Minister of Business, Budget 2016 Speech1092 08 Feb, 2016
Mr. Speaker, with your leave I wish to speak in support of a budget which, from all accounts has raised the spirits of the Guyanese people.
This budget has also raised the bar and set a new standard for effective public spending. The good life beckons and, with the exception, of a small disgruntled minority, the Guyanese people recognize it.
Mr. Speaker the theme of this year’s budget is most appropriate for a nation in our particular circumstances. Our G$52B Capital budget will pump life into our economy as it rolls out an infrastructure agenda that has been prioritized by our Government.
This will give it the stimulus it needs to spur investment and growth.
Our second budget in less than six months demonstrates a capacity to govern that will give confidence to investors contemplating the Guyanese economy.
Mr. Speaker investor confidence is critical. Our economy cannot grow and develop without the confidence of the businesses whose investments we rely on.
Fortunately that confidence is growing because we now have a Government that understands this and is signaling to investors that Guyana is a clean, wholesome and profitable place to do business.
On this score I was expecting to hear glowing praise from the Hon. Member who spoke before me since 6 months ago in this very house he was the one griping that Budget 2015 had failed to address the issue of confidence.
This G$231B budget is bigger than any we have ever had before and it is focused on making life better for the people of Guyana. It provides for the funding of a number of budget agencies to carry out the programmes of our Government.
These programmes are designed to keep the promises made to the Guyanese people in the APNU-AFC Coalition Manifesto.
Mr. Speaker, I know that in the past it has been the practice to bury one’s manifesto after the election and hope that no one ever picked it up again.
Because anyone who did would have discovered a wide variance between what was promised and what was delivered.
But we in the APNU-AFC Coalition intend to ambitiously pursue the promises made in our manifesto and our budgets during our term in office will reflect this.
Budget 2016 projects tax revenues of G$150B and other current revenues of G$23B leaving us with a deficit of 4.7% of our GDP which is well within the range of acceptable fiscal deficit levels globally.
However, Mr. Speaker these tax revenues depend heavily on private sector investments. Therefore, Mr. Speaker, the work of the Ministries and agencies that support and regulate private enterprise is important for Guyana’s economic well-being and these entities need to be properly funded.
Mr. Speaker the Ministry of Business is one such entity and Budget 2016 provides the financial resources for us to strategically achieve the goals that we have set for contributing to the improvement of Guyana’s economy.
The Ministry of Business is responsible for a number of agencies and departments which combined will support the development of a strong, vibrant and competitive private sector that operates at all levels and in all communities.
The total amount appropriated for the Ministry of Business and its subvention agencies in 2016 is G$1,215,817,000.
Of this amount, Mr. Speaker, our current expenditures are estimated at G$668,564,000 and our Capital budget totals G$547,253,000.
It is important that the people of our country understand the huge sums of money that are required to run a country and to develop a country. It is important that the people understand how their tax dollars are being spent.
I’d like to touch on our Capital Budget to show how and why we plan to spend almost G$550M this year.
First of all Mr. Speaker, we need to do something about Guyana’s industrial estates. G$212M has been allocated for developing and fixing our industrial estates in 2016.
There are two new sites, one in Lethem Region 9, which, once completed will be able to accommodate at least 100 businesses and another one in Belvedere, Region 6 which is smaller and has space for about 20 businesses.
These projects have been languishing in the pipeline for well over a decade and our Government will complete them so that appropriate workspace can be provided for investors in value-added industries who have the potential for export.
Once completed, the Ministry of Business will assume responsibility for these estates and will not allow them to degenerate into replicas of the badly administered Eccles and Coldigen models.
The Coldigen estate will also have to undergo major capital works as a result of years of neglect. Two new bridges will have to be built to provide access for the heavy duty vehicles that transport materials and goods to and from businesses operating on the site.
Proper regulation and management of all of these estates will become a priority so that they are sustainable over the long-term and that our economy actually benefits from the investments that Government makes in developing them.
The terms and conditions of many of the leases in our industrial estates are not being observed and this has been the position for some time now, with the previous administration turning a blind eye to what has been taking place.
Our Government will regularize the use of these sites and ensure that future allocations of space are made in a transparent and fair manner.
Mr. Speaker, the development of lands to be utilized for value-added economic activities is critical if we want to encourage and expand secondary productivity and support new and employment opportunities for the people of Guyana.
This is what we promised the people of Guyana when we wrote into the APNU/AFC Coalition Manifesto that we would manage the economy in such a way as to produce more entrepreneurial and job opportunities and more equitable outcomes so that our entire population and not just a small elite can enjoy the good life.
