Eustace: Budget devoid of significant proposals

The 2009 budget has been described as a huge disappointment by Opposition Leader Arnhim Eustace.

While Prime Minister and Minister of Finance Dr Ralph Gonsalves described what was his eighth budget, as a “people’s budget,” and a “Budget fit for the challenging times,” Eustace claims that it was a budget “devoid of significant proposals.”{{more}}

According to Eustace, Vincentians will be worse off in 2009, because the budget doesn’t present any hope.

He again used the opportunity to call on government to re-think the situation with the implementation of the Value Added Tax (VAT), calling for more basic food items to be zero-rated.

Eustace said that while the tax threshold has been adjusted upward, the very poor, who do not pay taxes, will not benefit from this measure, saying that his proposed VAT adjustment will better serve these people.

He said that while the high inflation and rising food prices are linked to external factors, one of the causes is the VAT placed on the items.

“The VAT is the culprit…you can’t call yourself a government of the poor, a labour government, and treat the same people so,” Eustace said.

Eustace said that the zero rating of more basic food items, which he believes will cost the government about $6 million in VAT revenue, can be recouped if government suspends or cancels some projects earmarked in the budget.

He referred to $4 million set aside for the purchase of a residence in New York for the Ambassador to the United Nations and money set aside for the improvement of security at the Prime Minister’s office and renovation of the Prime Minister’s residence as projects that can be deferred to make up for the lost revenue from VAT, if government follows his recommendations.

Commenting on the agricultural sector, Eustace lamented the decline in the Banana industry, but said he understands that that industry has been experiencing a gradual decline over the years.

Eustace, however, said that he believes that the agricultural industry on a whole has a crucial part to play in the country’s development; for food productivity and export.

He called on government to look into better marketing of the local produce on the European market.