Joint opposition propose over $26B in budget cuts

Joint opposition propose over $26B in budget cuts

Demerara Waves – April 23, 2012

The parliamentary opposition on Monday submitted proposed cuts amounting to more than GUY$26B from the GUY$192.8 national budget to the consternation of the government.

Notice was given in the National Assembly on Monday ahead of Tuesday’s consideration of the allocations which come under the Ministry of Finance and Office of the President headings. The government called a press conference shortly afterward where it labelled the proposals “extremely alarming” and urged the parties to reconsider.           

The largest of the proposed cuts is that of GUY$18.3B for Low Carbon Development Strategy (LCDS) projects put forward by the APN. The majority of that allocation is to be equity funding for the Amaila Falls Hydropower Project while other projects under that allocation include Amerindian land titling, small and micro-enterprise development and work on the Cunha Canal.  The LCDS projects are expected to be funded by monies realised from the eco-pact with Norway and currently entrusted with the World Bank.

“We are looking to have a dialogue with the People’s Progressive Party/Civic administration in order to bring about certain changes that are in the interest of our constituents.

We feel that this is in the national interest and we are using this as a means of bringing the administration to discuss some broader issues which we feel they are ignoring,” APNU Chairman David Granger said when asked about the justification for that proposed cut Monday evening.

The proposal also appears to enjoy the backing of the AFC which met with the APNU Monday afternoon on their mutual proposals. On the justification for the proposed LCDS cut AFC Chairman Khemraj Ramjattan pointed out that the money is yet to be released.

“We have not as yet gotten the money and that kind of money is only subject to a conditional appropriation; to go fix it in the budget as if we’ve already gotten it is illegal and wrong. We have to propose a conditional appropriation bill under Section 21 of the Financial Management and Accountability Act and the minister apparently doesn’t appreciate what we’re telling him,” Ramjattan stated.

According to the AFC official, they will be making the cut to ensure they are in conformity with the law and both he and Granger indicated that they were united on that front.

Finance ministers Dr. Ashni Singh and Juan Edghill were joined by Prime Minister Samuel Hinds at a news briefing Monday afternoon where they decried the opposition’s proposals and expressed surprise given that talks were underway with the APNU.

“I would hope and I would call on the opposition to reconsider the cuts they have proposed because some of them really, completely defy reason. And as I said last week the parliamentary majority of one must not be used to demonstrate political power,” Dr. Singh said.

Turning to the proposed LCDS project cut the minister stated that the projects go to the core of Guyana’s development and it was therefore “completely incomprehensible” that the APNU would seek to do away with it.

Another cut proposed by the opposition was on the GUY$6B subsidy for the Guyana Power and Light (GPL) with the AFC calling for a GUY$1B reduction whilst the APNU proposes to do away with the entire sum. According to the AFC, whatever could be done with GUY$6B could also be done with GUY$5B.

Dr. Singh pointed out that the subsidy was being given in order to assist GPL to meet its fuel bill and to cushion the effects of the rising costs on consumers.

“Let me say that this is a proposal that runs directly counter to the interests of the electricity consuming public that is essentially the people of Guyana and is in stark contrast to the position they have taken with respect to Linden.”

“Notwithstanding that customers on GPL pay a considerably higher rate I find it astonishing that the APNU would see it fit to propose to deny the GPL customers a subsidy while insisting that Linden continue to enjoy its subsidy.”

An AFC proposed cut of GUY$720M of the allocated GUY$1.34B for the Guyana Elections Commission (GECOM) also left the government seemingly perturbed.

“We have all been clamouring for local government elections for years … we have provided funds in budget 2012 to enable GECOM to execute the local government election, in fact you’d recall that the People’s Progressive Party in our manifesto promised local government elections within 12 months of the 2011 general and regional elections.

It is therefore astonishing that more than half a billion dollars is being proposed to be cut by Alliance For Change,” Dr. Singh said. Local government elections were last held in 1994.

The AFC at a news briefing earlier in the day defended the proposal with Ramjattan saying that they were proposing the cut to avoid the possibility of the government calling snap elections. He added that they are prepared to okay a supplementary allocation should everything be in place for local government elections later this year.

The APNU and AFC also found common ground for budget cuts on the allocations for the state-owned National Communications Network, the Government Information Agency and contract employees under the Office of the President.

AFC proposed that the entire GUY$81.2M subsidy for NCN be cut while it asking for GINA’s to be slashed from GUY$130.4M to GUY$55.4M. The APNU for its part proposed that the capital expenditure allocations for the two agencies be cut with the amounts being GUY$65M for NCN and GUY$15M for GINA.

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