Budget Speech - Mr Carl Greenidge—20144632 31 Mar, 2014
Mr. Greenidge: Thank you very much Mr. Speaker, especially for giving me my full name. Perhaps, Mr. Speaker, since you seem to be in a good mood, I can just crave your indulgence to start by saying a personal word in passing concerning the lost of my erstwhile neighbour and shield, often; never mind the fact that she spent a lot of the time sitting next to me accusing me of stealing her papers and documents. I did in the end manage to forgive her and I just would like to express my own sadness at her loss.
I should like in keeping with traditions of the House to extend congratulations to the Minister of Finance for presenting another annual budget to this Assembly. He has done so in a climate of anxiety on the part of the populace, and judging from the silence and subdued mood on the part of his colleagues on that side of the House also.
Ladies and gentlemen, the challenges facing Guyana, I believe, have been very extensively aired especially in the last year or so on the economic front, perhaps more loudly and frequently than at any other time in the recent past. It appears, however, that the priorities that should inform the preparation of budgets and overall economic planning are not perhaps shared in a consensual manner, as they should be. So I would like to start by pointing to this area and saying a few words on this with a view of trying to see if one can ensure that at least on the other side of the House it is clearly understood where we stand.
The Election of 2011 yielded a result that left, I think, few of us really satisfied. And although on this side of the House an overall majority exists in terms of the number of seats, the manner in which those seats are allocated whether we like it or not the electorate decided not to place in the hands of a single party a majority. That has the effect, and obviously everyone else would see it, of constraining the power of the Executive and its representative in this House. The significance of that outcome in relation to some sections of the electorate is, of course, often a topic for debate over drinks and elsewhere. But the simple fact is with not a majority of votes in the hands of the governing party, the business of the House has to be a matter that is undertaken on the basis of some understanding or common understanding on both sides. If the government’s programme is to be implemented it needs alliances or at least compromises over the programme that the Government would seek to implement. To conclude simply because a party has the largest single number of seats it deserves to be able to pass all the legislation it wishes, and to behave as though it is in control of the Assembly, is the source of what the Hon Minister described as a graphic parliamentary impasse. I thought it was important not to allow this matter to pass because, clearly, if we treat that impasse as some aberration, some mistake by the electorate that can be fixed simply by drawing to the attention the fact that on the other side of the benches we have a set of honourable and efficient people, we are not going to get anywhere.
In a democracy the expressed views of the electorate cannot be wished away as though they were an error in arithmetic. And as regards the procedure we use I want to say that with the reference I made to Mrs. Backer just now I am reminded that she used to very often speak to this question of the arithmetic that the election itself generates and would often, I think in deference to Mr. Manzoor Nadir, cite a comment he likes to make as regards this side of the House when you have a minority of seats. I think the expression is ‘we could have our say and the Government would have its day.’ It is a question of arithmetic in the end, and we should try to work to that rather than treating the consequence as the result of some devilish behaviour on the part of those on this side of the benches.
I want to say is that the Constitution itself does not qualify or circumscribe the term majority. Whether it is a majority of one the House exercise the same rules as to whether it is a majority of 40 unless, of course, in specific circumstances, and those circumstances require a two-thirds majority or a referendum. That I think is something we have to try and live with. I mentioned it because quite frequently I hear on the other side complaints that the Members on this side are exercising some undemocratic rights because they only have a majority of one. I think that is most unfortunate. It reminds me of an observation by Mr. Ronald Regan some time ago, he is not my favourite person, but he said governments exists to protect us from each other, and where governments have gone beyond its limits is in deciding to protect us from ourselves. I think that is a very valuable bit of information we should bear in mind.
The other point I want to make is that the People’s Progressive Party/ Civic (PPP/C) Government recognised the need to try and deal with the fact that there is need for some sort of consensus in this House, and initially we had efforts at a tri-partite set of discussions. The first set of discussions did not go very far although as a result of a crisis immediately before the Committee of Supply met in 2012 the Government conceded on a number of issues in order to break the deadlock. I say a number of issues, but it was specifically on the issue of old age pensions. I mention that simply to point out that the parties were engaged in discussions which threw up many, many issues, all of which were recognised as important, and around which a consensual programme or core of policies could well have been crafted. The governing side did not agree and in the end the issues were examined in a preliminary manner and there seemed to be some understanding they would take them up in the distant future to try to resolve them.
