$330B Budget 2020 passed

Just after 22:00h on Friday, the National Assembly gave its thumbs-up for the $330 billion budget for 2020, thus setting in motion the People’s Progressive Party/Civic’s plan for development.
The final day for the consideration of estimates in the Committee of Supply commended at 09:30h.
Juan Edghill –Public Works Minister with responsibility for Finance – expressed his gratitude to the staffers at the Finance Ministry for their commitment to preparing the Budget in just 29 days. He noted that they worked beyond the call of duty without any complaints.

While defending the allocations for the Finance Ministry, Edghill was asked about salary increases for public servants, and whether they were catered for in the Budget 2020. To these queries, he related that considerations are being given for the public service. However, the Minister related that, at this time, there is no announcement in Budget 2020 for the public service.

Nevertheless, he reminded that the PPP/C administration, over the years, has been consistent in catering for the needs of public servants, and this year is no different. He added that as the implementation phase of Budget 2020 goes on, the administration will make a determination as it relates to increases in salaries for public servants.

Of the $330 billion being presented, $51.7 billion, representing 15 per cent of the total budget, will be going to health. This includes $14.3 billion for the procurement of drugs and medical supplies.
In the field of education, $52 billion has been set aside, including $1.7 billion for construction and rehabilitation of schools. A further $3 billion has been set aside for housing and $2 billion for the Guyana Water Incorporated.

In addition, $34.4 billion has been allocated to go to the Public Works Ministry, where work will be done on a number of projects, including the Ogle Bypass Road and the East Coast Railway Embankment Road.
The Ogle Bypass Road, according to Edghill, will be worked on as quickly as possible. He noted that the project, funded by the Indian Export-Import (EXIM) Bank, is at the agreement stage.

Members of the Joint Services will also be receiving a two-week tax-free bonus. This, therefore, means that the Guyana Police Force (GPF), the Guyana Fire Service and the Guyana Prison Service will benefit.
The Joint Services previously received a one-month tax-free bonus implemented by the former People’s Progressive Party (PPP) Government, until the measure was discontinued by the former A Partnership for National Unity/Alliance For Change (APNU/AFC) Government back in 2015.
In Budget 2020, there are provisions for a $25,000 cash-per-household distribution drive as a relief package in light of the COVID-19 pandemic.

In addition, the old-age pension will be increased to $25,000 per month and pensioners will receive free water with the overall removal of Value Added Tax (VAT) on electricity and water. It was announced that VAT would also be removed from all medical supplies, not just those related to treating COVID-19 and its symptoms, or even for Personal Protective Equipment (PPE). VAT will also be removed from hinterland travel and cell phones, as well as building and construction materials.
The Government will also be removing corporate tax on private education and healthcare, a measure likely to bring the service costs down.

As part of the budget measures, $800 million has been set aside for the Amerindian Development Fund. This will provide funding to support the socio-economic development of Indigenous communities and villages through the implementation of Community Development Plans (CDPs) the Indigenous communities themselves picked.

When it comes to school children, the Government will also be implementing, effective from January 1, 2021, a $15,000 cash grant for children and a further $4000 uniform voucher allowance.
VAT has been removed from all exports, as well as machines and equipment. Additionally, duties have been reversed on machines and equipment, while tax concessions will be granted for persons operating in the mining, agriculture and forestry sectors.

Persons looking to purchase a used vehicle are also catered for, since the Government will be reversing the ban on importation of vehicles older than eight years, which was introduced by the former APNU/AFC Government back in 2016.

Questions have been raised about how the PPP Government is sourcing the money for such a large budget, considering the fact that the country has been in a prolonged political standoff since 2018, after the passage of a No-Confidence Motion against the former Government.
In addition, the last time a budget was passed was in November 2018. But Vice President Bharrat Jagdeo had explained that the monies comprise funds the Government borrowed, as well as rollover sums.

