Budget debate should spur discussion on national economy

Fri Jan 18, 2013

Debate in the House of Assembly on the 2013 national Budget is scheduled to conclude today after one week of cross-table verbal clashes. In spite of the contextual challenges, the 2013 Budget is especially significant in that it comes in the year when the largest-ever capital project undertaken by the state, the Argyle International Airport, is due for completion, and when the agriculture industry is in dire need of revival.{{more}}

Upon the presentation of the annual Budget in Parliament, the focus usually shifts to whatever fiscal measures are pronounced by the Minister of Finance. This unfortunately takes precedence over what is a more fundamental issue, the state of the national economy and the management of it. In addition, sometimes it is not those measures of greatest economic significance which generate most comment, but those that are most politically sensitive.

This seems to be the case with the howls of protest echoing across St. Vincent and the Grenadines over the Prime Minister’s announcement that winnings in the National Lottery of less than $500 will no longer be exempt from tax. Many citizens who play the Lottery games and who have learnt to beat the system are upset to learn that they must now be taxed on small winnings.

Whether merited or not, the lotto tax is of far less significance that other economic implications of the Budget. There are important changes in the NIS, particularly those relating to the increase in contributions and the raising of the age of retirement. Fortunately, no new direct taxes on earnings have been decreed in the Budget, but the increase in excise duty on alcoholic beverages, a general rise in fees at the Registry and additional charges for passports required at short notice, will affect the citizenry.

That these matters and the all-important one about the national economy as a whole, tend to take second place to more immediate matters of far lesser economic significance, reflects the weakness in the national conversation. For these reasons, the Prime Minister deserves to be complimented for once more offering a lesson in economic literacy. His was a presentation not just on the Budget, but moreover explaining the economic choices before the country and its people.

The presentation sought to explain the range of global and economic challenges facing us, to trace how we have attempted historically to meet these challenges and options for our future development. These are matters very fundamental to our survival and progress and our people must learn to appreciate our realities, to recognize our inherent and comparative strengths, so as to develop the confidence to meet those challenges which confront us.

In these difficult times, it is all too easy to succumb to negativism and fatalism and to tend to believe either that we are doomed to failure or that, all we have to do to come out of the crisis is to vote for another party irrespective of whether that force has demonstrated both a clear grasp of our situation and a vision as to how to take us forward.

One can, and must, critically examine the budgetary proposals, agree or disagree with the prescriptions proposed, but at the same time, we all have a responsibility for lifting our level of understanding of our economy and economic affairs on the whole. Each budgetary exercise should lift us all at least one rung higher; it is not just an exercise in “speechifying”, but helps us to become more economically literate citizens, able to chaff the proverbial “wheat from the tares” and so contribute more to the national effort.