Ministers Patterson, Bulkan say naysayers ignoring many positives in Budget 2017
Public Infrastructure Minister David Patterson said it is unfortunate that Budget 2017 discussions have narrowed to centre around one or two measures, particularly the Valued Added Tax (VAT), to be paid on water and electricity.
Minister Patterson says that there aren’t “valued discussions on the other measures” contained in the budget that would bring benefits to thousands of Guyanese.
The Public Infrastructure Minister was at the time speaking during a programme, “Budget in Focus’, aired on the National Communications Network (NCN) on Thursday, where he pointed out that because of the provisions in the 2017 Budget, “a small contractor could right now, walk off the road, form a company, immediately get compliance and tender for a job from January 1, but there are no discussions on those things,” the Minister said.
Minister Patterson also noted the measures in place to provide for green energy. “You can set up a company tomorrow…produce your own electricity and have two years’ tax- free holiday. All the equipment is also duty free, so it is quite unfortunate that we allowed the discussions to centre around these two things,” Minister Patterson said.
Minister of Communities, Ronald Bulkan also believes that if the public was to look at the measures contained in the budget, their conclusion would be more optimistic. He noted that “a lot of its measures are directed to allow for and enable a greater take home pay for the ordinary person.” He also pointed out that the Budget invests heavily in education and in health, “two critical areas that impact on the welfare and wellbeing of our people. If we look at the measures in total, and we are objective about the measures in this budget, there is much to be excited about,” the Minister said.
“Of course we all have heard the naysayers out there seeking to condemn the budget. I hear the Leader of the Opposition refer to it as an ominous budget, but I believe that when the impacts resulting from the execution of the measures that are in the budget are felt, that verdict that we would hear from the average person would be a positive one,” Bulkan added.
The 2017 Budget proposes that citizens pay 14 percent VAT on electricity bills exceeding $10,000 monthly, and water bills exceeding $1500 monthly. There has been some outcry about the measures, but Government has noted that about 85 percent of Guyana Power and Light’s (GPL) consumers will be exempt from paying the VAT.
Further, the initiatives are expected to help persons from the lower income bracket whose light and water bills currently exceed the stipulated level, to conserve on their use of these utilities.
Minister Bulkan explained that with regards to the VAT on the water, he has done some calculations. He said that, for the VAT consumption at $1,500 per month, the tariff for someone living outside of Georgetown is about $61 per cubic meter of water and that this, “works out to 12 of those large black tanks per month so if a consumer can keep their consumption at two-and-a-half days for one of those 400 gallon black tanks, then the VAT does not apply.”
The tariff in Georgetown is a little higher and as such, Minister Bulkan explained that for a person living within the town, to keep their utility bill under $1500 per month, they would have to make one of those large black tanks last for four days.
“I do not think that there is any secret that there is a lot of waste of water out there, and whilst it is true that there is this popular opinion that water should be free because it is widely available, it is the delivery of that water, purified and treated that there is a cost incurred,” the Minister said.
He noted that the tariff that is being applied does not cater for the entire production cost and therefore, “it is important that as a nation, as individuals, we begin to practice conservation,” he said.
On the question of the 14 percent VAT on electricity at $10,000 per month, Minister Bulkan also did some calculation and he said, “for the consumers that have a fridge, a washing machine, two fans, a microwave and a television and standard lighting, with the current tariff of $43.43 per kilowatt, their light bill will average $8,500 per month.”
He noted that this speaks to over 85 percent of the customer base of GPL. “It is only the persons who are well off who have air-conditioned, and such would the VAT apply to,” the Minister said.