Who Gets What? - 1999 Budget Measures

In this section we consider how the budgeted expenditure is allocated among competing ministries, departments, programmes and projects.

Central Government's current expenditure for the year is budgeted at G$22.174Bn which is 12.58% above revised 1998. The following table shows how the current expenditure is to be shared among the major ministries. Expenditure comprises of employment costs and other charges.

The ministries / departments with the most significant budget allocations are:

The Ministry of Trade, Tourism and Industry has been allocated G$151.1M or 0.7% of Central Government current non-interest expenditure.

The Ministry of Culture, Youth and Sports introduced in 1998 has been allocated $215.3M or 0.9% of total budgeted expenditure. The Ministry of Housing and Water also established in 1998 has been allocated $751.5M or 3.4% of budget.

Significant changes from the previous year latest estimates occurred in the following Ministries / Departments:

 Of the budgets for the regions significant increases have been projected for the following:

Central Government's estimates of capital expenditure for the year are budgeted at G$12.787Bn which is 1.9% below revised 1998 and 28% of total 1999 expenditure. The ministries / departments with the most significant capital expenditure allocations are:

Education and agriculture show significant increases whilst Finance and Public Works have large decreases. In absolute terms the Ministry of Public Works is budgeted to spend $3,625.6M or 28.4% of the Capital Budget although this reflects a 22.8% decrease over the previous year.

Of the Ministry of Public Works budget $938.8M is allocated to sea defences including $350M for emergency works. In addition the budget includes $345 for the reconstruction of the Charity/Supernaam road, $854M for continuation of works on the Mahaica/Georgetown/Linden roads and $366M for the rehabilitation of the Soesdyke /Linden highway.

A significant increase in capital expenditure is projected for the Ministry of Health, from $66.5M in 1998 to $203.8M in 1999 of which $119.8M is earmarked for the provision of technical assistance. A significant increase is also projected for Office of the President, from $367.2M in 1998 to $1034.7M in 1999 of which $340M is for El Nino Emergency Rehabilitation, $258.7M for Public Administration Project, $216.5M for completion of Moco Moco hydro-electric station and distribution network.

 Ram & McRae's Comments

It is now over two years since we have been promised a reform of the tendering process, which is widely viewed with suspicion. It is instructive to note that only in areas involving capital spending does Government seem to achieve a high success rate.

Poor countries with limited resources need to do more to derive value for money. The possibilities for higher efficiency are enormous and should be explored.

Even after the establishment of the Tourism Board, the allocation for the Ministry of Trade, Tourism and Industry appears too low to catalogue tourism as a serious contributor to the economy.

The budget estimates reflect a decrease of $1,278M or 77.5% in employment cost at the Ministry of Finance although there was an increase in the number of employees.

We believe that this could have been caused by charging retroactive payments for other Ministries to the Ministry of Finance.

• No new taxes in 1999.
• The personal deduction remains at $18,000 per month.
• Increase in the annual depreciation rate on electrical equipment including computers.
• Increase in the property tax threshold for both individuals and corporations.
• Rates of income, corporation, capital gains and property tax are unchanged.
• Ceramics, Sanitary Napkins etc. to be added to the list of industries to benefit from accelerated allowances.

The rate of depreciation on electrical equipment including computer equipment has been increased from 20% to 50%.

The tax-free ceiling on net assets has been increased from $5.0M to $7.5M for individuals and $0.5M to $1.5M for companies.

In addition individuals are not required to file a property tax return unless their net assets is in excess of $1.5M. Previously this limit was $0.5M.

In order to attract investments in non-traditional industries entities engaged in the production of ceramics, sanitary napkins etc. will be added to the list of industries which qualify for capital allowances under the Income Tax (In Aid of Industry) Act.