I mention these again so that I can get the opportunity to remind you to the extent which we have been discussing important issues, on these two sides of the House, but many of those important issues seemed to have died after the discussion took place. Perhaps there was a failure to recognise in that list of issues goals that at least a significant proportion of the representatives of the people, as the majority in this House represents, thought they were worthy of attention and worthy of some more explicit considerations.
Very quickly, let me say to you that in the list of 2012 that had been passed to the Government and that we had discussion on were the following: the discussion on Value Added Tax (VAT) and the Berbice Bridge toll; the question of old age pensions and public assistance – not only the increase in those but a significant increase which we thought should have been implemented; the question of the subsidies to Linden, Kwakwani, Guyana Power and Light Inc. (GPL) and GuySuCo; the question of the Public Service salaries - across the board increases as well as arrangements for the implementation of transparent mechanisms relating to the appointment of Regional Executive Officers (REOs), Deputy Regional Executive Officers (DREOs) and issues about management and modernisation of the public service; questions of raising the Public Service retirement age; a depressed areas development fund; the burning question of National Insurance Scheme (NIS) and its impending financial collapse; its lack of financial viability at the moment which the actuary continues to draw out attention to; the issue of Guyana Elections Commission (GECOM) and the constitutional offices, and the way the resources for those agencies are captured in the Estimates – in other words the need to amend the estimates as currently presented; and there also was the question of National Communications Network (NCN) and Government Information News Agency (GINA) and the Auditor General; National Industrial and Commercial Investments Ltd. (NICIL) was the tenth item.
Following those aborted discussions, or as a result of those, the Government and the Opposition had some broad agreement on some of these matters. It was agreed, for example, that the NIS position or the response of the Government to the actuarial recommendation on the NIS would be submitted to this House by November of 2012, given its importance. Up to today, we have not seen that. On the VAT issue, the Government undertook to set up a Tax Reform Committee and to examine ways to share more equitably the tax burden and to ensure or to see whether there are any possibilities for reducing the VAT in one way or the other, if only to look at questions of zero rating and so on. That has not happened.
Also on the table we had discussions on were a number of constitutional issues, some of which arose from the Fiscal Management and Accountability Act and its conflict with the Constitution itself, especially as regards article 212(A) of the Constitution.
In the subsequent year, namely 2013, we went through a discussion as per 2012 in a bid to try to find some common ground and to agree a process that would cause us to avoid, or try to ensure that we avoid, these impasses and sorts of depression sometimes which captures the populace when we approach budget time as to whether a crisis is going to beset all of us. Arising out of those exchanges in November the party leaders on this side, separately and collectively, wrote to the President again on a number of issues – eleven on this occasion – ranging from across the board salary increases, the question of frequency licences, the Government’s commitment to the issue of licences to the television station in Region No.10, a status report regarding the transfers requested by GuySuCo and GPL, and an update on the plans that will enable them to get out of the situation of constantly calling on us for subsidies. The Government was called upon to reconstitute the Tax Reform Committee; there was also the question of constituting the Public Procurement Commission, the establishing of an Integrity Commission, the Human Rights Commission and a number of the other commissions which were not properly established.
There was also the request in that letter concerning the extra budgetary agencies including NICIL and again the question of NIS arose and the implementation of the actuary report, actuarial recommendations. There was again the toll on the Berbice Harbour Bridge and the question of political dialogue and constitutional reforms, and a call again for the re-establishment of institution of arrangements so we can put in place a professional public service; also the question of dealing with contract employees.
I need not say that in the budgets between 2012 and now none of these matters have been properly addressed, let alone reflected in the budget document itself. In recognition of the dissatisfaction that this had caused on 17th April last year, the President in a meeting with Mr. Granger and Mr. Granger’s team agreed on an exchange of letters between the Minister of Finance and myself which would set out a process, a process which would help us towards dealing in a more orderly manner with the pre-budget discussions. That letter, whilst initially we thought it might be the trigger for ensuring that, at least, this process is started after so many false starts, has also failed. Only the A Partnership for National Unity (APNU) attended the sole meeting that was convened and at that meeting the proposals that were submitted were not discussed and no letters were exchanged as part o the commitment that had been made.
