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Putting the encomiums into some perspective – 2011 Budget

Introduction
Before going into a couple of matters arising out of the 2011 Budget let us clear up a few points. In prefatory remarks during his budget speech, the Minister of Finance said “today, the Guyanese economy is larger than ever before with gross domestic product (GDP) now measured at $453 billion, and more resilient than ever before…” He did not say that this number increased dramatically last year by the simple exercise of rebasing the national accounts. As Ram & McRae pointed out in their response to the 2010 Budget, the re-basing caused an immediate increase in the GDP by 63%. Magically, that also made each of us much better off, in national economic terms, than we were before the rebasing.

What the Minister avoided as well was any reference to, or mention of, the extent to which the economy is driven by the underground, illegal and criminal economies. It is correct to say that the proceeds of these activities are not reported to the tax authorities and therefore escape taxation. But it is not correct to say that they do not form part of the GDP figure. The reason why they do get counted is because of the two ways used to measure GDP – by the income method under which such transactions are by definition excluded, and under the expenditure method under which it is captured.

Here is a simple example: drug man A ‘earns’ say one million US dollars during the year as his commission for moving the goods from Colombia to the US via Guyana. Clearly he will not report this to the tax authorities and is careful how and how much he washes through the cambio and street foreign exchange markets. But when he uses that money to set up a business, buy a vehicle or establish a housing scheme, the transaction enters into the GDP figures. So it does contribute to the ‘growth’ in the economy and to its ‘resilience.’

International reserves
Dr Singh also drew attention to the country’s external reserves but failed to mention the part played by Petro-Caribe and IMF funds in this equation. Nor was he prepared to relate the reserves to the country’s import bill which is spiralling almost out of control. As the few live off the fat of the poor, the country is now spending increasing amounts on luxury goods which cause our import bill to climb. In 2010, merchandise imports are projected to grow by 20% to US$1,477 million with the result that for 2011, the overall balance of payments (the account that measures international trade) is projected at a surplus of US$24.4M compared with US$90.1M in 2010 and US$234 million in 2009.

That places the country’s international reserves and its exchange rate at risk which, but for remittances, would have been significant if not disastrous. A sound tax system would see that the economy does not bear a disproportionate share of this burden. As we saw in Suriname a couple of days ago, the government seeks to address these goods by what are called “sin taxes.” Our sin tax for a very different reason is the VAT.

Over-exuberance
While the Finance Minister engaged in spinning the numbers, Mr Manzoor Nadir, a sometimes over-enthusiastic TUF member of the government takes it further by actually making false claims about the country’s economic performance. During this past week in a very cordial telephone conversation with him, I had to remind him of his wrong claim last year that four successive years of growth is a joint record in Guyana. I noted that he is now magnifying the myth on his current television rounds by extrapolating from his 2010 mis-claim that with Dr Singh’s reported 2010 growth, the five years continuous growth “represents the longest period of sustained growth in Guyana.” That is not correct and it was unfortunate that none of his fellow panelists or interviewers seemed to have been better informed or willing to correct him. As I pointed out to Mr Nadir, the period 1991-1997 saw seven years of significant growth that started to fall once Mr Jagdeo had taken over from Asgar Ally as Finance Minister in the mid-nineties.

Tax rates and allowances
The reduction in the tax rates for the corporate sector – with the discriminatory exception of the two telephone companies – has brought the Private Sector Commission alive, giving them something to crow about. The Georgetown Chamber of Commerce, a leading member of the PSC, was more measured in its response – it saw the increase in the threshold and the reduction in the tax rate as a good start. Neither of them bothered to reflect that the increase in the threshold does not restore the allowance to the value it had three years ago. In other words, adjusted for inflation, the $40,000 announced for 2011 is less that the $35,000 it replaced.

To have meant something the threshold should be the $50,000 called for by the unions. However, because this group pays such a significant portion of the taxes on income collected by the state, the government can be neither bold nor honest in addressing the level of the threshold. A proper tax threshold should be an indexed number that allows automatic increase in line with inflation. Under the un-indexed system, the individual is forced to bear the cost of inflation. It is for the same reason that the government will not reduce the rate of VAT – it is a cash cow and brings in huge revenues so that a couple of percentage points reduction would mean a lot.

The private sector has bought into a strategy that compresses the threshold for several years, releasing it only in an election year. It has too, bought into the myth of the relevance of the corporate tax rate. For the waged employee the personal income tax rate is meaningful since barring a small travel allowance here and a meal allowance there, after the personal allowance, his entire income is taxed.

