Budget Speech Mr Manzoor Nadir - 20122766 10 Apr, 2012
Mr. Nadir: Thank you, Mr. Speaker. First let me offer my congratulations, once again to the Hon. Dr. Ashni Singh on his sixth Budget Presentation and to commend him and his staff for remaining on course, uniting in purpose and for laying the foundations for the prosperity of all of our people.
We were just treated to a most hilarious presentation by the Hon. Member Mr. Moses Nagamootoo and had we not been in this August Assembly I would have thought we were at the show “Laugh Til Yuh Belly Bust”. There is one very popular television presenter by the name of Mr. C. N. Sharma who normally, when people behave like the last speaker did in his presentation, Sharma would say he did not take his medication today. [Mr. Sharma: ...?] That was a compliment to the father of the Hon. Mr. Jaipaul Sharma on the other side of the House.
The presentation was also one of a person who is very confused and when you listen to him he was going to please everyone all of the time. In his presentation he was going to cut expenses and he was going to deliver still better quality of service. He is going to cut taxes and he is going to give more to pensioners, the public servants and also to the social sector which shows how that is a confused person. That is a person who needs a lesson in “graspmatics” to grasp the concept and not “grassmatics” to let the ordinary person understand what this budget is about and what the debate is about. That is what we expect here and that is what you cautioned all of us to do as you started.
We cannot do all of the things at the same time and what this sixth budget of the Hon. Finance Minister does, it continues to keep us on course for another year of positive growth in our economy.
The last speaker, as I listened carefully – I had some amount of admiration for him – one felt the anger at having this party for whatever reason, I was not inside. Also, as he started speaking, one could see the narcissism in him falling in love with his own voice and I think that is where he lost the concept, because he plucked some nominal figures out of previous Budgets and this one and says that the Finance Minister is incompetent and he should resign because today Guyana is a more indebted country than it was previously. So, he goes back to 1992 and he takes the US$2 billion in debt that we had and he multiplied it by the rate of exchange at the time, GD$126 to US$1, and he came up with $252 billion.
He went to the budget presentation and said that today Guyana now owes $253 billion, an increase in our debt of $1 million.
Today the nominal value… but clearly the other leader of the Alliance For Change (AFC), who just seemed also to be in the same kind of position of not understanding the numbers… because the time value of money twenty years ago as to today is vastly different. If the US dollar figure is looked at, today our debt is almost half as it was twenty years ago. The nominal value and the US dollar value are all different; but what we know today, as a fact, is that we can service our debt and this PPP/C Government has restored creditworthiness to this country. That is why we are getting more money to borrow. It is because we have restored creditworthiness.
Then he plucked another set of figures – the deficit – and he said that we have a bigger deficit in nominal dollar terms. Yes, we do! But he did not say nominal; he said that today we have a bigger deficit – the biggest that we have ever had. The Minister of Finance said that our deficit is going to be about 4.4 per cent of GDP this year. The United States of America (USA), today, for every dollar it spends it has to borrow forty cents. The deficit that it is running is close to twelve per cent of GDP. Guyana, last year ended at 3.5 per cent. This year, it is projecting 4.4 per cent of GDP as its deficit. It is a more than manageable amount.
If one goes to Europe… I was looking at the Daily Telegraph, last night, Britain runs, today, a 10.4 per cent deficit; Greece is at 10.5 per cent; Spain runs at a 9.2 per cent of GDP as a deficit. Guyana’s projection is at 4.4 per cent. That is a credit to the management which this PPP/C administration has brought to the Government, to this country and to the policies which have worked to grow this economy. I can go on and on, but I would challenge the last speaker, the Hon. Member, to run his business, to run his household, as he is asking this Government to run the country, by eat less, by use less light, by use less technology - cut all of those things, pay his workers better, and he does not have greater income because he is cutting taxes, and let us see how long he will rally out.
Let us talk to the pensioners… One of the other issues that Members of the Opposition played up. Every party in the Opposition, I usually say, has the luxury to be ridiculous because the Government is going to give the public servants a twenty per cent increase, and the last time that level of increase was given - the thirty-odd per cent - it drove inflation by eighteen per cent and every single dollar in the whole economy suffered. It was not only the public servants who got that increase. So you have to be prudent and responsible. Mr. Speaker, you have to be very prudent and careful. You cannot start sharing up the pie before you baking the pie. You cannot start chewing before you having something in your mouth, and before you do that you have to work hard. While, yes, “…man shall not live by bread alone…”; it is “By the sweat of thy brow thou shall eat bread.”
