Doubts about Government respecting the budget non-approvals

The mixture of surprise and relief when Dr. Ashni Singh, Minister of Finance announced in the National Assembly that he would be amending the 2014 Appropriation Bill to reflect the non-approval by the Committee of Supply of several items in the 2014 National Budget has given way to skepticism, suspicion and speculation. Of the six Programmes not approved, two are under the Office of the President, one under the capital budget and the other the current budget. The full list is:

Among the projects or entities affected by non-approval were the usual suspects, the Government Information Agency (GINA), (previously referred to in the Estimates as Guyana Information Agency), National Communications Network (NCN), the Specialty Hospital and the Information Technology Project funded by the Chinese and way, way behind schedule. Mildly surprising were the Chinese-funded Airport Project and the Amaila Falls Hydropower Project, both of which in earlier appropriations by the National Assembly had received some support of the parliamentary opposition, albeit under some rather interesting circumstances.

Pork and collateral damage
The non-approval of the capital budget of the Ministry of Amerindian Affairs targeted proposed allocation of $1,100 million, described in the Estimates as provision for Amerindian development projects and programmes. When the window was opened on the projects, it melted like fat from pork exposed to the sun – it was for uncontrolled vote-buying in the Amerindian communities, with practically nothing to do with capital expenditure. Not surprisingly, none of the PPP/C Ministers seemed in the least bit embarrassed at being caught red-handed, even as they bussed some bemused Amerindians to picket the National Assembly! Collaterally, $42.5 million for water and land transport and acquisition of furniture and equipment under the Ministry of Amerindian Affairs was also not approved.

Several other programmes fell victim of collateral damage. These include:

– on the current side, the annual subsidies to the following agencies falling under the Office of the President: Guyana Office for Investment ($119.8 million), the Integrity Commission ($17.1 million), Office of the Commissioner of Information ($28.5 million), Office of the First Lady ($10.0 million), and Presidential Guard Service ($254.5 million); and on the capital side GNEA ($10.0 million), Civil Defence Commission ($24.0 million) and GO-Invest ($10.0 million).

– under the Ministry of Public Works the victims were the Hinterland/Coastal Airstrip rehabilitation Project ($185 million) and Institutional Strengthening – Civil Aviation ($50 million); and

– irony of ironies, the Ministry of Finance capital budget suffered from non-approval of $725 million for a Poverty Programme, the (UG) Student loan Fund ($450 million), Stats Bureau ($10 million dollars), the CDB funded Basic Needs Trust Fund ($795 million) and the Guyana Revenue Authority ($375 million).

Planting cane in red ink
The surprises at some of the non-approvals were probably matched by some of the items that were approved. The state-owned Guyana Sugar Corporation, an entity with no board of directors, a history of violations of the law requiring the publication of financial statements, and a future awash with red ink, was given a further $6,000 million as a subsidy for 2014; the Commerce, Industry and Consumer Affairs Ministry was allocated $1,000 million for an as yet undefined programme to support enterprise development initiatives while the Ministry of Finance got a pass on an allocation of $4,408.8 million for unspecified Other Employment Costs, a re-designation of the line item previously described as Revision Of Wages and Salaries.

GuySuCo placed the opposition on the horns of a dilemma: while they knew the money would continue to finance poor governance, lack of accountability and a hopelessly managed and structured entity, the parliamentary opposition, and mainly the Alliance For Change, could not dare to not approve the budget provision for the sugar corporation. No one it seems was prepared to say to GuySuCo no more money until it accounts for what the Assembly had given it in prior years. And that if the country is going to drain money into GuySuCo, use at least half of that money to pay severance for a few thousand workers and allow them to pursue other employment of their choice and the rest for a serious restructuring of the industry. In two to three years we could have a streamlined, profitable enterprise.

Revising the line item
The APNU on the other hand, while it harbours legitimate doubts about the spending of previous multi-billion dollar allocations for Revision of Wages and Salaries, would have found itself at the mercy of the government propaganda machinery – GINA/NCN – if it had dared to not approve the line item for Other Employment Costs. APNU’s problem is that it knows that some part of the allocation will go to revision of wages and salaries of public sector employees, the majority of whom it may consider supporters. With public moneys being shuffled with the dexterity of the three-card trickster, APNU could not say which part.

APNU with its perceived emphasis for a stronger and more effective Police Force should probably explain why it would approve a twenty-fold increase in the capital allocation for Community Policing while the Police Force receives a reduction under the same budget. And the allocation for Enterprise development initiatives without a clear institutional mechanism and criteria for accessing these funds defies all logic, economics and the Fiscal Management and Accountability Act. Such considerations have never been paramount in the spending of public moneys. Politics, with a capital P three times is all that seems to matter.

In addition to the allocations referred to above, there still remains in the 2014 Budget a lot of fat and one has to assume that the thirty-three opposition members of the National Assembly lost concentration or commitment when the items came up for concentration. Dr. Frank Anthony and Minister Irfaan Ally must be smiling at the amount of funds at their disposal for their discretionary spendthrift ways.

Appearance of balanced budget a mirage
For all the surprises at the various estimates that were approved and not approved, perhaps the biggest surprise of all was that Dr. Singh did not hesitate to give the National Assembly the undertaking that he would present an amended appropriations bill to reflect the decisions by the Committee of Supply. It is asking a lot of President Ramotar to assent to a Bill that strips his Office of $5,182 million of the $6,057 million sought in the 2014 Estimates, effectively crippling the Presidency.

It would be easy to regard the amended Budget 2014 as a done deal and therefore a victory of sorts for the opposition. After taking out the amounts not approved, the budget deficit almost disappears. That would be too good to be true. When Dr. Singh made his announcement that he would present an amended Appropriation Bill to exclude all the not approved amounts, he must be presumed to have consulted with the President and his Cabinet colleagues, including the Attorney General.

Most persons I have spoken with expect a response from the Government even if the amended 2014 Appropriation Bill is approved by the President. At best, we will have the first Supplementary Appropriation Bill for 2014 to restore the non-controversial items which were the victims of collateral damage. Others take 2012 as a guide and believe that the Minister of Finance will simply release the funds that have been removed by the opposition and accepted by the Government in the amended Appropriation Act. Still others expect the Attorney General to return to court with the argument that the Presidency is a constitutional office subject to a direct charge on the Consolidated Fund, and therefore immune from approval or non-approval. There is merit in that argument and some money will have to be restored to allow the Office to function effectively.

The court’s decision on the 2012 Budget Cuts case was controversial and it would probably have preferred to stay out of any dispute on the sums to be restored and whether NCN and GINA are necessary for the Office of the President to function effectively.

The Government can avoid this by bringing back all the projects and programmes that suffered collateral damage. It may choose to seek a legal victory.

Stand by for round two.

PS: After this piece was completed, the President is reported as telling GINA that the Government is considering its legal options.

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