Independent - September 06, 2000
By Raffique Shah
At first glance, and certainly listening to Finance Minister Brian Kuei Tung's "press the right political buttons" (as ex-Finance Minister Selby Wilson put it) at critical points during his Budget presentation, the Government's 2000-2001 expensively-wrapped fiscal package appeared to be very people-friendly. From pensioners to errant taxpayers, there were goodies for many and no new, punishing taxes imposed on any sector. In short, it was the near-perfect pre-election Budget.
Let me first give praise where praise is due: while he has been criticized for his bikini-style presentations ever since he became Finance Minister under the UNC Government, I, as an ex-parliamentarian who was subjected to four-hour Budget speeches by the late Dr Eric Williams (most MPs, even some on the Government side, often drifted to sleep), welcome Kuei Tung's shorter presentations. Not that I listen to them. I have long stopped listening to Budget speeches since I find them so loaded with clever financial footwork and vague references to the true state of the economy, I prefer to have the Lloyd Bests of the society study and translate them for lesser mortals like me.
Clearly, though, the Government's removal of the regulations that compelled salaried workers (wage slaves, I brand us) to file income tax returns with the Board of Inland Revenue was probably the most positive feature of the Budget. I have always found it cumbersome to be forced to file this complex form year after year. After all, what is important is that we all pay taxes in accordance with our incomes (or revenues/profits in the case of the business sector), and salaried employees, if anything, end up paying more than they ought to. To compound their woes with this stupid annual exercise was not only a waste of time and money, but frustrating people in the extreme.
A warning needs to be sounded, though, with respect to the liberalising of the taxation system. Government's biggest source of tax revenue (outside of royalties from the oil sector) has, over the years, come from this captive sector. As the minister noted in his presentation, there are numerous businesses that perennially claim losses or very marginal profits (hence they pay no taxes) that not only continue operations, but their owners prosper. A similar situation obtains among professionals. If, by freeing up BIR officers from behind desks where they labour through tonnes of pink forms, the department is able to put more people in the field to monitor businesses, especially the seemingly small ones that net their owners ten times what average salaried workers earn, but who pay no taxes, that would be a quantum leap in both government revenue and levelling the taxpaying field, both of which are long overdue.
I shan't delve into the "goodies" part of the Budget. Pensioners are obviously thankful to the Basdeo Panday Government for raising their monthly pittances from $356 a month to $720 over the five years he has been in government. The few thousand people who receive public assistance must be also happy for the increases they got, although all of them, unless they have other sources of revenue, will continue to battle for survival below the poverty line.
People with savings in banks must be pleased with the relief they got, although I believe it is criminal to tax (hence punish) people for doing what is best for the economy-saving a little for financially rainy days. The griping by the business sector over the "burden" of being responsible for tax deductions from their employees is difficult to understand: isn't that what they've been doing all along? And the so-called "Green Fund" looks like little more than having fun with the environment.
On the other side of the coin, though, one must agree with critics who argue that many aspects of the Budget are meaningless. In fact, what the minister left out (these vital data may surface during the debate) may have been more important than what he included. The first point is that ever since the UNC Government assumed office, oil prices have been good-to-great. This is the first government since Eric Williams's (1973-80) that has enjoyed generous windfalls. Interestingly, it is also the second to carry the "corruption" tag, which seems to coincide with buoyant oil prices. All the administrations in between-George Chambers's, Ray Robinson's and Patrick Manning's-had to cope with low oil prices, hence steep cutbacks in revenue, forcing them to resort to the IMF and all the ills that flowed from being indebted to that monster.
So to crow about how well the Government has managed the economy, about how our foreign reserves have doubled since 1995, about the inflow of foreign investment and the creation of 60,000 jobs, while these may be factual, they do not give the true picture. Because if, by turning the taps, Saudi Arabia and Venezuela were to send prices plunging tomorrow, Kuei Tung's projections could all end up going awry. And the minister's admission that most of these jobs were created in the non-oil sector raises another issue. Yes, maybe 40,000 young people are employed in manufacturing, retail trade and the hospitality sectors. But at what level of wages, Mr Minister? It is well known that almost all these employees are paid the stipulated minimum wage (which has become the maximum wage), which in turn means they exist well below the poverty line.
Even in the construction sector, wages have dropped to abysmal levels: check out the Carillion workers, or those who work for contractors who are raking in profits but refuse to pay their employees decent wages. This reality, when linked to the number of people who are unemployed or under-employed, tells a story quite different to the postcard picture of prosperity painted by the minister. I repeat what many have said before: the rich-poor gap is widening faster than ever, opulence sits side-by-side with destitution, and conspicuous consumption by a few cannot cover the hunger that pervades paradise.
And this is but one of the anomalies of our economic prosperity. The Finance Minister made no attempt to address these questions, except by citing nebulous numbers and drawing questionable conclusions. Space does not permit me to probe some other murky areas (for example, is it true that our per capita debt is now over $20,000 as opposed to $14,000 in 1995?). To the average person, and moreso to supporters of the UNC, it was a great Budget. But when one explores it, when one delves into the harsh realities of life in Panday's paradise, it could well be a case of an illusion of prosperity in the face of impending economic calamity.
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