Budget Speech - Mrs Hughes—20143653 04 Sep, 2014
Mrs. Hughes: Mr. Speaker, Members of this most honourable House, I am excited at the opportunity I have to add my comments to this Budget 2014 debate. I want to start by complimenting the Hon. Minister of Finance on the presentation of these estimates.
I know the Hon. Minister of Finance may find my words surprising. As possibly, he, like many, assumed that we, on this side of Opposition benches, of the House, have no other goal than to obstruct the work of Government, bringing the dreaded “scissors” to the floor of this House. I say to you, Minister, that we are so much more than that and, believe it or not, this is our country too and we therefore have the best for it at our hearts.
Budget 2014 is a good start in many areas but I want to remind us that we, in this House, are here to bring the hopes and aspirations of all Guyanese into these hallowed walls and to mould and fashion their dreams into a system that shares the wealth this nation with all Guyanese regardless political persuasion, ethnicity, religious affiliation or where they are on the social economic ladder.
My question is, how do we measure development? Is it the economic growth indicators that are shoved down our throats on the National Communications Network (NCN)? Is it the homeless, the mentally ill, street children and the many others mushrooming on our roads, the young women and men hustling to sell a bottle of water, a patty, a hot dog, clothing, shoes? Everybody, all of them, is trying to make an extra dollar to make ends meet. I ask, what this budget has done for them? The six hundred and twenty five additional dollars our pensioners will receive will not cover the cost of the grill work they now need to install in their homes to protect themselves in this new Guyana. This could not be more visible than in the recent attacks on two pensioners who unfortunately lost their lives.
Although we are happy to give credit where it is due, I would ask more of us, on the other side of this House, to drive around, maybe, with our windows down or remove the tint which possibly darkens the reality of what is Guyana today. I say a better Guyana for all Guyanese must mean a plethora of new jobs especially for our young people and not a few scattered here and there as we have seen in this budget. We acknowledge that we have had growth, but whom or what has grown? Have we had development? What is the face of development in Guyana?
Our Constitution is the foundation of Guyana’s political system and speaks of creating that illusive… I quote:
“…inclusionary democracy by providing increasing opportunities for the participation of citizens, and their organisations in the management and decision-making processes of the State, with particular emphasis on those areas of decision-making that directly affect their well-being.”
Well, Mr. Speaker, although my party and the thousands out there, who we represent, have not been consulted on this all important financial plan I have decided not to pout, shout and pack my bags and say, “I done play”, but rather, I hope to present a few important suggestions from, let us say, my own AFC budget, for your consideration. I am well aware that this is your budget but I remind you this is our country too. I hope that the egos will be put aside, at least for a few days, and that all worthwhile recommendations will be given the opportunity to be heard and considered in these rooms. No one party has a monopoly on policy initiatives for the various sectors or the best recommendations to produce growth and development with a human face.
My good friend and the most Hon. Minister of Tourism, Industry & Commerce, Minister Irfaan Ali, a few days ago talked of everyone being consulted and asked that we present an alternative budget. Well, I want to say that this lowly woman is more than happy to take up the challenge of this goodly gentleman, and so, Mr. Ali, here are a few of my recommendations for your Ministry – the Ministry of Tourism, Industry & Commerce.
The tourism sector in Guyana has always been dear to my heart and as a Member of this sector, for more than 20 years, I know the unrealised potential that this sector holds for truly transforming Guyana and moving into non-traditional revenue streams that can boost its economy. In fact, one of my first meetings with the Hon. Minister of Finance was in the mid-1990s, yes, decades ago, when as President of the Tourism and Hospitality Association of Guyana I headed a delegation of members to present, as is done every year, a case for concessions to spur the development of Guyana’s tourism industry. Today, 20 years later, most of those recommendations of the private sector members of this industry have been totally ignored and meagre gains are shouted from every rooftop, totally ignoring that we should have been further along the road to truly developing this industry.
