Political scientist: Expect tough budget for middle, upper class

POLITICAL Scientist Dr Indira Rampersad said she expected the measures in the 2020/2021 national budget to be especially difficult for the middle and upper classes.

She was responding to the announcement of the budget date of October 5.

She told Newsday in a telephone interview the Prime Minister on election night told the population the next two years ahead would be tough. “It will be a very stringent budget. It will be hard on the middle class in particular.”

She speculated Government will bring back property tax and noted that while the Opposition campaigned against it the Government did not campaign on a platform that it would not be returned.

“This will hit the middle class who own property.”

Rampersad said there was also a chance that the Government Assistance for Tuition Expenses programme would be further diminished “if not wiped out.” She also expected corporate tax to increase as well.

“The middle and upper class will bear the brunt of it.”

She did not predict an increase in the price of gas as that would affect from the small to the upper class. She said the measures to be taken would not affect sectors that have been hard hit by covid19.

“You don’t want to make it worse. Now it is about livelihood. It is about survival for many of them.”

She predicted there would not be a lot of government expenditure in the budget. She recalled there was quite a bit of expenditure leading up to elections from money borrowed for covid19 relief.

“We have to find out how much of that was distributed, what is left and what it will be used for. Will it continue to be used for relief grants?” She said though some businesses were up and running some were still suffering including very small businesses like hairdressers and cosmetologists.

Rampersad also questioned whether Government will continue to financially prop up Caribbean Airlines.

She said Government did not settle outstanding trade union payments in the public sector and she expected some of those to be settled. She added some of these negotiations are outstanding since 2011 and most were from 2014.

“I would hope they would settle some of those. Because the trade unions are going to be on their heels for payments.”

She pointed out the PNM did not win the general election convincingly and a big sector of the population did not support the Government politically.

“They are looking very carefully to see what they are going to do. And all stringent measures are going to be met with criticisms.”

She said regardless of the situation people will expect a government to provide for them and to fulfil election promises.

“Government unpopularity could settle in very early with the budget.” She added it was not a matter of Government managing the covid19 situation well any more as it had been spreading like “wildfire.”

“The popularity they enjoyed with all that and were able to win the election with is all going to dissipate.” She also noted Government never delivered on the previous promise of LED light bulbs.

Political scientist Dr Bishnu Ragoonath told Newsday Government will be faced with significant challenges in raising sufficient revenues to do all they normally do, and this was not accounting for covid19 expenditures.

“Clearly they will have to significantly reduce expenditure and this will impact upon the performance of the Government in alleviating and managing the challenges of covid as well as the economy, including closures in the private sector.” He said he was not sure the revenue base would allow Government to embark on the kinds of projects announced in the manifesto. He added Government will have to focus on other self-sustaining activities such as the Prime Minister’s emphasis on agriculture.

“We will have to see how that will play it. Will people be called upon to grow their own food rather than buy it.”

He said the public is fully aware things will be tight in the budget and even worse in the context of funds available to the Government. He added, however, if there are job losses in the public or private sector citizens may not take too kindly to it.

“The 2020/2021 budget will be difficult one.”