November 2, 2002
Trinidad and Tobago and Barbados have introduced their budgets for the years 2003. In both cases the Prime Ministers, Patrick Manning and Owen Arthur respectively, hold the finance ministry portfolio, evidence of the important regard in which that responsibility is held.
Interestingly, both budgets provide for tax relief. In Trinidad, budget proposals include a 5% reduction in corporation tax for non-energy companies (no relief for oil or gas companies, indeed Mr Manning has recently expressed dissatisfaction with the terms offered by the international consortium that is proposing a massive expansion of natural gas production and has threatened to squash the deal), a 3% cut in income tax, tax deductions for credit union savings, a tax deduction of TT $10,000 a year for five years for first time home owners, and the removal of VAT on medicines. In Barbados, in an effort to stimulate the economy which is expected to decline by about 1% this year but return to 2% growth next year, Mr Arthur has proposed a reduction of the basic rate of income tax from 25% to 22.5% with a further reduction to 20% from 2006. Corporation tax will be cut by 1.5% and reduced to 25% by 2006.
In his record TT $20 billion (G$600 billion) budget Mr Manning outlined plans for the ailing sugar industry. He announced increased expenditure on education (12%) and health (10%). US $50 million will be invested in tourism development in Tobago. He said an Anti-Kidnapping Prevention Bill and a Terrorism Prevention Bill would be presented to Parliament as well as legislation to substantially increase the penalties for offences relating to corruption by persons in public life.
Mr Arthur said Barbados' return to growth depended on increased tourism (it had fallen off since 9/11), continued growth in manufacture and agriculture and an increase in private and public investments in tourism and transport projects. He pledged to return the fiscal deficit to around 2.5% of GDP (5.1% is forecast this year). He also spoke of a new range of concessions and laws to offer the boating and yachting community an improved and welcoming environment. Barbados has been a model of fiscal and financial rectitude and has made the most in a pragmatic way of its slender natural resources.
It will be good if Guyana can gradually return to those distant days when budgets were presented in a timely manner. There have been serious difficulties in recent years for a number of well known reasons but it would be a good idea for the Minister of Finance to start setting himself targets for earlier budget presentation. There has been considerable improvement in the preparation and auditing of public accounts under the stewardship of Auditor General Anand Goolsarran, now on a one year assignment elsewhere, and an earlier budget will help in a number of ways, especially by marking a return to a higher standard in the conduct of public affairs.