In my examination of this budget, I want to examine where we could have done better and where we can put more money in the pockets of average Guyanese.
It starts with the organisation of the Ministry of Tourism, Industry and Commerce itself. How could such a sector, with all this potential, be lumped with other major sectors such as industry and commerce? How can we expect the international marketplace to take us seriously when initiatives to move this sector forward have been put on the back-burner for decades? The need for an autonomous Ministry of Tourism is overwhelming.
Tourism is one of the fastest growing industries worldwide and can provide high levels of job creation through training, which can occur in a short space of time in this industry, once there is a realistic budget and a strategic marketing plan exist to drive visitor arrivals to the country. Unfortunately, an adequate budget and the comprehensive marketing plan, which is a function that should be in the budget, do not exist.
On the point of training, I must say that the announcement finally of funding for a hospitality training institution is one which we applaud. For over two decades, stakeholders in the industry have highlighted the need for hospitality training as a means of improving standards and quality. The suggestion has always been made that the mandate of the Carnegie School of Home Economics be expanded and be given the requisite funding to play such a role. Mr. Speaker and the Hon. Minister, I hope we will build on what we have.
On this point I wish to observe that the Minister of Finance, in presenting his budget, spoke of making a US$4 million investment for the establishment of a hospitality institute. We note that $55 million has been included under the capital expenditures of the Ministry of Education, as I quote, “Provision for a hospitality institute and provision for institutional strengthening – CDB.” Of this amount, only $5 million appears to be local funding and $50 million appears to be coming from the Caribbean Development Bank (CDB). I hope the Minister will clarify this.
“Impact,” the word from a few days ago - yes, “impact.” The Hon. Minister of Tourism, in his usual robust manner, was absolutely correct. What is the impact of all our efforts to date when it comes to the development of a tourism industry? What has hindered more rapid growth? I propose to list a few and each of these are areas in which your Government, our Government, could have allocated more in this Budget 2014 to push the sustainable development of our tourism industry.
Mr. Speaker, you and many in this room, may be unaware that in several Caribbean Tourism destinations and elsewhere in the world governments have allowed the tourism and hospitality sector to pay a lower rate of Value Added Tax (VAT) than the standard rate. In the Bahamas, the standard VAT rate is 15% but for its tourism sector it is 10%. In Barbados, the rate is 17.5 % and is reduced in its tourism sector to 7.5 %. Similarly, in Dominica, the rate is 15% but reduced to 10% for the tourism sector. In Jamaica, it goes even further, the rate is 16.5% but it has actually created a special rate of 10% VAT for the tourism and hospitality sector plus an accommodation room tax which is dependent on the number of rooms a particular establishment has.
The private sector in Guyana lobbied hard for such a tiered approach, long before the implementation of the Value Added Tax (VAT). Today, the tourism industry is still a relatively new and emerging industry, in terms of growth, and is still heavily taxed like so many other sectors.
The challenge for us Guyanese is that other destinations have granted preferential VAT treatment to their tourism product which makes our product, now, more expensive in the marketplace and therefore we need to do the same to compete with other destinations. Hon. Minister, we in the AFC would recommend that you implement a reduced rate of VAT for the tourism sector and give the industry a jump start.
At present, in the tourism sector there are two tiers in the structure of granting incentives, with tourism businesses in the interior locations being eligible for a wider range of incentives than those in Georgetown. This has created a playing field that is no way level. I would be the first to state that I am excited with the development, the growth and the progress made in ecotourism resorts, at lodges and community tourism programmes in places such as Surama and their commitment to improving standards and quality, but I think that it is necessary, and only, fair that these incentives be given across the board to all participants in this industry.
The plight of the small hotels is very similar. For years the incentive programme for hotels in Georgetown, where the majority of hotels can still be found, has only been available only to properties with 15 or more rooms. Although this may look reasonable on face value, it is necessary to note that of the 3,500 hotel rooms currently in existence the two largest Georgetown based hotels account for no more than 320 rooms of the total. These incentives, therefore, lock out more that 50% of those in the accommodation sector. We are all aware of special Government funded programmes to brand small hotel in markets in places such as Barbados and St. Lucia. Such an approach is necessary in Guyana.