I will go back to the issue of the pensioners. Almost every single person in this country who gets an old-age pension…, and in no country an old-age pension from the state is going to be a pension for a person to live on. That is why there are contributory pension schemes; that is why there is the National Insurance Scheme (NIS). The average public servant will get three pensions. At age fifty-five the public servants will get the Government pension; at age sixty they will get the NIS pension, and at age sixty-five they will get a top-up from the state. People are not talking about that. Those people who did not even work would still get this pension, and including in it is also a waiver on the water rates. [Mrs. Lawrence: How many people actually own their homes?] Forty-two thousand persons enjoy this right now. Yes, the Hon. Minister of Finance would love to do more. Taking the old-age pension to $10,000 will cost this country $630 million more annually. [Mrs. Lawrence: So what?] We may ask, “So what?” , but no country gets loans and gifts to pay pensions. It has to come out from current revenue. Let us take the $5 billion, if we are going to give that, and divide it by the $128 billion in current revenue and we will see the percentage of our own money that is going to the pensioners. Yes, this Government would like to do more but it has to be able to deal with all of the people. When there is more expenditure in health care, and there are the free services from Lethem to Suddie, and all the way down to the ophthalmology centre, it is costing money. When it is going to provide the $6 million, as Minister Ali mentioned, to subsidise the electricity cost to ensure that if there is an increase in electricity rate it will be cushioned and every single person enjoys that - every single household enjoys that. The $4 billion to Guyana Sugar Corporation (GuySuCo) is protecting twenty thousand jobs. When the Hon. Prime Minister, earlier in the 90s, negotiated for the billions of dollars so that the Linden Economic Advancement Programme (LEAP) could get on stream, it was because we also cared for that community. For more than two decades, the people in the bauxite sector, the workers, the people in Region 10 and Linden were given the support because they needed it, and this caring Government ensured that it could have held their hands while, at the same time, it tried to revive the sectors in which the resources are. So bauxite has rebounded; 1.8 million tons of bauxite was produced last year. The Hon. Minister of the Environment and Natural Resources, just recently, was part of the commissioning ceremony for billions of dollars worth of capital equipment that is going to go more into the bauxite production sector. This is what this Government has been doing. It has been staying on course; it has been producing the results. That is why we were able to move from a per capita income in 1992 of US$300 to, today, over US$2,500.
Yes! We are not as prosperous as Grenada…and the last speaker, the Hon. Member Mr. Moses Nagamootoo, mixed up what the Hon. Member Mr. Irfaan Ali was saying. The Hon. Minister of Housing and Water and Tourism, Industry and Commerce was not saying that we have the biggest economy. He was saying that we have the highest growth rate in economy. The Hon. Member confused that and said that we have the biggest economy. The Eastern Caribbean countries, Barbados and Trinidad and Tobago enjoy middle income status, a per capita income of over US$6,000. This is the fact, Mr. Speaker, and you have heard me say this over and over, again. I like to establish what the facts are and fight with the facts; it is not over the facts. The fact is that we are still at US$2,500 per capita and the Eastern Caribbean countries, Barbados and Trinidad and Tobago…Trinidad and Tobago’s per capita income is about US$12,000. It is two different levels of society, but still we can ensure that we can put significant resources to help cushion the impact of the market system for those who cannot go along with it. The social safety nets continue to be in place.
I do not think that I need to beat the presentation of the Hon. Member Mr. Moses Nagamootoo further because it is there for what it is. [Mr. Nagamootoo: What it is?] It was a good laugh and I enjoyed it internally, in my belly. My belly did not burst. I enjoyed it internally; but we have to be a bit responsible. We cannot raise the level of people’s expectation just because we want a vote.
If you listened carefully, that Member pontificated as if he were the Government - that he won thirty-three seats alone. That is what it sounded like. I am saying that the single largest party in the National Assembly today, people seem to forget, is still the People’s Progressive Party/Civic.
Hon. Member Mr. Carl Greenidge… I have a certain amount of pity for Mr. Greenidge, because clearly, while Mr. Greenidge has returned to Guyana, he is still mentally away from Guyana. He does not know what is happening in this country. He said, at the very opening, that he cannot give any prizes for the targets. I was just reading the Declaration of Sophia. [Ms. Ally: That is a good book to read.] Ms. Ally was not around at that time. At the Sophia’s declaration, the People’s National Congress, when it was talking about increasing rice production in Region 5 and Region 2, resolutions of the whole congress, the comrade Mrs. Philomena Raymond from Region 2 said, in 1979, that in 1977 the rice farmers… [Ms. Ally: It was Region 3. You do not know your geography.] Yes. It was Region 3… who did well were promised incentives and she said that two years later all they got were medals. The Hon. Member Mr. Greenidge said that there were no prizes to be given out. Mr. Speaker, I want to say to you that the Hon. Ministers of Finance that this Government has had and the staff, and this particular Government, need a lot of prizes for maintaining the course and achieving the targets.
