of a resolution by this House.
Without going through the details of the resolution, let me just remind colleagues that in relation to those agencies the decision was that the entities which as of February of 2012… I emphasise this because we have since had a mad rush on the other side to lay annual reports and a whole set of things, but the resolution was clear. It stated that if those entities which were supposed to have laid reports before this House, audited accounts and other reports, and if by February of 2012 those reports had not been laid those entities should be required - the Minister responsible in this case is the Minister of Finance - to channel all of the funds, other than the operating expenses that they had, to the Consolidated Fund until such time as we would have looked at them and decided otherwise.
Nothing appears to have happened, whatsoever, on that front and yet we have a request for the approval of an Appropriation Bill. Again, having defied the House, the Minister comes back to the House to demand that moneys be provided for additional expenditures which in effect amount to more of the same. In other words, it is where part of the revenues of the state are diverted and managed without reference to the House.
The problem, therefore, is the same as with the constitutional offices. There is a fourth element that I need to mention. The Bills, which have been passed, at least two of them, I understand, are with the President for signature. The time available by which that signature should have been effected, or a report concerning the President’s reason for not signing, I believe, has expired. In such circumstances, again, I have a difficulty understanding how we could be expected to pass a budget when such fundamental breaches of the Constitution and of our own responsibilities have continued to take place. That is a general background.
In his speech, the Minister of Finance made reference to the seven prerequisites, such as commitment to democracy, equal access, and so forth, which prerequisites were highlighted in Budget 2012. Political dialogue, which is supposed to be part of that package, would have provided the opportunity for the Minister - I am sure he is not surprised - not to be arriving at a position in the Committee of Supply where preconditions, prerequisites, concerns about legality and constitutional acceptability would loom large. Those discussions could have removed this block or removed the need for us to try and deal with that at the last minute. Here we are, they have yet to be attended. Public pledges to political dialogue by the Government filled the airwaves even as officials charged with such dialogue on the Government side once again refused either to provide information or to fix meetings, in the context of a series of meetings, rather than a last minute meeting before the consideration of the Estimates.
The question of equal access, which was also one of the things mentioned by the Minister, is an interesting one. Again, although it is a much touted, it is clear that the Government honours these things more in the breach than anything else.
The current outrage over the allocations for television and radio frequencies is a case in point demonstrating the extent to which the Government is contemptuous of public opinion and its constitutional obligations. Although the Parliament approved the establishment of a body to oversee the exercise, which should have been part of that allocation of frequencies, we find ourselves in a situation where the effect of a decision taken after the House passed the Bill, but before it was assented, in which equal access is certainly what did not take place. That is a concern. What I was saying earlier is that the Bills passed by the House seem to lie unsigned because these political and constitutional issues, which I have mentioned, are regarded by the Government in a very peculiar light. I say peculiar because this is a Government which often times claims to have been the catalyst for a return to democracy in Guyana. We find ourselves in a situation where the President believes that he has no obligation to assent to Bills which his party does not approve, which his party cannot approve on its own because it is in a House in which it is in a minority. For as long as it is in the minority it is supposed to consult with the majority and to seek the support of the majority in order to have the legislation and the measures that the Members have in mind passed. They eschew that obligation and demand the rights of a majority although they hold a minority in the House.
There is also the case of the Minister of Finance - the Minister who claims to have been advised by the Attorney General, I have no doubt to believe that he was not - in which decisions taken by this House concerning expenditures, including those out of the Contingencies Fund that did not meet the criteria set out in the Fiscal Management and Accountability Act were approved and funds not approved under the Appropriation Act were spent. We would like to know how the Government proposes to resolve that conundrum because it is an important issue, again, in terms of whether it is the House that has the responsibility for approving the expenditure or the Minister of Finance by himself or the Minister of Finance and the Attorney General.
In the light of these matters, Mr. Speaker - what I would call sins of omission as well as sins of commission - you would have thought that the honourable Minister of Finance would recognise the prudence of being perhaps a bit circumspect in his presentation. I was particularly caught by the overture in the budget, I think on the second page - well, certainly it was within the first five minutes of his presentation - an overture I think was provocative, if not arrogant. It was a tirade against the opposition parties for a variety of perceived sins facilitated by the constitutional, what he called, one-seat majority via which the House passed motions, and I quote, “…or Bills that defy reason and collide with the Constitution.”