We should be celebrating that our accommodation sector and tourism providers are, for the most part, owned and operated by proud and hard-working Guyanese committed to staying here and investing at home, but the current incentive regime discriminates against them, giving them no supporting hand to facilitate expansion. The cost of the various licences to operate a tourism related business are the same as if there is a twelve-room or one hundred-room and if the person is a foreigner that person is more than likely to receive more tax breaks than a Guyanese counterparts. In my budget, therefore, an incentive would be make available to all.
A 4x4 vehicle is a necessity for any tour operator or resort in our interior locations to do the job. It is not a luxury. In Guyana, our tourism incentive package provides duty-free concessions on pickup trucks in this sector which are wholly inadequate for transporting groups of tourists for long hours across dusty dirt roads no matter how beautiful the terrain maybe. The near 300% duty placed on 4x4 vehicles has made acquisition impossible for legitimate tourism businesses. The result is that over the years, the unavailability of suitable transportation in interior locations has been a key criticism expressed at the end of many familiarisation trips organised by the Ministry, by the private sector or even by the United States Agency for International Development (USAID) funded Guyana Trade and Investment Support (GTIS) programme. Surely, we can devise a system to assess the bona fides of potential applicant. This is just another concession for the tourism industry that needs to be considered.
More than 20 years ago the then Tourism and Hospitality Association of Guyana lobbied hard for the development of a Guyana Tourism Authority (GTA). In fact, it was this private sector organisation that initiated contact with the Organisation of American States (OAS) and with support from the former Minister of Tourism, Industry and Commerce, Minister Shree Chand, organised a consultancy to examine Guyana’s tourism potential which conducted intensive discussions with stakeholders on the formulation of what would be the Guyana Tourism Authority. I know that the Hon. Minister of Tourism, Industry and Commerce was, probably, still in primary school at that time, and, yes I am, certainly, showing my age.
The Hon. Minister of Tourism, Industry and Commerce has advised me that the Guyana Tourism Authority recorded 200,122 visitors in 2013. We compliment that but I want to say that, regretfully, inadequate financing, year after year, has meant that Guyana has failed to implement a comprehensive destination marketing plan which is fundamental to moving any tourism industry forward. We continue to wallow in the dream of the potential this sector can offer. This single fact can be interpreted as a failure to understand that this sector contributes, approximately, and this is according the Guyana Investment Tourism Guide, $237 million to Guyana’s Gross Domestic Product (GDP) while contributing $190 million in value added tax revenues. Compare this to the funds given to the industry. May I suggest, therefore, that in this budget, we need to allocate more funds to accurately calculate the contribution of the tourism industry to the GDP.
Mr. Minister, please add, to my budget, funds for proper marketing plan and if our dear Minister of Finance would like to suggest that there is no money for this, we, in the AFC, would like to suggest that the Ministry use the funds from the departure tax to fund such a campaign as was promised many years ago to the industry. The issue here is of allocating limited resources to best use and with a few local hotels up for sale and legitimate hotels experiencing low occupancy rates I question his figure of 76% occupancy rate across the industry.
At this point I would like to reiterate that Government had no right to take funds from our national reserves to build another hotel for a team of foreigners to manage. That should have been left to the private sector. Yes, money from National Industrial & Commercial Industry Ltd. (NICIL) belongs to the people of Guyana and should be reflected in this budget as revenues.
Destination Guyana is indeed a well kept secret but that works against us. One of the biggest challenges we face is that those with the disposable income that can come and enjoy our tourism product which is slightly more expensive, do not know where we are. The $58 million spent on the Marriott Hotel, which brought us no jobs in the construction process, could have been used to fund a more than adequate advertising campaign with spots on some of the world most popular cable networks.
