FITUG 2018 Budget proposals

The 2018 National Budget – FITUG’s views and suggestions Introduction The Federation of Independent Trade Unions of Guyana (FITUG) is pleased to have the opportunity, once more, to share our proposals regarding matters that the Government of Guyana should pursue through its 2018 National Budget. We must express too, at the outset, our disappointment that many proposals we have advanced through such previous interactions were not taken on board by the Administration. We nevertheless look forward that our reasonable suggestions will be fully considered and evaluated and are included in the 2018 National Budget.

The FITUG, as it has said before, views the National Budget as the most important policy statement by the Government in a given year. It is a statement, which in our view, sets out the course the Administration is intent on taking our people now and in the immediate future as well. It also provides a good barometer of what is the state of our country and people and it is a useful gauge in determining the State’s responsiveness to the people’s expectations and the realities of our time.

We of the FITUG recognize that the Budget will once again be presented before the commencement of the fiscal year. That, therefore, means that the full 2017 economic picture will not be known at the time of its presentation. While seemingly good on paper, we believe, that in the absence of a robust and timely system of national statistics, this could very well lead to improper analysis and incorrect inferences being drawn. And, on this score, we caution our policymakers to tread carefully and utilize realistic assumptions in identifying targets and in setting goals.

In considering our submission regarding the 2018 National Budget we took into account the Government’s stated objective of providing “A Good Life for All Guyanese”. In our view, the “Good Life” will see all Guyanese living a life in which they have secure, decent employment; one in which they own their own homes and have access to affordable transportation and/or own vehicles; one that that will allow them to fulfill their children’s educational goals and career desires; one that allows them to live in safe and secure communities; one that makes it less likely to succumb to migratory pressures and taking away, oft times, their valuable and needed skills, and one that allows them to have sufficient income for/in their retirement years.

As we reflected on the 2018 National Budget, FITUG took into account that while positive economic growth has continued to be recorded, we recognized that it is Page 1 of 7

about half from what it was a few years ago. In an environment of slowing growth, we hold that the working-people and their families stand to be the most affected.

Experience has thought us that they are often hardest hit through unemployment, reduced employment and benefits, declining real incomes, under-employment, exploitation, and a lower standard of living, among other things.

Taking all of these factors into account, we wish to share the following suggestions for inclusion in the 2018 National Budget:Investing in our people Though the Government has continued in the tradition of significant allocations to the ‘Social Sectors’, we must express our consternation that from our interactions with the people these large sums are not reaching them. Far too often, we read and hear about the absence of critical and essential drugs at the public health institutions; the poor and sometimes dilapidated state of our public schools, health centres, hospitals; the lack of critical and necessary equipment and/or manpower; the need for our workers to fork out significant sums for extra lessons in order to give their children a better chance at life; to take loans or empty out their savings in order to obtain private medical care; the absence of safe, potable water in many communities, to cite a few examples.

Here, the Government is urged to re-look at its systems to ensure that it gets true value for the people’s monies which they rightly should benefit from. The centralization of tasks, where it is prudent, should be examined to benefit from economies of scale and greater efficiency. The use of technology can be a great aid in reaching such feats. In the education and health sector, especially, we believe there is need for a robust maintenance programme and measures to ensure the expenditures put in the critical sectors that we benefit from.

Protecting our patrimony – safeguarding our physical and mineral wealth Our country is blessed with arable land, fresh water and several mineral resources.

These resources which form our patrimony have been protected by previous generations and belong to all Guyanese now and in the future. We, therefore, must exercise great care and caution in the use of our resources and ensure that their exploitation and utilization are in the interest of our people presently while keeping an eye on future generation’s needs.

On this matter, we seek the Government to promote transparent arrangements in allocating and/or licencing the exploitation or use of our resources. For instance, we are completely unaware of the agreement and our responsibilities and rewards Page 2 of 7

linked to the extraction of oil in our country. Similarly, we are unaware of plans for a Sovereign Wealth Fund (SWF). These are important matters which concern every Guyanese and urge that the State, through the Budget, provides clear and unambiguous positions. We also call to the Government to ensure strong and stringent environmental regulations which promote minimal environmental impact and protection of our biodiversity.