What do tax rates mean?
With very few exceptions, for the self-employed and the corporate sector, tax rates mean little. They decide how much tax they are prepared to pay and have their friendly accountant – and here I include some professionally qualified accountants – do the rest. It embarrasses me that a profession to which I belong engages in this or any level of tax evasion. What is worse is that all of this is known to the authorities who seem unwilling to do anything about it.

Next week I hope to have comprehensive data establishing that for the self-employed and for segments of the corporate sector, tax rates matter little. Many of them live off the taxes paid by employed persons and the consumers. The estimates for 2011 show projected income from income tax under the PAYE as $16 billion and VAT and Excise Taxes of $50 billion, together accounting for roughly two-thirds of the total taxes to be collected by the GRA this year.

And this is one of the reasons why I do not think this government wants to undertake any tax reform. For them the threshold and the tax rate offer an easy, low cost option. It also throws the private sector off their call for tax reform that looks at all issues of taxation, including sectoral and geographical contribution. The private sector has failed to ask even the most basic question and the reasons for the delayed tabling of the annual report of the GRA by the Minister of Finance. None of them seems impressed that the basic rate of personal tax is now higher than the corporate tax rate, a situation unprecedented in this country. And this has happened while dividend income is tax free, as are capital gains on shares in public companies.

The expenditure side of the budget
The private sector too does not appear concerned about the expenditure side of the budget. Expenditure keeps defying the laws of gravity, increasing over the period 2006 to 2011 (projected) by 60%. Over the same period the capital budget is projected to increase by 48%, from $42 billion (2006) to $62 billion. Employment costs over the period will have risen from $14 billion to $22 billion or 57% but not for the traditional public servant whose income has increased by the PPP/C’s standard 5% annually. It has come from that creation called ‘contract employees’ the number of which keeps increasing annually.

In 2010, wages and salaries for contract employees increased by a whopping 40% while the total wage bill increased by 0.24%! Not only are funds being diverted though NICIL but employees are also being diverted, this time via the Office of the President, the Ministry of Health, etc. Worse, my information is that some of these ‘contractors’ are treated as self-employed and are responsible for paying their own taxes. In other words, the government encourages the tax evasion.

The overall deficit of the government finances is projected to increase from $20.6B to $34.0B. And that is after $14 billion of Norwegian money. If that does not come in, any government that comes in after the 2011 elections will have a real job on their hands.

If only the private sector could be convinced that these matters are as important as the tax rate, we would in fact have a good debate going.

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The private sector and development objective

Introduction
2010 has turned out as a bumper year for some of Guyana’s leading businesses. With several public companies having a September 30 year end, the results are welcome for the shareholders of Banks DIH Limited and its banking subsidiary Citizens Bank Guyana Limited, the DDL associated banking business Demerara Bank Limited and Republic Bank Guyana Limited.

Republic Bank, a subsidiary of the Trinidad and Tobago giant of the same name, and always the first of Guyana’s public companies to hold its annual general meeting, reported to its members profit after tax of $1.982 billion for the year ended September 30, 2010. This 8.8 % increase over 2009 turned out to be modest when compared with the results of some of the other businesses.

Citizens Bank had a whopping increase of 37% in net profit while the Demerara Bank Limited reported a more modest increase in net profit over 2009 of 4.2%. Banks DIH Limited, the beverage giant showed increases in before-and-after-tax profits of 21% over the corresponding period one year, inclusive of dividends from its banking subsidiary.

Contributing to these impressive results of the commercial banks is an 11.6% increase in credit to the private sector. Categorising the credits by economic activities, the September 30 report of the Bank of Guyana shows a 77.9 per cent increase to the mining sector, 36.5 per cent to agriculture, 22.1 per cent to manufacturing and 16.9 per cent to real estate (mortgage loans). Credit to the distribution and personal sectors reflected growth of 11.7 per cent and 4.1 per cent while the rice milling sector recorded a marginal growth of 0.3 per cent. Conversely, the other services sector reflected a decline of 8.9 per cent.

Taxes and corporate Guyana
It is interesting to see the effective tax rates paid by these businesses as the government continues to ignore tax reforms in which the private sector under its current leadership show little interest. For this purpose I include the other major domestic commercial bank – Guyana Bank for Trade and Industry whose year end is December 31 and for which the 2010 financial results will not be available for some time.

