Private Sector Commission

November 29, 2017 Press Release We can all agree with…

November 29, 2017
Press Release

We can all agree with the fundamentals set out in the Minister’s speech on which the Budget must focus and the targets it sets out to achieve: “fostering higher growth for more and better jobs;… investing in skills development; investing massively in infrastructure; doing more to facilitate business; stimulating growth and employment in the productive sectors and supporting micro, small and medium enterprises”.

There are of course other fundamentals that this budget should be addressing: the reallocation of resources, the reduction of inequality in income and wealth; ensuring economic stability; the management of public enterprises; reduction of regional disparities.

The question is to what extent has this budget addressed these fundamentals?

It is too early for the Commission to offer a comprehensive analysis on the Budget, but we can legitimately ask whether this Government’s Budget is committed, in real terms to the vision it speaks to “of improving the quality of life of its people”.

We recognize that the measures in the current Budget will have a positive impact on local businesses, however, we believe that this Budget is distinctly absent those measures necessary to sufficiently reverse the negative impact of the measures in the 2017 Budget. For instance: the change of the tax policy from zero rating to exempt and standard rated goods and services, the VAT on electricity, the VAT on agricultural and mining machinery and inputs.

We are disappointed that there is no clear policy enunciated for addressing a projection on the level of corporate taxation based on which the business community can reasonably plan future investment, a recommendation that we had urged the Minister to embrace.

We complement the Minister on the monies allocated to education. But, we urge the Minister to put in place systems to ensure an adequate return on this investment and that these monies result in the acceleration of human development.

While the Budget recognizes that “the challenges faced by the public health sector are many” and, by the Minister’s own admission, point to the shortage of drugs and problems of procurement, we have searched for a policy to address the shortcomings.

We note that, with regard to energy, the Budget, consistent with Government’s long expressed position, has, all but abandoned the Amalia Falls Hydropower Project, advancing a mix of energy projects, but offers no clear indication of the cost of investment in the energy mix and the future cost of energy per kilowatt hour.

Oil and Gas is around the corner. We would expect this Budget to have devoted a great deal more than seven paragraphs to the preparation of our country for an event which will hugely transform the future of the nation. It is obvious that our Government should already be engaging the services of industry experts to negotiate and engage, as equals, with the multinationals such as Exxon. The budget is, however, peculiarly silent on this need to build our capacity.

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