Improving our people’s standard-of-living and their well-being The improvement of our people’s lives has to be the greatest concern of the Administration. Now-a-days, for too many of our people, their lives have been upset for a number of reasons. Today, the working-people and their families are confronted with ever rising cost-of-living, threats of joblessness, increased taxation, among other things.

Here, the FITUG seeks that the Government positively considers: Increasing the income tax threshold to $100,000 per month;  Introduction of tax relief for taxpayers with dependents;  Removing the 1/3 tax threshold for income earners who earn in excess of $180,000 per month and having a second tax tier set at $250,000 per month at a chargeable rate of 40 per cent;  Removing Value Added Tax (VAT) on electricity, water, private health care and private education;  Widening the income tax base by capturing several high income earners, and  Re-looking at tax exemptions and write-offs provided to private enterprises.

We urge that such exemptions/write-offs be predicated on job creation and aligned with national development goals We hold greater tax relief to workers will spur demand and through the income multiplier effect will redound positively to the economy lending to improved job prospects, higher taxes, and improved standard-of-living and greater confidence, among other things.

Protecting the vulnerable and elderly The State has an obligation to protect the poor and vulnerable in our society. This is a responsibility that should not be shirked from as we seek to reduce/avoid impoverishment in our midst. The economic realities of our times have seen too many of our people finding themselves in difficult circumstances. Just recently, we

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saw Minister in the Ministry of Social Protection alluding to the realities which beset the elderly and the single mothers in the security industry.

On this score, we seek that the Government positively considers: Increasing the rate of Old Aged Pension to $30,000 per month;  Reintroducing electricity and water subsidies for Old Age Pensioners;  Utilizing the Government school buses, when not transporting students, used to transport pensioners to uplift their pensions and to visit hospitals, health centres, etc;  Examine a workable system to allow a person authorized by the pensioners to uplift their books at the distribution centres;  Examining the introduction of 24-hour state-operated day care for single parents, and  Improving the rate of public assistance from $7,300 to $12,000 The sugar industry The importance of the sugar industry cannot be underscored or diminished in anyway. Its contributions are wide and varied and, in our view, there is simply no replacement at this time. Against those thoughts, FITUG reiterates its view that the plans which will further the miniaturization of the industry is not in the interest of our people, the economy and the country. We strongly call on the Government to seriously re-examine its plans especially given the sad reality of Wales. Regarding the sugar industry, we seek: That the Government holds its hands on all plans to close and sell out estates and to engage the Unions, the business community and all other stakeholders in a serious discussion on how the difficulties of the industry could be resolved;  We call on the Government to pursue, with the involvement of all relevant stakeholders, a socio-economic study of the sugar industry. FITUG strongly believes that such study is an important pre-requisite in considering the future of the sugar industry;  We seek that Government receives and shares publicly a full explanation from the Management of the Guyana Sugar Corporation Inc (GuySuCo) regarding the support it has been providing to the industry in recent times. It is difficult for FITUG to fathom that given the vast sums invested that the industry’s production continues to slide; Page 4 of 7

 We seek that the Government, in keeping with its Green Economy objective, whether through self-financing or public-private partnerships, realizes the establishment of bagasse co-generation plants to provide renewable electricity to the national grid in the interest of reducing living costs and spurring industrialization. The Skeldon plant has shown the value of such an investment, and  We seek that the Government repatriate, over time, the full sums provided by the sugar industry as Sugar Levy paid between 1976 and 1996 as well as the full disbursements received by the Treasury through the European Union (EU) Accompanying Measures programme.

The special situation of Wales Several hundred workers and cane farmers together with their families and the wider communities are confronting difficult times and miserable lives following the closure of Wales estate, some nine (9) months ago. Now-a-days, the villages have taken on a ghost-like appearance with almost no activity taking place.