Tax Table

Source: Annual Reports of companies

Why the PSC is not taking any real interest in tax reform – an integral element in any developing economy – is really hard to understand, unless its priority is to avoid the public castigation one of its leaders received from Mr Jagdeo for daring to ask for a reduction in the corporate rates of taxes. As the table shows the effective tax rates have climbed quite significantly in some cases, with one bank almost up to the nominal rate of 45%. The Chairman of the PSC has said that tax reform has now been placed on the agenda of the National Competitiveness Council (NCC), of which he is the Vice-Chairman. This is an entity on which huge sums have been expended but it takes some effort to see if there have been any returns on those investments.

In fact even as the Chairman was disclosing to Stabroek Business the new responsibility on the NCC for tax reform, he was reported as giving no indication of the state of play regarding the tax reform discourses, alluding instead to what he said was a partnership between the government and the private sector to engage a consultant “to review the tax study that had been commissioned by government and to recommend appropriate changes to the country’s tax structure with the objective of formatting a new tax structure that would be friendlier to the business community and the average employee without compromising government’s tax collection.” This is quite a mouthful that really means very little.

Share prices and the Stock Exchange
The annual reports have one other limitation running through them. None of them even mentions the movement in their company’s share prices as reported by the local Stock Exchange. Whether this is because they do not take the Stock Exchange seriously or do not consider share prices relevant to their members is a matter for speculation. This is clearly wrong since people buy shares not only for dividends but also for capital appreciation as reflected in the price for shares.

What is also interesting is how the ‘market’ seems to ignore the companies’ reported results. As the following table shows the increases in earnings are not reflected in the share prices, an indicator of an inefficient market which can be due to a range of factors including as an extreme but unlikely cause, market manipulation.

Share price analysis

Source: Annual Reports of companies

The disappointment with our still fledgling Stock Exchange must be tempered by the fact that the regional exchanges are also facing difficult times with some companies choosing to de-list rather than face scrutiny and bear the cost of listing. There is no indication that the situation in Guyana will improve any time soon and the public’s lack of interest in the shares of Trinidad Cement Limited (TCL), the only regional company to list on our exchange will almost certainly discourage other regional companies for fear of repeating TCL’s experience. That would be unfortunate.

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Mr Lall and his gov’t cannot escape responsibility for the state of the dump site

Some of the many things that immediately come to mind about this government are the combination of its ignoring or ignorance of basic laws, its neutralising or neutering of the opposition and its tendency to pass the buck at every opportunity. Mr. Kellawan Lall, Minister of Local Government who stands out as a ministerial recipient of police tolerance – or their hesitation to prosecute crimes involving special persons – single-handedly demonstrated these failings in his statement in the National Assembly in relation to the Le Repentir garbage disposal site “I want to debunk the idea that this [site] has to do with the central government.” (S/N Friday December 31, 2010).

The minister’s expertise in dump site management was not known until that moment when he informed the National Assembly that “over the years, he had advised the Solid Waste Department of the M&CC how to manage the site but it failed to heed advice.” Here is a man who has acted autocratically on less important issues when the M&CC (sic) failed to take his “advice” but who, when the well-being of tens of thousands of the citizens of Georgetown is at stake, stands back for years, doing nothing and coming close to wishing a city-wide health pandemic to prove a political point.

Such a statement denying government responsibility and documented for posterity in the official parliamentary records should have been immediately challenged for its glaring and dangerous inaccuracy. Article 149 J (1) of the constitution sets out as a fundamental right of every citizen “the right to an environment that is not harmful to his or her health or well-being.” And Article 149 J (2) imposes on the State (emphasis mine) a duty “to protect the environment for the benefit of present and future generations through reasonable legislative and other measures designed to – (a) prevent pollution and ecological degradation…… “.

Mr. Lall at the very least ought to know as well that the Guyana constitution gives to every citizen a right to life. Courts in more normal countries have interpreted this right liberally and widely to include in addition to physical existence, quality of life, access to roads, the means to support life and living with dignity. Unfortunately, with the threshold for ministerial appointment in Guyana being exceptionally low, one does not expect Mr. Lall to be informed about these or about South Africa’s and more recently Kenya’s admirable constitutional safeguards of economic, cultural and social rights. But one does expect that the government’s legal advisors would attempt to educate ministers on general and specific matters pertaining to their work. The evidence so far is that this is not being done or that any effort is not succeeding.