Up to now, after over one year of debate, neither the Attorney General nor the Minister has explained why the constitutional offices are not all reflected, such as the ERC, in the Estimates and they have the gall to speak of proposals that conflict with the Constitution. There is no more obvious conflict with the Constitution than the Estimates before us today that defy article 222A.
Then there was reference to the undesirable legislative actions [Mr. Nandlall: They are not my words.] They are not your words. I want to say that these undesirable legislative actions to which the Minister referred, the ones that defy reason and collide with the Constitution, include the attempts by the House to correct the abuses as reflected in the Fiscal Management and Accountability Act. Presumably, that is one of the things that collide with reason. The interesting thing is that the Minister, himself, laid an order here, after the first motion, that removed the Audit Department from the Schedule and subsequently nothing has happened in relation to that office, as regards to the Constitution.
These political descendants of Dr. Jagan, who speak in hushed terms about his struggle for independence and the rights of the majority, somehow see no contradiction between Dr. Jagan’s professed principles and behaviour which accept a majority, in this case, a majority decision only if that majority comprises of PPP Members. The President’s party, having at the polls lost its majority, goes to the courts to, in effect, authorise it to continue to behave as though the PPP had won a majority of seats. That is the point. It does not have a majority and it wants the powers to behave as a majority. That is the point, in case the Members missed it. Under the current dispensation, the President only signs Bills, it seems, presented by his party. That is the new democracy that the PPP has heralded in for us. It is a loser takes all politics. That is what I call loser takes all politics - you lose a majority and you exercise the functions of a majority. Many of those who stood alongside the PPP, when the PPP was fighting itself for democracy, would have never expected this behaviour. Even under the PPP it was expected that the simple majority would be recognised with no distinction between a majority of fifty and a majority of one.
The basis for the parliamentary cooperation has to be a resolution to these issues pertaining to the budget itself. As regards the measures themselves, a look at the Estimates suggests a number of interesting facts. We see, for example, what appears to be the movement in numbers, that is between from one year to the next and from budgeted figures to revised figures, suggest that in some places, especially as regard Gross Domestic Product (GDP), there is the manipulation of the numbers in order to attain growth rates. [Interruption from the Government Members.] Thank you Hon. Minister. If the Members look at figures for agriculture, over the last four years, they will see what I am talking about. In fact, if they look at the balance of payment figures especially the movement of non-factor services, they will see what I am talking about, so that is one dimension.
When one looks at loans and the borrowing by the Government, the movement from one year to the next also poses a problem, in the sense that the figure posted in the budget, at the time of the budget, seems to vary so much from the out turn at the end of the year, which suggests either that sometimes, as the World Bank was arguing, planning is very poor, because if within the year - it is March now, for example, the revision is effected at the end of December - such wide movements can be seen, then if it not bad planning it has to be synergism in providing figures just to keep the other side of the House quite.
In relation to debt, the Minister’s claimed about PPP stewardship, in this regard, is a claim that turned out not to be warranted. At the end of year 2010, Guyana’s total external indebtedness, according to his figures, stood at over a billion dollars and by the end of the year 2012 that figure had risen to $1.358 billion, that is $318 million increase within two years. The bulk of those loans associated with the debts were associated with projects, many of which we have a difficulty and, of course, one of them would have been Skeldon... I mention this to say to you, Mr. Speaker, that the expansion of debt needs to be informed by some criteria…
Mr. Speaker: Hon. Member, you have, as a per arrangement, spoken for one hour. It is fifteen minutes to conclude.
Mdm. Deputy Speaker [Mrs. Backer]: I rise to move that the Hon. Member be given fifteen minutes to continue.
Mr. Speaker: It is to conclude. He has spoken for one hour. Is it to continue? The understanding that I have is one hour for certain frontbenchers and fifteen minutes to conclude.
Ms. Teixeira: Exactly.
Mr. Speaker: It is one hour and fifteen minutes.
Ms. Teixeira: No Sir. It was an agreement that Mr. Greenidge be given one hour, thirty minutes plus two fifteen minutes extensions, therefore equalling one hour. That was the agreement we had. If it is that on the very first day we are breaking the agreement, then I do not know what we are doing in this budget. Thank you.
Mrs. Backer: Mr. Speaker…
Mr. Speaker: One second please…
Mrs. Backer: Mr. Speaker, please allow me.
Mr. Speaker: Yes.