We are grateful for the free coverage we get through the numerous British Broadcasting Corporation (BBC) and other programmes, including and documentaries, all very well produced, and series such as Gold Rush, but we will only be successful when we specifically examine who we are going to targeting, how and what are the best ways to target them and how we are going to get them to buy a ticket and jump on a plane and visit our most beautiful country. Instead “marketing Guyana”, for too long has been going to the same old locations and events held in the North America targeting a diaspora which need to see some damage control messages as every day stories of crime and attacks on returning Guyanese seem to be scaring away some of them away.
I applaud the efforts to clean up the City of Georgetown and that is very important for our tourism product, but I would like to say that the best long term solution for this crisis could only be the holding of Local Government Elections urgently.
Time does not allow me to focus on the need for zoning enforcement as our tourism industry competes with other extractive industries for the same space, or the issue on our streets where hotels have been invaded by parked containers, garlic and potato or scrap iron businesses next door. These are areas of concern affecting the industry.
Equally important is the maintenance of our historical buildings, formerly a site to behold but which are now falling down, like the City Hall, which we know will not be repaired because of an ongoing political war. It is against this background that we observe that our National Trust receives a mere $54.4 million next to the Government Information Agency’s (GINA’s) $139 million.
The power of the arts and its value for society: art is what makes a society from an economy. It builds communities, focusing the attention on the intangible but essential and celebrates beauty. Art nurtures passion and feelings; it enhances our daily lives and it enriches our relationships and is how one can tell that building an economy is worthwhile. I know the Hon. Minister of Culture, Youth and Sport will understand that.
In an effort to ensure that we value this most transformative of disciplines, I now speak to disintegration of Guyana’s foremost theatrical institution and, quite possibly, the most prolific in terms of output since its resuscitation during Carifesta and most definitely the most prolific in the identification and training of new talent in Guyana. The Theatre Guild, a non-profit organisation run by volunteers, gets a paltry $750,000 a year as a subvention. Carifesta saw the Guild being used as one of the venues for which it is still to receive payment which led to the accumulation of some $14 million in debt to the Guyana Power and Light (GPL) Inc. The Guild is listed as an industrial entity and its electricity bill starts at a mandatory $300,000 every month across the board, regardless of if a light is switched on or if energy is consumed. I use this as an example to show the realities of some of our cultural organisations.
In a recent letter to the Opposition parties, the Theatre Guild requested that this matter be brought before this august House for consideration. I am going to take this opportunity to quote some of the contents of the letter.
“To put the matter succinctly, the Playhouse has been saddled with a past due electricity bill of some $14 million Guyana dollars most of which was essentially racked up by hosting several official events during the Carifesta period, for which the Guild was not paid by the Government.
We have been negotiating with Guyana Power & Light Inc. to honour this debt but have found the reduction of this onerous amount a drain on our meagre resources. As you know the Guild is not a for profit organisation which is run completely by a group of volunteers.
In light of the proposed allocation to the energy, power generation and supply sector of $7.7 billion, as announced by the Hon. Minister of Finance in the budget speech on March 24th 2014, we the Executive of the Theatre Guild are asking that you support our request that he amends that amount to include the $14 million that has accumulated starting with the non-payment of amounts owed to the Theatre Guild during Carifesta.
We know that the powers vested in you in the Committee of Supply can be used to suggest amendments of allocations to this sector. This particular amendment would effectively remove this millstone from around the neck of this historic and most important oasis of the creative industries.”
To the Hon. Minister of Culture, I say, let us urgently find a solution to the plight of Theatre Guild. After all, it contradicts all you have said on the value given to the expansion and promotion of the arts.