The point I want to make is that the Government is in receipt both of proposals pertaining to a budget that could capture a consensus across the isles as well as a process that could serve as a blueprint for dealing with budget discussion and some form of the preparation in future. But in spite of these efforts we come to the budget of 2014 without really having gone any way significant towards dealing with the challenges that give rise to the concerns in the first instance. I draw your attention, Mr. Speaker, to the consequences because in dealing with budgets in the past we have had cause to cut the allocations requested by the Minister for a variety of agencies. I am thinking of the moneys pertaining to the Commissions, the NCN, GINA conundrum and the considerations that arose in implementing those cuts. It is worthwhile saying amongst the conditions raised here, especially since in dealing with this in a letter pertaining to whether the Estimates were properly before the House, you had asked for an explanation of what were the conditions governing, if you like, the decision of the House. I know we deal with that elsewhere but just to say to you that we had called for a cultural and social audit and for the adherence of these agencies to internationally accept professional reporting standards, as well as a copy of the report and the wrong doing within NCN in 2012. We had a number of other areas, the conditions pertaining to the transfers to GPL under the electrification programme, issues pertaining to contracts for some of the major projects of the Government including the speciality hospital order, the problem of the Low Carbon Development Strategy (LCDS) and the issue of Amaila Falls and the refusal of the House to approve the equity contribution that the Government had requested in that regard, and we also had cause to cut an element associated with the international airport at Timehri.
Mr. Speaker, I am not going through these simply because I want to extend our deliberations today. I want to say to you that if we are aware that we have taken certain roots in the past and the efforts to try and ensure that we do not end up in a cul-de-sac after these exchanges or efforts, then we really need to seriously pay attention to establishing modalities for dealing with the difficulties that the majority identifies in relation to the Government’s programme. At the moment it is the case that no mechanism exists for that.
I want to just give warning to my Colleagues, Cde. Speaker, that for example, in the manner in which the estimates have been formulated, as I had written to you last year, April, indicating, we are still of the view, which you confirmed in your ruling, that the format of the Estimates, as presented to this House, were not consistent with the Constitutional requirements. Now that has implications because I am recommending to my Colleagues, that they stand on that principle. In other words, the Government has an obligation to honour its constitutional obligations and we have an obligation, also, to ensure that they are held to those rules and they do not just break the rules because a Minister or someone on the other side believe that they do not have to be bound by rules. That is the reason for drawing these matters to your attention Mr. Speaker, and for drawing them to the attention of my Colleagues.
As we look at the budget of 2014, we see some of the broader issues that had been identified in our exchanges again, tend not to be adequately treated. Let me look at those mentioned by the Minister himself in his presentation and I think one can have no difficulty with these. It is useful to know where the fashion or those who fashion the budget, makes these emphasises. They are not attempting to list these in any order or the order that the Minister had sighted them, but there were a range of broader goals at the opening section of the budget, ranging from aspirations for home ownership; raising levels of technical and professional qualifications; trying to pursue education for a better quality of life; access to decent public health care system; and the hope that every family should have good reason for being optimistic about their future and should be motivated and incentivised for personal fulfilment and upward mobility.
These are wonderful goals. We know of course, especially as it regards the question of optimism about the future. At least the most recent survey that I looked at amongst youngsters leaves us in a place very far from optimism because all of those youngsters between the ages of primary school and 25, would want to leave the country if they could have an opportunity, either immediately or within five to ten years ahead and it is a serious matter. This is one of the reasons why we should try to ensure that we can find common ground and move forward in a manner that is constructive.
We are pleased to see those goals. We also want to say that we would have like to see some others, many of which loomed very large in cutting waste and corruption. Amongst them is cutting waste and corruption, the question of the quality of Government services, the problem of emoluments and conditions of service, the regulatory regimes, especially as regards the financial and other sectors, the maintenance of mechanism to protect the poor and vulnerable, putting in place an adequate analytical framework and benchmarks to enable the target setting and monitoring of some of the very goals that the Minister has mentioned.