More direct to the environment, my recent readings about citizens’ action in countries in Africa and in India provide ideal examples and support for Guyanese to take action against the government, the Environmental Protection Agency and the City Council for damage to the environment and the endangering of lives.

One example will suffice. As far back as 1996 the Kenya court ordered the shutting down of a school’s toilets because their odiferous gases interfered with and diminished a single individual’s ordinary use and enjoyment of his home. Here in Georgetown we have tens of thousands who are affected by the dump site, some more directly than others, no longer able to enjoy fresh air, to take an afternoon stroll, or to send their children out to play. And to add a desecrating touch, even the dead are again buried, this time by stinking, rotting, toxic garbage. Yet it seems that not one of the living, not any of their political leaders, not a single presidential aspirant, is concerned enough to raise their voice in protest, aggrieved enough to take action in defiance or interested enough to approach the courts for relief.

No surprise then that we have such uninformed, bungling and callous persons as ministers. That Mr. Lall is by no means unique makes it all the more troubling.

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Jagdeo’s mis-conceptions of the details of Guyana-Norway MOU source of international embarrassment

The road from Oslo, Norway to Cancun, Mexico has been proving to be a rather rocky one for Guyana’s President Jagdeo. In February 2009, Jagdeo and Norwegian Prime Minister Jens Stoltenberg signed a memorandum of understanding in the Norwegian capital Oslo under which Guyana would receive from Norway up to US$250 million ($51.7 billion) during a five year period ending in 2015 for this country to preserve its forests. In return Guyana has undertaken to accelerate its efforts to limit forest-based greenhouse gas emissions and protect its rainforest as an asset for the world. It was a euphoric moment for Jagdeo, one that placed him in a positive light on the world stage and caused some of his supporters to nominate him unsuccessfully for the Nobel Peace Prize.

As a measure of President Jagdeo’s excitement, in November 2009, he described the agreement as a watershed moment, “another first by Guyana” for which Norway should be commended. One year later at a climate change forum in Cancun, Mexico on Tuesday December 7 when, sitting beside the Norwegian Prime Minister, he tore off at his long-time benefactor the World Bank as well as the Norwegians for what he perceives as delays in the disbursement process of what he described as “our money.” According to Mr Jagdeo, a process that Stoltenberg saw as going well, had turned into a nightmare that could for good measure cost him his presidency. This latter comment clearly indicates that President Jagdeo had overstepped the boundaries and with this had lost the respect of Stoltenberg and the World Bank which was quick to point out the mechanics of the Norwegian deal.

Irresponsibility and immaturity
Mr Stoltenberg’s incredulous look at the iconic moment of his outburst was a defining point for Mr Jagdeo and Guyana, a measure of how one moment of irresponsibility and immaturity can undo a year of good solid and hard work. Suddenly the Champion of the Earth shrank into ordinariness and Guyana was exposed as a country unable to appreciate and demonstrate basic rules of diplomacy and discretion. But those who have observed President Jagdeo over the years would not have been as surprised as Mr Stoltenberg. That has been Mr Jagdeo’s brand of behaviour in Guyana where he could rail, abuse and defame with complete impunity.

By the time the President had returned to Guyana two weeks later his temper had subsided and more calmly he announced that he expected disbursements to take place some time next month. Bad as it, Mr Jagdeo’s conduct in Cancun might have been understandable, except that the display of crassness was not an isolated case of abuse but rather a pattern that has been directed at the British over security, the Americans over drugs, the World Bank over process and Guyanese over the mildest criticism, no matter how justified. This is more than a problem for Mr Jagdeo; it is one for the country, its citizens and its diplomats. Their task of damage control will add to the challenge they face with few and sometimes mixed signals from the Office of the President that is effectively the country’s Foreign Ministry.

Glaring misconception
So what is the problem or are there more than is being let on? President Jagdeo had said in January that Guyana had complied with all of the conditions under the Memorandum of Understanding (MOU) and that the “only outstanding thing” is the settlement of the trust fund mechanism through which the money will flow to Guyana. Even if that was all, a trust fund carries immense legal and other obligations as the World Bank Director for the Caribbean Yvonne Tsikata had to point out in trying to correct our President.