Statement of Expenditure
Article 219 (3) of the Constitution stipulates: “Where at any time Parliament has been dissolved before any provision or any sufficient provision is made under this Title for the carrying on of the Government of Guyana, the Minister responsible for finance may authorise the withdrawal of such sums from the Consolidated Fund as he or she may consider necessary for the purpose of meeting expenditure on the public services until the expiry of a period of three months commencing with the date on which the National Assembly first meets after that dissolution, but a statement of the expenditure so authorised shall, as soon as practicable, be laid before the Assembly by the Minister responsible for finance, or any other Minister designated by the President, and when the statement has been approved by the Assembly, that expenditure shall be included under the appropriate heads in the next Appropriation Bill.”

In lieu of that provision, Edghill tabled a motion for the House to approve a Statement of Expenditure for the period January 1 to September 30, 2020 to the tune of $183 billion. Those monies, according to the minister, were spent by the former APNU/AFC Administration during a period when they were just supposed to be in caretaker mode.

He told the House that the Granger administration was awarding contractions on the last day of the 2019 fiscal year when they were aware of their status.
He reminded that that APNU/AFC administration fell to a No-Confidence Motion on December 21, 2018. As per the constitutional provisions, elections were supposed to be called within three months, but that did not happen, and Guyana got elections over one year later than the allotted time.
He accused the former Government of breaching all the procurement laws, the Fiscal Management and Accountability Act, as well as the Constitution during their “illegal” reign.

Constitutionality
Meanwhile, while speaking in support of the motion, Attorney General Anil Nandlall debunked Opposition MP Roysdale Forde’s contention that it was his suggestion that the Government bring the Statement of Expenditure to incorporate the monies already spent.

Nandlall noted that the Government has been prepared to table a motion from the inception, but it needed to be done at a time convenient to the Finance Minister. That time, he explained, has to be when the minister tables the Appropriation Bill before the House, so that it covers the gap from the tabling of the expenditures to the passage of the Appropriation Bill.

“Up until the new Government was sworn in on the 2nd day of August 2020, the former Minister of Finance would have been authorising withdrawals of monies from the Consolidated Fund allegedly for the purpose of meeting expenditure on the public service. From the 2nd day of August 2020, the Minister of Finance designated by President Dr Mohamed Irfaan Ali would have continued this process, and indeed, must practically continue this process until the Appropriation Bill is laid.

“It is when that Bill is laid that the Statement of Expenditure of all the monies spent up to that time is then merged into the Appropriation Bill. The Statement of Expenditure cannot come earlier, because monies continue to be spent without appropriation, even during the budget debates and the consideration of the National Estimates,” Nandlall said.

The Attorney General, during the debate of the motion, said Government has always acted in accordance with the Constitutional provisions, while the APNU/AFC administration acted otherwise. He added that the Irfaan Ali-led administration is now trying to steer Guyana back into the harbour of constitutionality.
He added that the APNU/AFC’s objection is not only premature, but is wholly without merit, pointing to the fact that the Speaker had indicated that the Statement of Expenditure will come with the Appropriation Bill, in compliance with Article 219 (3) of the Constitution.

“It is interesting to note that in 2015, in identical circumstances, that is, the elections were held in May and the budget was laid in August of that year for 2015, but they never laid a Statement of Expenditure, and therefore never complied with Article 219 (3) of the Constitution. I confirmed this constitutional violation with the Clerk of the National Assembly, who produced the records, which showed a complete non-compliance with Article 219 (3) of the Constitution in 2015 because of a failure to lay a Statement of Expenditure,” Nandlall charged.

Former ministers David Patterson and Khemraj Ramjattan attempted to defend the spending during the Granger administration.
Ramjattan said that the monies were mainly used for routine payments of salaries. However, this was debunked by Junior Public Works Minister Deodat Indar, who said that the signing of contracts for new works and the withdrawal of billions to loan to GPL does not equate to routine salary payments.
In the end, the motion was carried unanimously and the $183 billion Statement of Expenditure approved.