It is interesting that in a number of the areas when one looks at the proposals, broad though they are, clearly they are very desirable. What worries me is that it is unlikely that we are able, in a hurry, to provide a background that can tell us where exactly we are in relations to some of the areas that are mentioned, even in terms of the facilities or the initiatives, taken by the Government in the past in regards to some areas, such as employment, employment among the youth and so forth.
The issue is; have we got a wide enough set of goals set out in background that informs the policy making for budgets and financial plans? Are we taking account of the need to ensure that the data that would be available to help us to undertake the analysis is in place? I think these issues are especially urgent given growing evidence of income and equality in our society to an extent, I think, largely unprecedented or at least unprecedented in most of our lifetimes.
The question of the Minister, for example, in making his presentation took the opportunity in the opening to speak about the achievements that have been made since 2002, when this Parliament started its session. He listed a number of these areas, especially looking at how much was spent on a range of services. But you know, Mr. Speaker, at the end of that exercise, we still have to ask ourselves whether in fact the expenditures, large though they may have been, whether they have had the impact that was intended. An impact is something that is very much missing in terms of the analysis and the presentation of the 2014 Budget.
I will turn now to the three or four points that follow from these points that I was making earlier. The drafters of the 2014 Budget have deliberately ignored the legal and constitutional issues raised in the earlier exchanges over the Budget the APNU proposes to have these matters brought to the forum.
Secondly, in view of debates that has taken place on a number of fronts, whether it was on the LCDS the state of play in relations to the Amaila Hydro-Power Project, GINA and NCN, and so forth, that these debates seems not to have been taken into account and we see almost what is a contemptuous inclusion of items in the budget, notwithstanding the fact that in the earlier debates, the House had called upon the Ministers responsible for these sectors to present to it evidence or information, before they would be prepared to approve moneys for these areas.
I would like to single out for treatment at this stage the request for funds for GuySuCo... [Interruption] I know that the Minister has, in passing, made reference to what he called a promised, soon to be appointed, Board of Directors and senior management. I note that not a word about the demands for ensuring that the Board and the management enhance their competence and are less politicised in a manner raised not only by us but also by Guyana Agricultural and General Workers Union (GAWU).
I should also like to say this; the question of GuySuCo is a very important one. There are a number of sectors in this country that are very important, not only because of the number of workers they employ, but because of the import of the industry to our economic well-being and welfare. And because it affects the lives of so many of our citizens, sugar is one of the industries to which special attention has always been paid by certainly the Governments that I have been part of in the past.
Our position have, let me say for those that may have some difficulties with economics, that we have provided considerable support to the sector in the past and those of you that know a little bit about devaluation should understand that the devaluations of the 1980’s had a lot to do with providing Guyana dollar resources to the main net earner of foreign exchange, so that they could throw a profit in Guyana dollar terms. So if you do not know, ask. Do not be heckling as though you know what you are saying.
It is clear that an industry which is important and deserves support, also deserves and needs to ensure that when moneys are requested on behalf of its workers to ensure that arrangements and plans are in place to ensure that the injection of money actually goes towards fixing the problems that gave rise to difficulties in the first instance.
The examination of the work done in relations to both the bauxite and to GPL, are the same. That is, that they are important enough to warrant financial assistance, but that the financial assistance should be conditional on the Government showing that it understood and it had made arrangements to remedy the difficulties that had gotten them in hot water in the first place. We have called for medium and long terms plans and when those plans had been provided, even before the period has been completed, the industry or the company has gone off track. That is the case of GuySuCo and the others.
There is no point shouting sugar workers because the problem is not the sugar workers, the problem is the Government. The problem arises because of Government’s policy. A policy which seeks to fill the Board with a whole set of political appointees; a problem with seeks to appoint managers who are afraid of their own shadow. Government’s own Member of Parliament over there, the GAWU representative, has spoken to this point and we agree with him in its entirety, that GAWU’s analysis of the weakness of the sugar sector is accurate. We agree with it and the Government must fix those things before they come for more money. That is what we are saying.
Mr. Speaker: Hon. Member, your time is up. An extension is required.
Ms. Ally: Mr. Speaker, I move that the Hon. Member be given 15 minutes to continue his presentation.
Question put and agreed to.