Mrs. Backer: That is not the agreement we had. As Ms. Teixeira was leaving here we spoke for about an hour and I said a further extension... If she was going to say, “Well, yes, it is supposed to be fifteen minutes to conclude”…, but we had an agreement was that if he needed an extension beyond the hour, he would get it. We said it right here.
Ms. Teixeira: Mr. Speaker, that is totally incorrect. [Interruption]
Mr. Speaker: Hon. Members, may I be heard, please? That last time we need to do is to address this matter in such a public fashion. The document, which I have before me, states thirty minutes plus two fifteen minutes extensions, which is sixty minutes, with a fifteen-minute extension. That is my understanding. If it is not the understanding of both sides of the House, I would ask that we take a recess and fix it and come back, but I will not have us discussing this matter in the open because it is bringing the House into disrepute in the manner in which it is done. Mr. Greenidge, I apologise to you and I ask that we take five minutes and I will see the Whips in my office please.
Break for discussion with the Chief Whips.
Mr. Chairman: Hon. Members, in discussion with the Whips of the Government and Opposition, it is being determined that, given the seriousness and the size of the portfolio that Mr. Greenidge has as a remit to oversee, he will be given fifteen minutes to conclude his presentation.
Mr. Greenidge, I invite you to proceed. Please accept our apology for the interruption.
Mr. Greenidge: Thank you very much Mr. Speaker. I know you have nothing to apologise for. These are parts for the courses, as it were. I was on the question of debt and raising a concern that one would have expected to see the Minister or one would like to see the Minister, since he has not done so far, provides some guidelines for the contracting of debt in future for especially the rate at which it is increasing is significant. May I just remind you, Mr. Speaker? Since this is an issue that the other side speaks a lot about, that the volume of debt contracted by this Government, in the last ten years, has exceeded the total volume of debt contracted by its two predecessors, the PNC as well as Dr. Jagan’s Government, so it is not something that is insignificant. There is a large amount of external indebtedness here and it needs to be noted that to the extent that the debts are spent upon activities, such as at Skeldon, which do not yield the return when they are supposed to yield them, and we will end up having to pay more taxes, including the VAT than we need to do. That is the importance of the point that is being made here.
In view of the time, I am going to perhaps be a bit eclectic in dealing with the other issues. Let me say that one of the areas that needed attention, and we would like to see a more detailed, a more care on it, has to do with the treatment of youth. Under the Government of the late Dr. Jagan as well as the PNC Government of the late Mr. Burnham the country was faced… I mentioned that because it is not a new problem, it is perennial problem but they had the initiative, both of them, to try and deal with the problem of the large and growing youth unemployment. In the case of Dr. Jagan, there was, of course, the Mahaica-Mahaicony-Abary (MMA) project which was a major effort to be made to tackle unemployment. Subsequently there was, of course, the question of the Youth Corp, Guyana National Service, MMA, for example, on the PNC side, to deal with the question of unemployment. We have no similar initiative of any import or of any worth in relation to the current budget before us at a time when there is the unemployment problem and it is probably even greater than it was in those times. I would urge the Government to have a look.
We, ourselves, had made a proposal. Again, when speaking to the Government, the President seems much interested in an initiative that we were proposing which would work on, first of all, on providing immediate employment, which would at the same time deal with the environmental decay that is taking place around us and it will combine it with the training for the young in relation to a range of skills in place, including entrepreneurial skills. This was a proposal. The President seemed responsive at the time. It seemed that we could have gone forward if we could have discussed the modalities. Nothing has happened. It seemed to have died a death. Elsewhere, countries faced by unemployment amongst youth of the same magnitude they are putting in place major measures, including measures for helping young people to get apprenticeship of any number. The point is that when these proposals, which the Minister mentioned, are looked at they are insignificant, relative to the numbers affected.
If I might jump to the question of old-age pensions, its arrangements, I think, are something of concern to us after discussing this, again, with the Government last year, and the Government, having indicated in a first instance that an interim payment would take it to $10,000, we are appalled to find one year later it cannot even see it fit to move to $15,000, at a time when revenue levels have increased substantial and significantly, when the moneys collected from the VAT, for example, are significant over the preceding year and yet, with resources available to it the Minister boasting about the size of the budget, there is this mean-spirited response to a major need, a major group that is challenged. If you look, Mr. Speaker, we were speaking in relation to VAT and the expenditure of moneys on basic items, the movement of prices for food and for medicines over the year 2012, as a whole, have gone up by a ten percentage point. This is more than the five per cent paid across the board to public sector workers.
