COLM IMBERT’S epic budget presentation, which on Monday took more than four hours to deliver, was revealing not only for what was said but for what was left unsaid.
The Finance Minister glossed over the fact that projected revenue for the upcoming year is $54 billion. This figure is down from last year’s initial projection.
While it remains higher than previous years, its shrinking comes amid much boasting about a rebound: growth has moved from 1.5 per cent in 2022 to three per cent in the first quarter of this year. Unemployment is now just 3.7 per cent, which is statistically close to what is termed “full employment.”
So why will revenues not reflect this momentum? Why is expenditure expected to outstrip earnings yet again, resulting in a $5.2 billion deficit?
The answer relates to the fact that much of this revenue is still not tied to real economic performance, but rather oil prices. The minister has pegged the budget on an assumption of US$85 per barrel, compared with US$92.50 per barrel in 2023.
While the non-energy sector keeps recording stellar growth, and indeed non-oil revenue is expected to be $35.5 billion – more than double oil revenue – the pace of growth is simply not fast enough to keep the economy on an even keel as yet.
This is the context in which Mr Imbert’s decision to provide much relief to the population should be understood. He announced an increase in the minimum wage to $20.50, which will benefit 190,000 people; a $1,000 schoolbook grant which will benefit 65,000 students; a deferral of residential property tax for the needy; a freeze on National Insurance Scheme (NIS) contribution increases for now; backpay by Christmas for public-sector workers; and efforts to ease foreign-exchange pressures and make it easier to use e-payments.
Schools also stand to benefit from new measures that will allow the private sector to provide sponsorship up to $500,000. The message was an acknowledgement that the Government understands it must do something to help, even if it is constrained.
Even before Mr Imbert rose to begin his speech, aspects of that constraint had already been written by public expectations arising from high crime levels. With his announcement of the tripling of police recruits and more police cars, there was evidence of a shift in the Government’s approach, though there will be much to discuss on the anti-crime front in coming days and weeks.
By the end of the minister’s presentation, in which much emphasis was placed on global uncertainties, clouds had gathered over the Parliament building. Despite Mr Imbert’s provision of some momentary respite, thunder and lightning over the capital city on Monday night spoke symbolically of possible stormy times ahead.
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