Without apology or reasonable explanation

When the Minister of Finance sought his first spending increase to the 2011/12 budget of roughly $2.5 billion, I asked whether this increase was structural, that is, whether it was a permanent addition to our spending pattern or not. I got no answer. Now just four short months later, we know the truth. The minister is incapable of controlling the administration’s appetite for spending. Without apology or reasonable explanation, he now tells us that the first increase is not sufficient and that a further $1.5 billion is required this year to meet their spending needs. This move tells me very clearly that not only is the first increase a structural one, but that there is an even deeper structural shift under Minister Dookeran’s stewardship. It is now abundantly clear that the nation is being lumbered with a grotesque increase in annual expenditure that spells economic doom and gloom within a few short years. Not only that, but the minister makes no attempt to enlighten us about his plans for generating additional income or restraining expenditure in the years ahead.

 

 

This is particularly galling for a number of reasons. The first is that even the Governor of the Central Bank now recognises that we’re smack in the middle of a slump. What this means is that we should expect no real increase in income in the short-term. With stagnant income, it is foolhardy to increase spending now, especially in ways that bring no longer-term benefit. Secondly, these increases raise major questions about the minister’s planning process. With respect to the Cepep increases, for example, did the minister not know what the monthly cost was when the budget was first set? Did he not know it when he calculated his first increase?  Or is it the case that ministers expect to be able to create new schemes at a whim, and force the Minister of Finance to fund them? No matter which it is, we ought to be very concerned. When a new budget is presented next year, are we expected to take it seriously? And how necessary is this new expenditure? I certainly don’t get a sense that this expenditure is of such a vital nature it should be allowed to trump our supposed fiscal discipline. What commitments have been made that warrant this breach of the minister’s own claim to be able to make hard decisions when necessary? Here was an early test of his words and he failed abysmally.

 

 

Then there is the question of where all the money is going. Given that we already had the largest budget in our history, one has to ask where is the evidence of greatly increased economic activity by the Government. With such a high level of expenditure, one would expect to see a much greater level of activity on the ground. I find it difficult to reconcile this level of expenditure with the anemic activity in the economy. Ask any business person or worker and they will tell you that activity is depressed. Where is all this money going? Finally, where is our sense of economic priorities? Diversifying the economy, reducing the state’s role in the economy, controlling expenditure and generating sustainable growth, must surely be our priorities. If as appears to be the case, these objectives are not promoted by this new expenditure, how does one justify them relative to other more beneficial projects?   As usual with this minister, there are more questions than answers. In his usual contemptuous way, he will probably ignore all these reasonable questions. Disappointingly, with performances like this, he continues to lose my confidence daily. If the reaction of the people I meet daily is any indicator of public opinion, then I am not alone.

 

David Walker

Via e-mail