A $6B bailout for the ailing Guyana Sugar Corporation (GuySuCo), a $3.7B bailout for the Guyana Power and Light (GPL) and a $625 increase for Old Age Pensioners are among the features of the $220B Budget announced yesterday by Finance Minister, Dr Ashni Singh.
Under the theme, ‘A better Guyana for all Guyanese’ the Finance Minister yesterday spoke for nearly three hours, detailing the largest budget ever and comes on the heels of the eighth year of economic growth.
Dr. Singh, in his presentation, yesterday, said that the budget is fully financed with no new taxes. Among the measures for the populace, specifically pensioners, there is a five percent increase. Old age pensioners will now be receiving $13,125 per month.
He also included among the measures for old age pensioners an increase in the electricity assistance programme.
Dr. Singh reminded that last year Government gave the pensioners $20,000 a year meant to assist them to pay their electricity bills. This will be increased to $30,000.
Dr Ashni Singh (standing) presents the 2014 Budget as MPs pay rapt attention.
The Finance Minister also announced that in an effort to give additional support to parents of school aged children, “Government will provide a cash grant to the parents of every child attending nursery, primary or secondary school in the public education system in the amount of $10,000 per child for the year 2014.”
Dr. Singh also announced a countrywide cleanup campaign to the tune of $1B, of which $500M will be used to clean up Georgetown.
The Finance Minister said that there can be no doubt that Georgetown has a serious sanitation problem that can no longer be ignored.
“Government can no longer stand by in hope, waiting in vain for comatose local government bodies to address this problem,” said Dr. Singh.
In addressing the bailout for GuySuCo, Dr. Singh told the House that “much has already been said and will undoubtedly continue to be said in the coming weeks about the challenges that bedevil the sugar industry…
“Our Government’s commitment to the long term viability and profitability of the sugar industry has been unswerving throughout the years, and this commitment has manifested itself not in void rhetoric but in tangible support.
It was to this end, according to the Finance Minister, that Budget 2014 provides for Government to transfer a further $6B to help the industry achieve the reversal of its fortunes.
Despite the dismal performance of the sector last year, Dr. Singh is projecting that this year the industry is expected to produce 215,910 tonnes of sugar as against the 186,000 tonnes last year.
Despite a record performance last year in the rice industry, the Finance Minister said that this year the Government intends to inject $500M into the industry to support its efforts to increase competitiveness and resilience.
Dr. Singh argued that it is “imperative that the industry be placed on a path that would sustain its strong performance even under the most testing conditions.”
As it relates to Rural Enterprise Development, Dr. Singh said Government intends to encourage and promote more aggressively the emergence of entrepreneurial ventures in rural communities with an emphasis on small businesses and labour intensive activities, the principal aim being creation of jobs for young people.
As a result, $1B has been allocated to support this initiative and “it is expected that thousands of persons will benefit, either through employment obtained or other linkages, from enterprise incubation grants made under this facility.”
Dr. Singh also announced that given what he calls the bright prospects of tourism and hospitality industry in recent years, there is going to be a demand for skilled labour in the sector. This has to be addressed.
As such Dr. Singh announced that Government has allocated US$4M to build a “hospitality institute to ensure that we produce world class personnel for this important industry going forward.”
According to Dr. Singh, tourist arrivals have increased, international media coverage has been strongly favourable, and important niche markets are emerging for the local tourism product.
“All indications are that this sector will be a key contributor to value added production as well as job creation in the near and medium term.”
On the matter of a bail out to the GPL, the Finance Minister told the House that fuel prices remain high and the company has faced considerable challenges meeting the cost of its operations without a tariff increase since 2007.
According to Dr. Singh, in order to ensure that the company can meet its investment and operational obligations, Government has allocated $3.7B to support critical capital expenditure.
He said that should this not happen, steeper tariffs would be unavoidable.
The Minister reported also that, no progress has been made on the matter of adjusting electricity tariffs in Linden.
As a result there is an allocation of $3.2B to meet the cost of maintaining the electricity subsidy in Linden and Kwakwani.
Dr. Singh also announced that $1B has been allocated to be expended on rehabilitating critical interior roads including the Linden to Lethem road.
According to Dr. Singh, “access to our hinterland communities remains absolutely critical to the wellbeing of our more remote communities as well as to the economy of our country.”
Dr. Singh in looking towards the performance of the economy in the company year said that Guyana is expected achieve another year of positive growth.
He said that the economy is projected to expand by 5.6 per cent and that 2014 should see a five per cent inflation rate.