In light of this, I must now respond to the Hon. Member Bibi Shadick who made the claim that the Theatre Guild charges more than the National Cultural Centre (NCC) for the use of the facility. Our information must be coming from different sources because, according to my research, this is not at all the case. By comparison, the National Cultural Centre and the Theatre Guild are two completely different spaces in terms of size, but should we compare, we would have to use the costs charged for use of the small space at the NCC which seats 500. The Theatre Guild seats 300. The National Cultural Centre charges $110,000 for the use of the entire space which seats 1,975 and is budgeted to receive some $45 million in the current forecast, which I have absolutely no problem with. The National Cultural Centre charges $40,000 for the use of the 500-seat space with an additional charge of $30,000 for technical rehearsals, effectively $70,000 per night, and an additional 20% of the ticket sales. So, on average, should a person sell tickets for $1,000 and sell 300 seats, the amount that he or she would pay would be an additional $60,000 per night, bringing the total for a three-night production to $250,000. A three-night production at the Theatre Guild inclusive of all those services would be $157,500, definitely much less.
The Board of the Guild decided recently that unless this situation changes, it would have to consider increasing the amount it charges for its facilities. I would ask anybody to look in the newspapers and they would see the kinds of events that take place at the Theatre Guild. It is all school events and church events. A range of non-governmental organisations are benefitting from the existence of the Guild.
I want to go quickly to the Information Communication and Technology (ICT) sector. The Minister of Finance took just a few minutes short of a three-hour debate to regale this House with his Government’s dreams and, in so doing, stated:
“Recognising the importance of ICT to our modernisation efforts, Government will continue to invest in the sector. The sum of $1.1 billion is budgeted in 2014 for the completion of works under the e-Government project, which includes the completion of 13 additional LTE-A towers. The OLPF initiative will be relaunched and reinvigorated, and will benefit from a budgeted $2 billion...”
Those are very lofty statements. They sound good. They look good on paper. But ICT is not just about running cables, putting up towers and distributing laptops. It is about making information available and we cannot help but wonder who is going to benefit from the billions of dollars ICT contracts in the absence of the Public Procurement Commission (PPC).
The 2012 Auditor General’s Report, on page 28, shows that a difference of $1.252 billion was expended under the One Laptop Per Family (OLPF) programme for the acquisition of 27,000 laptops, which were received in 2013. At the end of the audit, 4,149 of those laptops were issued but, more remarkably, 2,649 were damaged, and 2,011 were returned to the supplier due to defects. In addition, we are yet to hear the final take of the 103 laptops that were stolen. Now, this Government is asking us to approve $2 billion for more laptops. The Alliance For Change (AFC) fully supports every school, not only secondary schools, having additional Information Technology (IT) labs but the rate at which these laptops are being damaged, even before they get to the people, leaves a lot to be desired. And while we look at laptops for every home and every school, what is the plan for the students of the University of Guyana (UG)? We feel that consideration, too, should be given to ensure that they, too, get laptops.
Mr. Speaker and Hon. Members, I want to turn to the issue of Public Service Broadcasting. Public Service Broadcasting, according to the United Nations Educational, Scientific and Cultural Organisation’s (UNESCO) definition is:
“Public Service Broadcasting (PBS) is broadcasting made, financed and controlled by the public for the public. It is neither commercial nor state owned, free from political interference and pressures from commercial sources. Through PBS, citizens are informed, educated and also entertained. When guaranteed with pluralism, programming diversity, editorial independence, appropriate funding accountability and transparency, public service broadcasting can serve as a cornerstone of democracy.”
Well, Mr. Speaker, we all know that democracy only came to Guyana on 5th October, 1992 – the dawn of a new era – but somehow it escaped the operations of the National Communications Network (NCN).
Budget 2014 sets aside $81 million for the National Communications Network and $139 million for the Government Information Agency. That is a total of $220 million of taxpayers’ money that this Government has set aside to promote itself.
Mr. Speaker: Hon. Member, your time is up. You will need an extension.
Mr. Ramjattan: I ask that the Hon. Member be given 15 minutes to continue.
Question put, and agreed to.