Mr. Greenidge: Thank you very much Mr. Speaker. Guyana Agriculture and Workers Union has a long list of management and policies inadequacies which were drawn to the attention of Government and the world, over the last five or more years. What we are saying is that those complaints should be addressed. In the longer term, GuySuCo itself, and I must say, in wearing a previous hat I had funded a study on GuySuCo and its future and how it would survive in the liberalised new market and that called upon the industry not only to improve its efficiency, but to diversify into higher value products. That also has to be part of the plan and we agree to that. [Interruption]
Mr. Speaker: Allow Mr. Greenidge to make his presentation, please.
Mr. Greenidge: Mr. Speaker, the sectoral development that we have seen set out in the Budget leave us cold in many ways. Let me take bauxite. I notice that the Minister made mention of a transhipment and dry docking facility to be constructed in Trinidad and Tobago, presumably at Point Lisas. This for us is a puzzle because we had a facility there before; it turned out to be uneconomic in the 1980’s largely because of the low volume [Inaudible]. The industry therefore developed a plan, which they implemented and which saved money to the tune of US$3-US$4 per tonne. It involved the construction of a turning basin or a dock at the mouth of the Demerara River and this operated until 1996. Later, Reynolds itself built a facility in the Berbice River and there were, I should say, producing larger volumes than the Bauxite Company of Guyana Inc. (BCGI) and RUSAL is now producing. Like GUYMINE and DIDCO, they ruled out the Trinidad option. So it is somewhat of a puzzle to understand how it is that Guyana has gone to that particular proposal. The maintenance of that facility or the attempt to establish a facility in Trinidad seems not to be well founded. I think that we would be interested in knowing what underlies that proposal.
Secondly, I see there is a proposal for Kurubuka deposit at this stage. As regards that particular proposal, I should say that the experience here is that when one looks at the note they get the impression that this is an expansion of bauxite production, which is going to have a major impact on employment. In fact, of course, it is actually the establishment of a facility to replace the depleted reserves at Kwakwani , so it is not, in fact, additional production and it should not, in a sense, be portrayed in that manner.
I would like to say that in looking at the budget there are two more points I would like to make. First of all, in looking at the figures, especially at the estimates and the various economic balances, one cannot avoid the impression that many of the figures have been doctored in order to facilitate balance. If one look at both revenue and expenditure they will see that. That I think is a matter that must concern us.
The last point, I would like to make pertains to this claim that this Budget is the largest budget ever. Do you know Mr. Speaker that when a budget comes to the House there is one figure, in the following year that figure is revised and in the year after that the figure is settled as the final figure? Mr. Speaker, if you have a look at the Budget 2013, which was billed as the largest budget ever, in 2014 the $208.4 billion, which was the largest ever actually turned out to be $165.8 billion. In fact, in a revenue sense it was smaller than the previous year. If one looked at it on the expenditure side, it was not much different either.
The significance of the size of the budget turns upon when it is that one is actually looking at it. The other side is the economics of it. If one thinks that it is so wonderful to have as large a budget as possible, the limit on the size of the Budget is given by Gross Domestic Product (GDP). When the Minister and his Colleagues presentations are followed, one gets the impression that... [Interruption]
Mr. Speaker: Allow Mr. Greenidge to speak. I am having difficulty hearing him. Go ahead, Mr. Greenidge.
Mr. Greenidge: Tremendous joy and celebrations would follow on the announcement that the budget was the largest it could ever be. In other words, it has taken all the Gross Domestic Product. What it means in fact when this budget gets larger and larger is that it is taking a larger share of the income that one earns. Ultimately the budget’s limitation is the total bundle of goods and services that are produced.
The point I am making is that the significance of a larger budget has to be seen in the context of the share of income - of your income that it takes, not in terms of the absolute size of money spent in any particular year. That issue is a very important one because the share of the budget and the management of the resources that the Government garners have given rise to problems in this country before and it. it reminds me that we should also bear that in mind when we seek to stop this House from modifying that amounts requested by the Minister for funding. It turns upon the whole principle of taxation and taxation without representation. That is why one has a right to look at and amend those figures so that they are consistent with the will of the majority. Mr. Speaker I thank you very much. [Applause]
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