This is precisely what we are doing in relation to the use of our industrial estates and we anticipate that by the end of next year these estates combined would have created some 1,500 new jobs, a figure expected to increase as occupancy increases over the years.
The Ministry of Business’ Capital Budget also allows for the completion of some projects begun by the previous administration under the title Rural Enteprise Development.
Mr. Speaker, we were forced last year to put a hold on these projects so that we could have them reviewed. And as a result we’ve made some modifications and will complete three of the four projects that were begun under the heading of Rural Enterprise Development back in 2014 – by the previous Government.
These projects initially comprised the construction of two call centres, one in Tuschen and one in Enmore, and a two chip factories, one in wakenham and one in Leguan.
We are unable to proceed with the chip factory in Wakenham which was built on land that was deemed by the Sea Defence Board to be prone to flooding and erosion and therefore poses a risk to the entire operation.
The building in Leguan was constructed with no consideration for how either a person or a plantain could get from the main roadway into the factory when it became operational.
It therefore required an additional contract for a road and a bridge to enable access to the premises. This will be completed by our Government so that within the first half of 2016 the factory can become operational and provide some benefit to the community in which it is located.
The call centres also need to be completed and operationalized and we will make the necessary investments in order to make these facilities ready and attractive to potential operators.
Budget 2016 provides G$195M for the remaining works on these Rural Enterprise Development projects and will allow us to complete them all by June of this year.
Potentially they can create more than six hundred jobs all together and impact positively on the rural communities in which they are located.
Mr. Speaker, our National Exhibition Centre in Sophia is in desperate need of an upgrade and the G$55M budgeted for works in the compound will provide a new stage, a trestle, drains and an almost brand new main building.
These could be ready for use for GuyExpo 2016 in May of this year possibly saving millions of dollars in tent rentals. The improved site will allow that facility to be better utilized throughout the year and to earn revenues for our government.
Mr. Speaker, the Guyana National Bureau of Standards has a valuable role to play in developing and promoting the use of standards in business.
Standards are import tools for business development and product development and the Bureau will need to build a strong partnership with the private sector in order to provide relevant standards for expanding industries.
Budget 2016 will allocate a $35M Capital budget to the Guyana National Bureau of Standards which will enhance their capacity serve our industries.
These funds will be used to purchase accessories for a hydrostatic pump that was purchased a few years ago and has never been used because it lacked the necessary accessories.
The device will be used for testing PVC pipes to determine the amount of pressure that they can withstand without bursting.
Mr. Speaker, our Government understands the importance of independent testing of critical products such as the pipes through which our people and our businesses receive water on their premises.
G$9M has been budgeted to purchase these accessories this year, and more will be requested next year so that this device can be fully functional.
The Bureau’s capital budget will also fund the acquisition of a state of the art gold testing device. The amount budgeted for this is G$11M and with the Bureau’s plans to monitor the jewellery industry for compliance with the Caricom Standard – Specification for gold articles, this testing device will allow instant non-destructive verification of the gold content of items of jewellery.
Mr. Speaker, this investment will therefore provide much needed support to the technical regulation that has made it mandatory for jewellers and goldsmiths to comply with this Caricom standard.
The use of X-ray fluorescence technology will significantly improve efficiency and effectiveness in monitoring the industry when compared with the Bureau’s currently used testing methods.
Additionally, the Bureau will be replacing one of its unserviceable vehicles this year with a four-wheel drive, double-cab pick-up truck.
This will cost G$8M and will increase the mobility of the Bureau so that it can promote the use of standards to more businesses in Guyana.
The work of the Small Business Bureau will also improve with the upgrade of its stock of office equipment. $2M will be spent this year on acquiring new computers and communication equipment.
Mr. Speaker for the first time since its establishment almost a decade ago, the Small Business Bureau will be presenting its annual Small Business Procurement Programme.
This is a legal requirement under the Small Business Act designed to lend support to an important provision in that Act requiring Government to procure 20% of its goods and services from small businesses.
The Small Business Procurement Programme will address this provision in a comprehensive and systematic way.
This has clearly not been a priority of the previous administration, however Mr. Speaker, our Government is committed to the development of a sustainable and successful small business sector and will ensure that small operators are given a space in the public procurement pipeline.
Small Businesses must also be given access to credit and to this end the Bureau will continue to improve the performance of the Micro and Small Enterprise Development (MSED) Programme which it executes through a US$10M project funded from the Norwegian Low Carbon Development monies held in the GRIF.
Marketing efforts by the Small Business Bureau will be carried out to raise awareness of the services of the Bureau so that small businesses can be able to access the various services of the Bureau especially outside of Region 4.
