National Budget 2024: GPSU’s Preliminary Comments

The Guyana Public Service Union (GPSU) at a joint session of its Administrative Committee, Industrial Relations and Economic Standing Committees of the Union examined Budget 2024 and do make the following preliminary comments;

Despite Guyana has been experiencing significant economic growth due to the discovery of vast oil reserves, and the resulting impact of other sectors in the traditional economy, this growth has not been evenly distributed, and poverty and income inequality remain pressing issues. The rising cost of living has also been a concern for many especially the poor and vulnerable, as inflation and the increasing prices of essential goods and services have outpaced wage growth.

Guyana’s per capita GDP now stands at USD$ 20,960 more than three times what it was in the year 2020 and even surpassing the per capita GDP of Barbados, Trinidad and Tobago, and Jamaica. The per capita GDP is a measure of the average economic output per person in a country. It is calculated by dividing the country’s total GDP by its population. It is often used to assess the standard of living and economic well-being of a nation’s residents.

In accordance with the aforementioned one can safely conclude that income inequality remains a sore issue since the nation’s wealth continues to be unevenly distributed. The national minimum wage is amongst the lowest in CARICOM amid Guyana’s expanding landscape and its growing regional influence.

In the 2024 budget, to tackle poverty and the rising cost of living the Government of Guyana has outlined certain key areas of focus, including infrastructure development, education, healthcare, and social protection. The budget proposes the following measures:

Social Protection: The budget aims to expand social protection programs, such as cash transfers and subsidies, to reach more vulnerable populations. This includes increasing the coverage of the Social Protection Network (SPN) and providing targeted support to low-income households, the elderly, and people with disabilities.
Education and Human Capital Development: The government plans to invest in education by increasing the allocation for the Ministry of

Education. This suppose to include improving access to quality education, particularly in underserved rural areas, and enhancing vocational and technical training programs to equip citizens with the skills needed for the evolving job market.

Healthcare Improvement: The budget proposes to enhance the healthcare system by increasing funding for the Ministry of Health. This include expanding access to primary healthcare services, upgrading healthcare facilities, and improving the overall quality of care.
Infrastructure Development: Investments in infrastructure, such as roads, bridges, and ports, are expected to create job opportunities and stimulate economic growth. This, in turn, could contribute to reducing poverty and improving the overall standard of living.
Energy Sector Development: The budget highlights the importance of the energy sector, particularly the expansion of renewable energy sources, to support the country’s economic growth and reduce energy costs for citizens.
While Infrastructure Development, Energy Sector Development, Improvement of Health Care, Education and Human Development, could be considered as transformational, these measures are not aim to seriously address poverty and the rising cost of living in Guyana, the 2024 budget falls short in several aspects:

Insufficient Allocation for Social Protection: the proposed budget does not allocate enough resources to effectively tackle poverty and the rising cost of living. The government should have increased the allocation for social protection programs to ensure that the more vulnerable populations can benefit from these initiatives, realistically in the prevailing economic environment. One off cash grants, the because we care cash grant, are used for consumption purposes and does not address the issue of the rising cost of living, inequality and poverty. Perhaps measures that could have better help the working poor and the poor and vulnerable population includes,
I. An increase in the income tax threshold of more than 100,000

II. A reduction in PAYE. The income tax rate should be reduced to 10% on the first taxable $200,000 and 20% on the balance of taxable income, instead of the current methodology of 28% and 40%.

III. A reduction in excise taxes on essential items, in extension to the reduction of excise taxes on oil

IV. Increase in public assistance and old age pension should be adequate enough to lift this vulnerable population out of poverty

V. A reduction of the Value Added Tax (VAT) to ten percent (10%).

VI. Improving conditions of service and paying the working class a livable wage

Weak Emphasis on Job Creation: While infrastructure development is expected to create job opportunities, the budget should have placed more emphasis on job creation through targeted initiatives, such as support for small and medium-sized enterprises (SMEs) and entrepreneurship programs. In addition, as a priority emphasis should be placed on the retention of skilled human capital ensuring enhanced and modernized job conditions, adequate and competitive remuneration in the prevailing job market for such skills.
Inadequate Attention to Environmental Sustainability: With the rapid growth of the oil sector, concerns have been raised about the potential negative environmental impacts on Guyana’s fragile ecosystems. The budget should have allocated more resources to environmental protection and sustainable development.
Education and Human Capital Development: Ensuring that access to quality education, vocational and technical training programs is feasible and conducive to equip citizens with the skills needed for the evolving job market. Further, the allocations to the University of Guyana are inadequate and fails to provide accessible and a modern class room system. The GPSU reiterates its call for free education across all University of Guyana Campuses.
In conclusion, Guyana’s 2024 Budget will not address poverty and the rising cost of living through increased social protection, education, healthcare, infrastructure development, and the energy sector, since it falls short in several areas, including insufficient allocation for social protection, lack of focus on rural development, weak emphasis on job creation, and inadequate attention to environmental sustainability. To effectively tackle poverty, the rising cost of living, and address a living wage, the Government may need to reconsider its budgetary priorities and allocate more resources to these critical areas.