BUDGET SPEECH 2018 - Honourable Mr. Winston D. Jordan , M.P. Minister of Finance2070 27 Nov, 2017
Mr. Speaker, I rise to move the motion for the approval of the Estimates of the Public Sector and the Budget for the Financial Year 2018 and, in doing so, I wish to indicate that Cabinet has recommended that the National Assembly proceed upon this motion, pursuant to Article 171, Paragraph 2, of the Constitution of the Co-operative Republic of Guyana.
Mr. Speaker, it pleases me greatly to be able to deliver Budget 2018, the fourth of six budgets that this Government is expected to present, in this House, during its first term. This fourth budget is being presented at the middle of this Government's first term in Office. Indeed, it was approximately two and one-half years ago, when the people of this great country of ours gave a mandate to a coalition of two parties – A Partnership for National Unity (APNU) and Alliance for Change (AFC) – to harness the energies and resources of our citizens to generate a popular platform for change in government and governance. Importantly, the two parties expressed an abiding wish to become "a change agent for healing and reconciliation", in recognition of the role that conflict and strife have played in destabilizing race relations. This has had devastating consequences on the psyche of our people, which has left us being "distrustful, disrespectful and disdainful of each other," according to the Joint Manifesto of the Coalition.
Mr. Speaker, we were never in doubt about the enormity of the task which lay ahead. We were in a hurry to rebuild a country that was marred and scarred by poor and corrupted governance under the PPP/C. We had to restore hope, inspire confidence and shape a new destiny for our country and our people. The Government was challenged to provide strong leadership to bring about development that was inclusive and environmentally-sustainable. In a situation where the economy's growth trajectory depended on the primary stage production of the agriculture and mining sectors, we were challenged to change the narrative and to develop an economy that was more broad-based and diversified. In our previous three budgets, we set the stage for our
economy to produce higher national incomes, which, in turn, would help to lift families out of absolute poverty and closer to enjoying the Good Life.
Alas, Mr. Speaker, there have been many setbacks and roadblocks that have impeded greater progress. From being confronted with a bankrupt Guyana Sugar Corporation (GuySuCo) and the sudden termination of the premium market for rice, to difficulties with our Western neighbour over the border and the non-cooperative stance of the main opposition party, the Government has had to deal with more than its fair share of problems. Rather than being daunted by, and becoming frustrated with these obstacles, we have stayed the course, keeping our goal to build a better, more inclusive and unified society in sight.
Mr. Speaker, our mid-year report card shows that we are making steady progress on the promises we made in our Manifesto. The successes and accomplishments have been many – too numerous to enumerate here. However, I would like to share some of them with you:
- We have kept the economy growing at an average of 3 percent, between 2015-2017. This was achieved at a time when most of our neighbours have been facing economic and financial crises, with low, no or negative growth rates and reduced standards of living. In the words of the Caribbean Development Bank's (CDB) Director of Economics, "the future of Guyana is quite bright".
- Within the short period of 18 months, between July 1, 2015-January 1, 2017, we increased the minimum wage by over 50 percent. At the same time, we increased the income tax threshold by a minimum 20 percent, reduced the marginal income tax rate to 28 percent and removed the tax from employees' contribution to the National Insurance Scheme (NIS).
- During the same period, we increased old age pensions by 45 percent and public assistance by 27 percent.
- We reduced the marginal rate of the Value Added Tax (VAT) to 14 percent, increased the VAT threshold to $15 million from $10 million and increased the number and range of items that are exempted from VAT.
- Further, we reduced the marginal rate of income tax for non-commercial companies to 27.5 percent from 30 percent.
- We have maintained a manageable debt-to-gross domestic product (GDP) ratio, well within the internationally-accepted limit for countries at our level of development. At 45.2 percent of GDP, Guyana has one of the lowest debt ratios in the Caribbean, a fact recognised by the CDB, which has commended the Government for fiscal consolidation and prudent debt management.
- Contrary to what is being pedalled by our detractors, the net foreign assets
- position has increased from US$611 million in May 2015 to a projected US$613 million at the end-2017, while inflation has been kept in check.
- We established the Public Procurement Commission and the State Assets
- Recovery Agency, and re-constituted the Public Service Appellate Tribunal, after a hiatus of many years.
- Importantly, democracy at the local level has been restored with the holding of Local Government Elections, after an absence of 22 years, and the establishment of the Local Government Commission.
Mr. Speaker, these are just some of the impressive achievements and successes that we have recorded since coming to Office. To quote the Carpenters, "We've only just begun ..." We've only just begun to experience and feel the excitement of a Government working for the people, delivering on its promises and making significant progress. But, Mr. Speaker, even as we enjoy our successes and celebrate our achievements, let me recall a few potent lines from one of Robert Frost's poems, "But I have promises to keep, and miles to go before I sleep." These poignant words are a reminder of the work still to be done. Reflecting on this, the theme of Budget 2018 is, The Journey to the Good Life Continues. It signifies an awareness of the road travelled so far and our accomplishments. Equally, it symbolises a work in progress, a road still to be travelled, a journey unfinished.
Mr. Speaker, Budget 2018 is about the Government continuing to rise to the challenges, and fostering the conditions and creating the opportunities for renewal and expansion in the economy, in order to secure the Good Life in the future. As a result,
Budget 2018 focuses on a number of strategic actions, including: consolidating the macroeconomic fundamentals; fostering higher growth for more and better jobs; improving the quality of life of our people; investing in skills development; investing massively in infrastructure; doing more to facilitate business; stimulating growth and employment in the productive sectors; and supporting micro, small and medium enterprises; among others.
Mr. Speaker, our citizens want to own green jungles bursting with life and biodiversity, as well as modern urban structures; they want to be able to see the stars in the sky at night not filtered by smog; they wish to travel to work, school, home, and play without being stuck for hours in traffic jams or having to take days to get there; our citizens want good education, quality health care, fresh foods, their own homes, safe communities and towns, fair and efficient systems, and value for money on their tax dollars. Budget 2018 aims to deliver all of these improvements as we invite every Guyanese to create an inclusive path as the Journey to the Good Life Continues.
Mr. Speaker, in addition to the traditional organisations, which are usually invited, as has become customary, the pre-budget consultation exercise was expanded, this year, to include a group of young, dynamic entrepreneurs, among others. My interaction with these groups re-assured me that our country's future is secure. I also want to thank the GMSA for ensuring frank and productive discussions in the on-going Inter-ministerial – GMSA engagement. This has resulted in several government interventions and has fostered a healthy working relationship between the government and the private sector. We anticipate that this will continue, and will ultimately lead to, and drive growth in the manufacturing and services sector.
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