How each individual or group viewed the 2022 Budget depended on their expectations. They reacted rationally or otherwise and made decisions based on their predispositions and available information. With the peddling of so much misinformation and an absurd thing called “alternative facts” better termed delusions, there’s more confusion and mischief than the opportunity for coherence.
The Government finds itself between the proverbial rock and a hard place with negative economic growth, rising debt, declining reserves, falling energy production crowned with a pandemic—all treacherous cresting waves of the perfect storm, and expectations of what was achievable had to change. Apparently, it opted for social stability.
In the 2022 Budget, drastic measures were deemed counterproductive, but there’s no money to bail out everyone who needs bailing out. Still, there are plans to support hard-hit businesses as generators of employment while easing the harsh effects on those who have lost jobs and other vulnerable citizens. Any expectations for a budget that would have made fundamental and structural changes to the status quo were probably not in sync with economic and political realities. Try fixing a roof on a leaking house during a hurricane. More so if the foundation of the house is already creaking.
What’s necessary is the stimulation of economic growth, particularly in export-oriented ventures. It’s time to remove all hindrances to the ease of doing business and to prioritise VAT refunds, which are needed for productive reinvestment and successful employment strategies. Ultimately, that benefits the Treasury. Improving the business climate also means dealing effectively with crime, and the industrial environment.
Much has been said about employment creation, and there are initiatives in the budget, but these will take time to implement and yield desired outcomes. The budget weighed in with credit support and incentives to stimulate export-oriented growth, focusing on small and medium-size businesses—sectors that can bring value added in jobs and foreign exchange earnings. We don’t have a critical mass market to support large-scale manufacturing unless there are opportunities for regional and international export—a tough challenge today. Still, given the growth in e-business, there’s potential to create and grow internet-based niche markets and advance the services sector.
Agriculture, like manufacturing, is complex. It currently contributes only 1.0 per cent to Gross Domestic Product compared with ten per cent in the ’60s to ’70s. The age-old problems of diseases, weather, pests, and praedial larceny have motivated countries to transform the industry through technology advancements, including robots, temperature sensors, and GPS, to achieve efficiency, safety, and enhanced profitability. We won’t make much progress using methodologies of antiquity.
Education received a large slice of the budget, and rightly so. COVID-19 shocks have confirmed the extent of poverty and the inequity in education now compounded by the number of children who’re unable to attend school. One wonders whether people who genuinely need welfare aid are receiving it, considering the abject poverty we’re witnessing daily—parents and children, the elderly, and physically challenged people begging for help. A serious study is urgently needed on the extent of poverty. Curiously, approximately 50 per cent of households are currently receiving an electricity rebate on subsidised rates.
There are far-reaching interventions in the budget with positive implications for the future. Investments in the digital economy portend cost efficiency, and digitisation of the public sector and digital skills training should result in a more efficient public service. It should improve small business capacity and generate employment. Exempting computer equipment and supplies from duties and taxes supports competitiveness. Expanding WIFI services, ICT centres, and broadband service delivery to unserved communities would close the gap in access to online education while advancing the telecommunications sector and spurring business opportunities. ICT will undoubtedly improve tax administration efficiency, and business cash flows. Investments in road infrastructure will boost construction and related industries while providing employment for hundreds of professional technicians. Rebooting vocational training will encourage self-employment. All these strategies will take time to implement and require deficit financing.
There’s a need for clarity on societal transformation. Truth be told, there’re political roadblocks to constitutional reform and structural adjustments but we must hit the reset button, and soon to prevent the creaking foundations from collapsing. A budget is not merely a set of numbers. Philosophically, it should be a profound statement on shared values and aspirations. Granted, that’s a hard call with a tribal and lawless culture that defies rational expectations.