The fund, the Guyana REDD+ Investment Fund, which aims to be a multi-donor financial mechanism managed by a reputable international organization, is to be operational before any contributions can be disbursed from Norway. Describing Jagdeo’s position as “the most glaring misconception,” Ms Tsikata explained that as a trustee, the World Bank cannot disburse any funds to the implementing partners such as the UN and the Inter American Development Bank, before getting the green light from a Steering Committee comprised of Norway and Guyana. She added that up to now, the committee has not instructed us to transfer any funds and as trustee, the World Bank cannot act faster than the Steering Committee. That elementary fact appears to have escaped Guyana’s President.

And as Prime Minister Stoltenberg pointed out in Cancun, his country’s agreement with Guyana is one that is results-based. Knowledgeable persons I have spoken to confirm Mr Jagdeo’s misinterpretation of the agreement which he negotiated.

Technical and scientific issues
Persons familiar with the agreement point out that its technical and scientific issues and Guyana’s spending proposals under its hurriedly cobbled up LCDS are distinct issues which have been distorted and conflated by Mr Jagdeo. The Verification Report for Norway is not final – Rainforest Alliance has been contracted to undertake this verification of compliance with the enablers (progress indicators) in the Joint Concept Note attached to the Norway-Guyana MOU. I understand that the report is not yet finalised.

Also incomplete is a report by Poyry, a New Zealand management consulting firm that specialises in forest and related industries and which is conducting a study into the technical and scientific issues of monitoring, reporting and verification system (MRVS) for carbon emissions. So, there is no verified performance, and consequently, the Norwegians have no obligation to pay in advance of the agreement on verification.

Spending
A separate issue is the proposals for spending. President Jagdeo is confusing these two issues. He said that all spending proposals will be run past the MSSC, which is different from the Steering Committee under the GRIF. According to the LCDS website, the MSSC is not recorded to have met since August, and there is no evidence that MSSC has considered any of the proposals on spending – these are Mr Jagdeo’s proposals.

Then there still remains the anomaly that this is a REDD scheme. REDD is about reductions in carbon emissions. But Guyana is increasing emissions – from increasing gold mining and gold exploration, road-building and associated land-clearing, increasing log exports. So that paradox remains unresolved.

Cancun was a failure for Guyana which was represented by Andrew Bishop but who was effectively silenced by Mr Jagdeo. How fast we have lost ground in terms of our credentials as a climate change champion is demonstrated in the recent UNASUR communiqué, in which there were prominent mentions of Ecuador’s Yasuni initiative to keep oil in the ground but no mention of Jagdeo’s LCDS, even though the summit was held in and financed by Guyana.

Money, money, money
President Jagdeo’s performance also vindicated the view of many here that his only interest in climate change was in the money it could bring. Had the McKinsey study been done by any lesser known consultancy it might have been described as bogus, valuing the retention of our forests at US$580 million annually, when we settled for an average of less than 10% of that for each year over the next five years. And at a very practical level, if Mr Jagdeo really believed in the dangers of climate change, the rise in ocean levels and the overtopping of our sea defences, would he have allowed an entirely new community involving some of his close colleagues to be established right on the shores of the Atlantic knowing that it is the state that will have to come to the rescue of the property owners if the fears were to be realised?

And some of President Jagdeo’s LCDS proposals are equally spurious as the World Bank and Norway would discover with minimal research of the Amaila Falls hydro-project and his land titling for the swing voters in next year’s elections. We are told that just when the 2011 elections are around the corner, Mr Jagdeo wants to spend some $1.6 billion on land titling. Not only has the process of land titling for Amerindians been greatly simplified under the 2006 Amerindian Act which his government was finally forced to bring into law four years late. In fact for several years the national budget has easily provided the money for land titling exercises and there is no evidence of any major backlog of applications that are outstanding. Some fear that without campaign financing laws and no financial controls, the bulk of the $1.6 billion will simply be used for political purposes.

Conclusion
The LCDS Unit in the Office of the President has been busy spending money while some of its key players have been engaging in private consultancies. They should have been sent home a long time ago. Ram & McRae had cautioned about including in the 2010 Budget money from Norway but instead of cutting back on expenditure we now have the Finance Minister going to the National Assembly for $6 billion including $4 billion for Irfaan Ali’s ministry. One can only hope that on this occasion, he has fewer difficulties with the truth than he had with a similar sum around the same time last year.

And finally there is an element of governance in the agreement. That is another word that makes Mr Jagdeo see blue.

Have a happy and peaceful Christmas.