I was listening to hear the Hon. Member Mr. Greenidge mention in his analysis where he felt that this budget was too optimistic, in terms of its projection, and to lay the basis that because of the optimism in the projections we are not going to achieve the revenue targets, and if we do not achieve the revenue targets some of the programmes which we may go into may have to be postponed or cancelled, as is happening in some economies. I looked at the targets over the past years, and I am not going to go to 1992; I am just going to go to 2011. The budget laid by the Hon. Minister of Finance last year stated that we were going to target growth at 4.6 per cent. What was the growth rate last year? It was 5.4 per cent. He needs a medal. It stated that the non-sugar economy would grow by 2.8 per cent last year. It grew by 5.6 per cent. He said that rice would have achieved 379,628 tons, a 4.9 per cent increase predicted. What was the target achieved? It was 401, 904 tons, an 11.3 per cent increase. [Ms. Ally: He needs a medal again.] That is a gold medal now. He said that forestry would have declined by 4.1 per cent and fishing would have sluggish growth at 0.4 per cent. We did not achieve that. Fishing declined by 5.3 per cent and forestry by 9.3 per cent and there is a reason for it, and in his budget presentation, this year, he mentioned it. It is because we are allowing the stocks to regrow out there and we are looking at the sustainable use of our forest and so new rules and regulations are being put in place incongruence with the Low Carbon Development Strategy (LCDS). So we expect that those two sectors will perform a bit sluggishly, but mining and quarrying, last year, was predicted at 2.8 per cent and it grew by 19.2 per cent - 19.2 per cent!
In every single area being looked at there was growth, except in forestry and in the fishing sectors. For me, a person who is of the classical economist mode – Keynes - what I was impressed about was the inflation rate. While last year the Minister of Finance projected a 4.4 per cent increase in inflation, there was only a three per cent increase in inflation. The six per cent increase that public servants got actually translated into a positive three per cent in terms of increases. This is why I have a lot of confidence in this particular budget. Why? It is because the Minister of Finance has now looked at…and he has become a bit conservative in terms of his projections. He is saying that growth will be 4.1 per cent; non-sugar growth at four per cent; rice at 2.6 per cent; forestry, he said, will show a continued decline of 8.9 per cent; very conservative in mining sector, a 1.8 per cent increase and gold at 2.9 per cent. If you look, Mr. Speaker, at the projections which he has made you will see, Sir, that they have been conservative and at the same time it is very indicative that this economy continues to show real positive growth. That is why he can stand on theme of Remaining on Course, United in Purpose, Prosperity for All. So when one looks at the analysis of the growth…
While sugar did not achieve the projected growth rate last year, sugar production did increase by 7.1 per cent over the previous year, and it is pointing in the right direction. This supposed mismanagement that we are hearing about, in terms of sugar, … We are going to see this year that the proof is going to be in the reality of the targets set. A very realistic target is set for sugar this year.
What does the budget have to offer? We have seen that the budget measures from previous years have been working. Last year there was a decrease in the tax rate for non-commercial companies from forty-five per cent to forty per cent and for the manufacturing entities, from thirty-five per cent to thirty per cent. Earlier this year, Banks DIH Ltd. said that its profits increased by forty-two per cent. The tax break that Banks DIH Ltd. got last year was equivalent to thirty per cent of that better performance. Thirty of that forty-two per cent could be attributed directly to the tax break. The policies and the measures are working. Banks DIH Ltd. is able to provide more income as shareholders returns on their investment. It means better wages and salaries for the workers. That has happened to all of the companies that benefited from the $2 billion of relief because of tax breaks last year.
The Minister of Finance is being extremely prudent. He is being responsible. We cannot be reckless on this because we are not out of the storm as yet. We have the global financial economic storm that is sweeping the world and we have been sheltered because of the better policies that this Government has implemented. It is much better than any other government has had in this country.
I will say what I like about this budget. This budget makes an allocation of US$1.7 million for a Small Business Development Fund. In all, over the last three or four years, in excess of $2 billion has been set aside for the Small Business Development Fund. I will say that the former Minister of Finance, the Hon. Member Carl Greenidge, is not here because he does not know all of the changes that have happened in this economy. He does not know about all of the changes that have taken place. [Mr. Harmon: That is why he came back.] He had to come back. Government is taking a bigger share of the economy. The share of the economy where Government is concerned is right now nineteen per cent of GDP and it has remained constant over the last eight years. It is not increasing. I can present him with those numbers and he can compute it himself, because there is not a paucity of economic data in this country today. The Hon. Minister of Finance and his staff know that information is available all over - by the website, at the flick of a finger. I am not going to browse… [Ms. Selman: You like to google stuff.] You do not say “google” anymore, you say browse. You do not say programmes, you say applications. [Mrs. Backer: You are selling it in the shop, your new job, at Gizmos and Gadgets.] I am proud to say that the Hon. Member Mr. Jaipaul Sharma’s sister is the owner of Gizmos and Gadgets.
