Vincentians should welcome Budget

14.DEC.07

Sometime today (Friday) the House of Assembly is expected to conclude the debate on the 2008 Budget and then adjourn for the rest of the year. The citizenry of this country, having heard the Budget presentation by the Prime Minister and Minister of Finance, the counter to it made by the Leader of the Opposition and the various pros and cons by the other members on both sides of the House, are now left to digest, analyze and come to conclusions as to the value of this Budget to our people.{{more}}

The budget itself continues the trend of the Gonsalves’ administration in offering more benefits to the working people while sustaining its thrust of economic growth and fiscal management. Prime Minister Gonsalves has been bold from Day One of his administration in piloting and implementing counter-cyclical policies. These have not always found favour with the more orthodox economists, and Opposition Leader Arnhim Eustace has not shied away from stinging criticism of the Government in this respect.

There is much for working people to welcome in the Budget. After all, salary and wage increases only meet with a cool reception when they are not deemed to be adequate. In this instance those increases are buttressed by back pay, Christmas bonuses and in the case of some public servants, reclassification, leading to steps up the salary ladder.

We are pleased to see that the Prime Minister is on track to keeping his 2005 manifesto promise of reducing personal income tax and company tax to below 30 per cent at the top rate, with his reduction of these taxes from 37.5 per cent to 35 per cent. With this trend, we hopefully should get to 30 per cent by 2010. Additionally, the VAT was amended by zero-rating and exempting additional items.

One big question in all of this is, “Can we afford it?” The Prime Minister has answered in the affirmative, basing his confidence on the record of his administration and predictions as to continued economic growth. It is his confidence in the sustainability of this trend, as well as the need to improve the quality of life and give incentives to investment, which justify these,

is his claim. Not so, claims a questioning Opposition, charging fiscal recklessness, statistical manipulation and pointing to the mounting public debt.

The latter is certainly an area of concern, but to be fair, one which is acknowledged by the Government. Debt servicing is a drain on the economies of most developing countries and it is therefore imperative not only that sufficient funds are generated to serve the debt, but that they are kept within manageable proportions, and we always bear in mind the nature of the debt itself and whether it contributes to economic growth and development.

Even as we congratulate the government on its achievements and successes in keeping the ship of state both afloat and on course, we must urge a renewed commitment on the part of all sectors, irrespective of political biases, to ensure that the path of economic and political stability is maintained and that the benefits of progress redound to all.