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The making of the Supreme Court a budget agency has placed the judiciary under threat

While the independence of the judiciary is often couched in lofty concepts about separation, one from the other, of the three arms of the state, the essence of it all is empowering, securing and protecting the judiciary and its individual members in their fearless and uncompromising defence of the fundamental rights of the citizens.

To ensure that independence, constitutions – including Guyana’s – provide elaborate mechanisms and safeguards to protect the judiciary and its members. These include security of tenure; salaries that are fixed and not subject to a vote by the National Assembly; Parliament can only add to the powers and jurisdiction of the Supreme Court but cannot curtail them; the power to punish any person for their contempt; separation of the Judiciary from the other branches of the state; and immunity from criminal and civil actions in respect of judicial decisions.

Despite this formidable armory, Rudolph James, a Professor in constitutional law, in The Constitution of Guyana published in the 2006 Special Issue 35-36 of Transition, a publication of the Institute of Development Studies of the University of Guyana, writing of the conduct of the judiciary during an earlier era noted that while the leadership of the country set about to miniaturise the judiciary, the “Guyana judges largely contributed to their subservient status.”

Professor James was optimistic that with the commitment to democracy expressed by the new ruling party in 1992 “one expected a transformation of the judiciary …” But a decade later James lamented the many acts of indiscretion of the leadership of the ruling party including the late Mrs. Jagan, current President Jagdeo, Dr. Roger Luncheon and even the government’s high ranking judicial officers, acts that would in a truly democratic state be treated as contempt of the court. Instead, Mrs. Jagan won a nod of approval from a senior counsel when in his and the presence of the then Chancellor she disdainfully threw over her shoulders a judicial notice.

The onslaught has continued, sometimes with the approval of some of the very judges whose sacred duty it is to ensure the independence of the judiciary and their own. They have not raised their voices as Jagdeo undermined the judiciary with financial and fiscal incentives, embarrassed its membership by challenging their competence and judgment, emasculated them with laws that are clearly in violation of the Constitution and dared them to caution him when he pronounces on matters that amount to contempt of their proceedings.

The Time Limit for Judicial Decisions Act is only the most recent case of the legislature seeking to control the conduct of individual members of the judiciary. But Jagdeo whose capacity to use and misuse public money will go down in presidential folklore knows that the judiciary’s independence can be compromised both at the personal and institutional levels. For the latter the tool chosen is the Fiscal Management and Accountability Act 2003, the most insidious piece of legislation the PPP/C has passed to control some key constitutional bodies including GECOM, the Audit Office and the judiciary. By making the Supreme Court a budget agency, the judiciary’s independence has been made subordinate to the legislative and the executive arms, bringing it under the control of the Minister of Finance. Moreover the judiciary is treated on the same basis as the regions and ministries whose financial misdeeds are legendary.

The Act seems clearly repugnant to several articles of the Constitution. Article 122 A (1) provides that the “courts and all persons presiding over the[m] shall exercise their function independently of the control and direction of any other person or authority; and shall be free and independent from political, executive and any other form of direction and control”, while Article 122 A (2) makes all courts “administratively autonomous and shall be funded by a direct charge upon the Consolidated Fund.”

When an entity like the judiciary, the Audit Office or Rights Commissions, or a payment like the public debt is funded by a charge on the Consolidated Fund it is included in the Estimates as a block sum and does not require a debate or subject to a vote by the National Assembly: Article 218. And Article 217 sets the mechanism for the payment of the sum so charged by requiring that the “moneys charged …shall be paid out of that fund by the Government of Guyana to the person or authority to whom payment is due.”

To add clarity and reinforce the court’s independence even in financial and administrative matters Article 222 A states that the expenditure shall be by way of an annual subvention. But by making the judiciary a budget agency, it now has to answer to the Finance Secretary about its affairs and is required to provide information and explanations to the National Assembly. Worse, under the Act the Finance Secretary can designate who the head of the judiciary should be for purposes of the Act!

Not that the Constitution expects a lower standard of accountability or financial management in the judiciary than it expects of budget agencies. Indeed Article 122 A (2) imposes on the courts the obligation to “operate in accordance with the principles of sound financial and administrative management”, similar standards set for budget agencies.

The questions being asked is if the judiciary, the guardian of the constitution and the protector of the citizens, can be so easily emasculated, what hope is there for the citizens? If it cannot defend itself, how will it defend them?