Budget rich man or poor man?
Editorial
Press day
A RECURRING question after every budget presentation is how well it meets the needs of the average person, as opposed to the wealthy.
In truth, the interests of the two demographics need not be in conflict.
In theory, there is a symbiotic relationship between reducing poverty and stimulating trade. In practice, the question is whether a government has struck the right balance.
This is the question that remains unanswered, despite the long budget of Minister of Finance Colm Imbert on Monday. This is a question the government must answer during the budget debate.
While Mr Imbert has made efforts to provide relief to ordinary citizens by focusing on VAT and food prices, it is also true that many of the measures announced were so opaque or vague that they all suggest that he might be a prick in the tail.
The perception that the budget benefits the rich more than ordinary citizens – despite Mr. Imbert’s assurances that the government will focus on taxing those who can most afford it – is not unfounded.
Many of the “goodies” announced concern companies or start-ups. For example, the reduction in the tax rate will benefit a group of about 500 exporters. The stimulus for small and medium-sized businesses will benefit technology companies and construction companies. Manufacturers will also benefit from the incentives.
But how will the economy recover if the business is not stimulated?
At the same time, the government has done itself a disservice by beating around the bush when it comes to things like utility tariff increases.
Mr. Imbert clearly foresees increases in water and electricity bills, so much so that he has announced rebates that will affect 210,000 households with bills of less than $ 300. This coating cannot hide the fact that for all the remaining households a hike is looming.
The minister must shed light on this.
At a time when many are struggling with the effects of unemployment, facing eviction, or are on the verge of shutting down their businesses, we could have done without the intensive overhaul of short-term administered grants months ago (after a lot of red tape and delay for some), or the announcement of the abolition of VAT on certain basic foods on which no VAT was collected anyway.
How will the additional $ 200 million allocated to relief work be spent?
Without any commitment that relief will be made regular or expanded, such measures remain one-time bailouts that pale in comparison to the billion-dollar bailouts the state has provided to huge financial conglomerates over the years. .
The fact that other areas were left untouched by the budget – such as pensions – is also notable, although consistent with the need to keep the profile of government spending low.
The government may not have given priority to one group over the other, but without further details it may appear unresponsive to many who are being left behind.