by Linda Straker
- Opposition Leader said buoyant revenue performance masked economic underperformance
- Budget presents no response to vulnerable segments of population to runaway inflation
- Budget debate continues on Friday, 8 December 2023
Opposition Leader Dr Keith Mitchell has described the 2024 Estimates of Revenue and Expenditure or Budget, as a disjointed, inarticulate, rambling, confused journal of the Government’s first year and a half in office which focused entirely on successful programmes of the former New National Party (NNP) administration.
“So, after 1 hour and 47 minutes, the entire country was asking when he will start going into the 2024 Budget,” Dr Mitchell said on 7 December, in his opening statement responding to the budget which Finance Minister Dennis Cornwall presented on 4 December. “Therefore, I would seek to assist the Minister of Finance, in explaining to this honourable house and by extension the people of Grenada, what is in the Estimates of Revenue and Expenditure 2024, and how it intends to help, if at all, the people of this country.” Under parliamentary regulations, the Opposition Leader has the same amount of time used by the finance minister to respond to the budget presentation.
“This budget cycle is cast in a context of hyperinflation, contracted growth, increased crime and violence, unacceptably high youth unemployment, and a largely vulnerable working class. The budget read on Monday presents no response to the vulnerable segments of the population to the runaway inflation which averages 8.7% for food, but exceeds 15% on some food products,” said the immediate former Prime Minister.
“Indeed, after the reading of the budget, the growing segment of our population that comprises the working poor, now knows for sure that none of the harsh conditions that afflict their lives will be transformed for the better,” said Dr Mitchell as he recommended an evaluation on Government revenues allocated to the areas that are affecting the people of the country.
Dr Mitchell who is a former finance minister, said that the failure of Government to solidly roll out any new initiatives is obvious in their debate on the implementation of projects that they met in place. “In fact, the Government’s Medium-term Expenditure Objectives’ now states that the ‘Government’s transformational agenda will kick into high gear during the 2024-2026’ period. Even so, there is little or no new initiative being advanced in the forward estimates of this government,” he said.
Government has reported that revenue collection has surpassed the projection for 2023. However, the Opposition Leader opined the massive increase is due to the increased taxes and not a general expansion of the economy. “On domestic taxes, the government reintroduced VAT on electricity, reintroduced the petrol tax on gas and petroleum products, placed a 15% VAT on sugar and sugary drinks, increased excise taxes on alcohol, increased licence fees for road users, and imposed a charge on water — all of which are major revenue earners,” said Dr Mitchell.
“Additionally, the government has provided an amnesty to encourage taxpayers who owe taxes to take advantage of a tax break. When we consider all those things together, the revenue performance must be seen as the combination of the ‘price effect’ of inflation, the imposition of new taxes on the people of Grenada, and also of past as well as 2023 performance of the economy. The buoyant revenue performance has masked the underperformance of the economy,” he said.
Grenada’s Estimates of Revenue and Expenditure is projected to be EC$1,656,356,499 which is an increase to the 2023 budget which was then estimated at EC$1,350,465,246. The other Members of Parliament in the Lower House are set to continue the debate on the budget on Friday, 8 December 2023.
After the Opposition Leader’s rebuttal, Parliament adjourned so members could attend the official funeral service of former member Adrian “Spaceman” Mitchell who served from 1999 to 2008.