The issue here is a very important one. We are saying that a variety of concerns have been raised. A number of issues, mentioned by the Minister, have not dealt adequately with the needs of the poor. I know that the Minister is going to cite what he is going to be proposing, in relation to water and electricity. The point is, in relation to those areas, that not all pensioners will benefit from them because of the way in which the arrangements have been set out, and that is going to be the problem there.
As regards of my final set of points, Guyana Sugar Corporation (GuySuCo) and the Guyana Power and Light (GPL), again, are emerging as a major factor here. I was at pains to point out the importance of institutional reform, the importance of organisational change and depoliticisation of our major corporations. This, again, was the subject of discussion with the Government. I am emphasising this because making suggestion to Government is almost as throwing water off a duck’s back. It ignores them. There are numbers in the Estimates that suggest that output levels would move positively and significantly from one year to the next. The point that I was making earlier, which seemed to have upset our colleagues on the other side, is this: To the extent, it only shows the numbers are increasing, but the factors that are supposed to enhance the output are not there. In other words, the investment levels do not seem to go in that direction.
The reform of the corporation is non-existent; depoliticisation is non-existent, which means no change is going to be effected. When the Minister comes to us and tells us that GuySuCo will only required $1 billion in transfer this year, we do not believe him, because he has already established a reputation for being in love specifically with the Contingencies Fund, so no sooner will we pass these votes then he will come back. The Auditor General, over the last six years at least, has drawn our attention to what I would regard as serial abuse of the Contingencies Fund, up to the year 2010. The 2010 Auditor General’s Report attests to that specific and therefore that is a matter that the Minister needs to address. We do not believe him; he is going to come back for more money.
The $11 billion to GPL, Mr. Prime Minister, in response to our demands for reform that will justify the moneys and to give us the assurance that the Government will not be asking for more money, gave us a - I do not know what to call it - a plan of some type. Here we are, a year later, it is asking for $11.2 billion, beyond the amount approved last year, which was $6 billion. We have here a black hole. The combined sugar and GPL are a black hole in which resources of taxpayers are being thumped and this is being taking place at the expense [Dr. Singh: Putting money… [inaudible]… is a black hole. ] Yes. It is a black hole because the only point in putting money there is if you are going to fix it and since you have made no attempt to fix it, in relation to GuySuCo, we are promised a plan.
Let me conclude… [Interruption from the Government Members.] I never mentioned sugar workers. Sugar workers are your problem if you believe that is the thing. The opportunity… [Interruption from the Government Members.] Well, you did not show any interest looking at the National Insurance Scheme (NIS) because up to now there has been no proposal. The President promised that the Government views on the NIS would be laid in this House by September of 2012. We have not seen them. Instead of fixing a board, which has given away a lot of investment income, we have just seen a transfer of $125 million to the NIS. That cannot fix the NIS.
Mr. Speaker, what I want to conclude is to say that the financial position of the Government has been quite favourable compares to previous years. That is the case now; that is my reading of the Minister.
In spite of this, the opportunity to fix management and political problems has been missed due to a political obsession about the no dialogue. The measures demonstrate political denial and the ignoring of public concerns, in the areas such as corruption, which, in fact, is getting worse, and nepotism especially, as reflected in the story of the frequencies, is again getting worse. I am not going to call any names but the Members on the Government side know who I am talking about. The programme allocates resources primarily to the privileged few and if the allocation of capital expenditure is looked at one will see a dramatic reduction in the quantity of resources made available to agriculture, no logic, but yet it is doing better this year. I do not know whether the Members on the Government side have noticed, but I notice that they are not shouting now.
There is the Transport and Harbours Department which is cut drastically at a time when it has major vessels that seem to have high operating cost.
There are a number of issues here and the point is that the budget has been framed in relatively easy financial circumstances but the measures, especially the relief provided to the poor and vulnerable, are far less than the figures suggest we could afford, especially when compared to the sweeteners provided by the Government to their friends and cronies. There is a certain meanness of spirit underlying the proposals which the Minister of Finance has tried to hide by various tricks and sleight of hand, what, in the fairground in England, is called smoke and mirrors.
Thank you very much Mr. Speaker. [Applause]
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