And, Mr. Speaker, the Hon. Minister of Finance was absolutely correct when in his budget 2016 presentation on January 29th he lamented the fact that too many small businesses do not factor into their business models the aspect of taxation. It is important for any Government to ensure that its businesses pay their taxes.
This year, through the MSED programme, business training will be provided for more than 400 small and micro-enterprises to help prepare them for accessing finance and for successfully managing their businesses.
This training will assist them to understand their obligations under the tax laws of Guyana.
The project is to be executed in two phases each to the tune of US$5M. We are currently still in the first phase of this project and are seeking to accelerate disbursals of loans and grants to small businesses so that we can successfully conclude phase 1 and advance to the second phase.
So the Small Business Bureau WILL be playing a bigger role over the coming years than it has done in the past.
Mr. Speaker, GO-Invest is a key agency for advancing Guyana’s economic growth, and its capital budget this year is G$26.5 M. This amount will facilitate the purchase of a vehicle for the Agency to properly perform its functions and carry out field trips and other out-of- office duties.
The Agency will be decommissioning two of its unserviceable vehicles so this is critical requirement. This budget will also provide for the purchase of much needed office and communications equipment.
Mr. Speaker, Go-Invest is an Agency which lost its esteem during the previous Administration, when it was allowed to stagnate under the Office of the President. It now enjoys the benefit of a competent board of directors and will soon have a competent Chief Executive Officer, whose job it will be to lead the transformation of GO-Invest into a high performing Investment Promotion Agency.
Go-Invest now functions within the purview of the Ministry of Business, where it will receive the attention it needs in order to attain the prominence and high regard that such an institution MUST command if it is to become successful.
Starting this year Mr. Speaker, the Ministry of Business will assume responsibility for the Competition and Consumer Affairs Commission as well as the Consumer Affairs Division formerly within Ministry of Tourism.
G$62.3M has been allocated for the current expenditures of these entities for 2016 and it is expected that, with a functioning Commission in place, both businesses and consumers will benefit from the protection offered under the Competition and Fair Trading Act of 2006.
In total, the Ministry of Business’ current expenditure for 2016 is budgeted at G$668,564,000 and this figure represents the sum of current expenditures for the Ministry plus its four subvention agencies.
The impact of the current expenditure of the Ministry of Business will relate directly to the achievement of the Ministry’s five main strategic goals which are as follows:
Improve the ease of doing business in Guyana
Attract increased foreign investments in our economy
Support the development and exports of value-added industries
Increase the economic opportunities and capabilities of vulnerable groups
Expand our capacity to develop and promote sustainable business-friendly policies
These are the goals on which the Ministry of Business’ 2020 Strategic Plan will be based and these are the goals that all our activities are designed to contribute to.
For the year 2016, these activities will include:
The completion of the Ministry’s 2020 strategic Plan- This project is receiving technical supported from the UNDP and will be completed by May of 2016. Once completed it will provide a roadmap for how the Ministry of Business will achieve its goals.
Greater output from our Strategy and Policy Unit in contributing to National economic policies and Business policies that will help to improve the ease of doing business and promote investment in Guyana
Addressing Guyana’s ranking on the “Doing Business 2016” index through collaboration with the Guyana Power and Light to reduce the time it takes for businesses to access electricity.
Ministerial outreaches to all ten regions of Guyana with at least two visits per region for the year. Representatives from the Ministry or its sub-agencies will be invited to provide information and guidance especially for micro and small enterprises in the hinterland areas.
Collaboration with Regional Democratic Councils to promote investor-ready projects in the regions. This is premised on the fact that each region in Guyana should understand its own investment opportunities and can benefit from collaboration with an Investment Promotion Agency which can promote those opportunities to investors.
Having the National Exhibition Centre play a greater role in the generation of revenue for the Government through the promotion of the site as a suitable hosting venue.
Mr. Speaker, In closing I’d like to commend the Hon. Minister of Finance for a well prepared budget and a well presented budget speech and in particular I’d like to commend him on his Measures to Improve Tax Administration which I believe will see businesses taking their tax obligations more seriously and making more valuable contributions to our country’s economy.
Related Member of Parliament
Related Member of Parliament
Finance Minister’s Budget Presentation 2017
30 Nov, 2016 / 2604
President’s Addresss to the National Assembly at reconvening of Parliament
13 Oct, 2016 / 1567
Message from His Excellency Brigadier David Granger, President of the Cooperative Republic of Guyana, to the National Assembly, on the occasion of the 50th year of Guyana’s Independence read by the Hon. Prime Minister Moses Nagamootoo
24 May, 2016 / 2175