Mrs. Hughes: That is a lot of tax dollars for “bare talk”. Not only is it “bare talks”, but it is “bare PPP talk”. I say this because everyone knows that the only group that can secure airtime on NCN is the Government and I have several letters in a file, as far back as 2005, to support this.
No one really knows what GINA does and how whatever it does is supposed to benefit the people of Guyana, but the people are being asked to give $139 million to GINA. What is it to do, Mr. Speaker? Is it to write letters to the Editor and those GINA press releases?
While this Government plans to spend $220 million tax dollars on GINA and NCN to promote itself, imagine, our main agency for attracting investment to this country – the Guyana Office for Investment (GO-Invest) – is to receive, by comparison, only $119,781,000, approximately $20 million less than GINA, and that is the agency tasked with promoting investment in Guyana. Therein lies the problem. How can this House be asked to approve $220 million for NCN and GINA when we have waited patiently for two years to see some change in the mandate and focus of these entities? If they operate as public service broadcasting entities then, yes, the public and all of us on the Opposition benches will be happy to approve the use of the public’s money for this. But, if they remain propaganda agencies of the PPP/C, then we say no problem. Let the PPP/C pay for this as none of the Opposition parties in this House have asked the Government to pay or use Guyana’s tax dollars to pay for their in house public relations campaigns. No, Sir, this could never be right.
Non-governmental organisations (NGOs) that are actually walking the walk and helping abused women and children to put their lives together, centres that are helping drug addicts to get over their addiction and homes for orphans and neglected children are all receiving paltry sums. I say that 50% of this allocation the Government has put for “talk” would be better used if given to these institutions. It would have more of an impact on improving the lives of average Guyanese.
At a bare minimum, NCN does not even offer the Opposition, which does represent a section of our population, a right of reply which is recognised internationally as fundamental. Now, in addition to the $220 million that the Government has allocated to blow its own trumpet, another $43.2 million is to be paid as fees at the rate of $3.6 million per month to Television Guyana (TVG) for services provided for the Learning Channel.
Let me, at this stage, compliment the Learning Channel on the role it is playing in educating Guyana’s youth, especially those in the hinterland regions. But while the Government is providing $81 million of taxpayers’ money to NCN, we note that none of that money is being used to broadcast learning material. The Government plans to take an additional $43.2 million and pay it to TVG to carry educational material. I know the Government will counter and claim that NCN lacks to capacity to carry the Learning Channel, but we want to ask: why, after spending billions of taxpayer’s money over the last 22 years, does NCN not have the capacity to carry the Learning Channel? Where did the money go? Was it deposited into private accounts like the payment from the Guyana Telephone and Telegraph (GT&T) Company which seems to have been swept under the carpet and for which no charges have been brought? Then, there is that report on irregularities at NCN that the Hon. President of Guyana promised. I hope it is coming soon and not as the Jamaicans would say “soon come”, which the Hon. Member Bibi Shadick so aptly defined for us yesterday. We wait patiently.
Mr. Speaker, we want you and this House to understand that we are not vengeful when it comes to NCN, but it has to do with the abuse of a public entity for partisan benefit. It is the watchdog function of this House to guard against such abuses.
On this issue, I would like to close with the statement of the most Hon. Minister of Home Affairs, Mr. Clement Rohee, which appeared in the Guyana Chronicle of Wednesday, 12th February, 2014, on page 2, under the caption, “Rohee charges Stabroek News with biased coverage.” Therein, the Hon. Minister stated:
“...all media houses have a duty to be responsible in providing balanced coverage of the political views”.
Minister Rohee, you are absolutely correct and I would ask you to share this concept with your friends at GINA and NCN.
With all that I have said, I recognise that this Budget is the Governments’ Budget and I respect that, and, since we can only approve or disapprove, I hope that the Minister of Finance might come again with revisions, based on the suggestions we have heard in the days since we started this Budget debate, and, more importantly, in the days to come. At the end of every day, we all know that Guyana belongs to all of us and all the parties in this House are committed to her good development.
Thank you very much. [Applause]
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