Alongside the depressing state, increased criminal activity and other anti-social behaviour is being recorded; there is heightened begging and children’s education is threatened and, in some instances, had to be curtailed. We are also aware that some homes have broken up. Such an environment is not in the interest of any one, especially the youth.

Despite the very much touted plans by the Guyana Sugar Corporation Inc (GuySuCo) to engage in non-sugar diversification in an effort to breathe some life into the area nothing is being done aside some a small experiment with seed paddy cultivation. We of the FITUG are particularly worried what would happen in the coming weeks and months if the situation remains as is.

From our point of view, special attention needs to be paid to halt the already troubling state and we urge the Government to consider implementing: An income support mechanism to ensure families can meet their obligations and send their children to school, among other things;  Introduction of school bus services to transport all school-aged children from their homes to school and vice-versa  To establish an enabling mechanism to promote investment in the area with a view to spur job creation;

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 To establish skills training programmes to allow the former sugar workers and the youth to receive skills that are demanded by the labour market and matching them with available vacancies, and  To provide social counseling and other social programmes to assist in reducing depression and other social anxieties that have gripped the people.

Supporting workers organisations – promoting equality in society Many studies have concluded that countries with higher levels of unionization have higher income equality and better standards-of-living. Such studies have confirmed the important role trade unions play in ensuring happy and stable societies.

Undoubtedly, it was in recognition of such factors that the State has granted trade unions tax exempt status. For us, it is, therefore, disappointing, that our work has been stymied since many Unions are unable to afford vehicles or in some cases do not have a sufficient complement of vehicles. The work of trade unions is spread throughout the length and breadth of Guyana and the possession by Unions of vehicles are critical. On this matter the FITUG must, again, represent that the Government amends the necessary legislation to ensure that Trade Unions benefit from duty-free concessions. This was a benefit that unions enjoyed until it was withdrawn a few years ago.

Another important element as we pursue our noble task revolves around the training and education of workers. Far too many workers are out at sea when it comes to their rights, benefits, responsibilities, and obligations. We recognize that the Government has taken note of this situation and approved a subvention to unions for such work. It is disheartening that despite satisfying the requirement set out by the Ministry of Social Protection, some unions have not been able to access the allocated sums, though they engaged in training activities which utilized scarce union funds with the hopes of being reimbursed. We seek that the Government seeks to correct this sad situation. Alongside this we also seek that the Government considers positively, through the 2018 National Budget, that the subvention be increased to $750,000 from $500,000 per annum in order to further our educational work.

Improving efficiency – releasing resources for the people FITUG recognizes that finances are finite and, therefore, a delicate balance must always be struck in meeting needs and wants. We hold too that our proposals are in the interest of the Guyanese working-people and are strongly needed at this time.

The Federation recognizes, too, that Government needs to examine the way to deliver its functions in order to promote an efficiently functioning bureaucracy.

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Better allocation and more proper utilization of resources could also be reached through consolidation of services across the Government in an effort to save monies which could be better spent in other deserving areas.

The FITUG urges that the Government looks at the utilization of technology, as far as practicable, in delivering state services. The reduction of paper work, need for voluminous files and associated equipment and accessories could be greatly reduced and lend to greater efficiency at the same time. The reduction of paperbased transactions also reduces our environmental footprint.

The Government should consider actively the consolidation of services such as printing and stationary, refuse collection, vehicle maintenance, public relations, computer purchasing, servicing and maintenance, and other such ancillary functions and services in specialized Government departments or through tendering to capable and reputable agencies.

Our list is by no means exhaustive but provides, we believe, a good road map for the Government to pursue in reducing wastage and inefficiency.

As our proposals indicate, we of FITUG are hopeful that rhe 2018 Budget will be a people-centered one and will embrace measures that will alleviate the hardships and better the lives of our pensioners and working-people and their families as well as see the steady development of our country.

September 18, 2017

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