There is $2 billion which is going to be set aside and…The honourable former Minister of Finance…Yes, for every single budget, before it reaches the Finance Minister, the estimates are approved by the Minister. When we see these estimates we will see that the Minister of Education signed them. We will see that the Minister of Housing and Water signed the estimates. Also there are, apparently the Hon. Member Mr. Greenidge does not know this, multi-year projections. One just has to flip the book and one will see it. Look at the revenue aspects. Today the budget comes in three volumes. [Mrs. Backer: What do you mean by “today”? It has been coming like that all of the time.] Under this administration the budget comes in three volumes. One is narrative. There is so much information presented to us that we could analyse this budget and from it we could see that the policies and the programmes of the PPP/C, if we stay the course, are going to produce prosperity for all of our people.
I was talking to the issue…I know that the Hon. Member Mr. Irfaan Ali did not have an opportunity to speak to it, all of the activities that are happening in his sector, but the Small Business Development Fund is going to be a major boost. The Minister of Finance mentioned in his budget presentation that over eight hundred people will get direct employment, just this year alone, from the initiative of the small business sector.
There is more money allocated to the Competition and Fair Trading Commission. There is more money allocated to the Small Business Bureau. I am concentrating on those because there are a lot of speakers on this side who will deal with the other sectors. I know that the Hon. Member Mr. Ali did not get a chance to do it, but these are the sectors which are going to bake this bigger economic pie that we want to cut up in larger slices for our people.
Small businesses: In excess of forty thousand of them could benefit. Just as we have seen with the Women Of Worth (WOW) Programme, which Minister Manickchand launched, which has a credit facility for single parent women at six per cent financing, this Small Business Development Fund is going to be a guarantee facility. So those who do not have the collateral can get access to credit, and in particular the people in the Hinterland communities. My good friend from Surama, the Hon. Member Mr. Allicock, knows that Toshao Eugene Isaacs has now embarked upon acres and acres of cassava cultivation which he wants to do on a plantation scale so that he can do mass production of farine. The market for farine is big in Georgetown and in Brazil. What is his challenge? His challenge is access to credit because in the Amerindian communities the people cannot take their plot of land to the bank. It is communally owned. This facility is going to help even those communities, Member of Parliament, Mr. Allicock. There are policies and programmes being put in place to ensure that the economy can grow from the small and microenterprises to the big projects.
While some people may want to knock the Marriott Hotel project, and on one side of the House, it is only protecting those who endorsed a particular party, and funded that party, it is not about closing any local business. The Marriott Hotel project is about expanding opportunities for all businesses. One of the challenges in the tourism sector has been to get a sector leading brand in Guyana and that is what the Marriott Hotel project will bring. We are not preparing in Guyana for the same level of tourism. The Hon. Minister of Tourism, Industry and Commerce is looking at numbers of one hundred and eighty and two hundred thousand and he is targeting a particular… I had the opportunity to speak with him a week ago [Mrs. Lawrence and Mr. B. Williams: Why did he not speak about it?] Time. He will tell you, Mr. Speaker, that the plans we put down have been there for a little while but we had to tread cautiously. In 2005 there was a major flood in this country and we had to recover.
The airport’s expansion is not because there was a crash; it is because the planes are getting bigger and people do not want… There is nothing like poverty tourism. People who want to travel and those who are travelling from the First World expect to see first class facilities wherever they go. The World Tourism Travel Index - if you go on this site - will show that it is projecting growth in tourism in Guyana. Why? It is because the Government is making the investment in the infrastructure to make it better for people to come to Guyana. So the Marriot Hotel project and the airport’s expansion are not to punish anybody but they are to build more opportunities for all of our people in the country. So this budget has a lot to offer to all of our people and in some areas Government will have to take that tough decision, as the Amaila Falls Hydropower Project, and be involved, because without that we are going to continue to limp along.
This budget speaks to two particular sectors. It speaks to the Information Communications Technology (ICT) sector and also the energy sector. For any economy today the essentials are going to be electricity and connectivity which are being laid in this budget and by this Government.
It is an honour for me once again to commend this budget to the House and to compliment and congratulate the Hon. Minister of Finance and his team.
Thank you very much. [Applause]
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