Let us look at the budget situation, how it has been over the last several years. Basically its expenditure exceeds income massively.
It has been borrowing and borrowing not just for day to day expenditure but on extravagant projects such as the Standard Gauge Railway (SGR).
Already we got a situation before even coronavirus came around; the government’s fiscal situation was dire, very grim and very tight. No room for manoeuvre.
If you look at what we earn from these revenues, it can keep the government going for half a year only. That is the situation, now you add this (pandemic); this as you know is going to hit the government, individuals heavily in the second half of the year.
We are going into economic recession; there will be a lot of job losses. The government is going to struggle.
The government is in no position at all to redirect any money, so when they talk about for example stimulus packages the big question is where are they going to get the money from?
You cannot get it from your own income; it is going to be very difficult to squeeze more out of taxation. The best you can use taxation to squeeze money is when things are well and there is money and economy is doing well but in our situation there is nothing.
The government is literally between a rock and hard place and I would say a very hard rock and a very hard place.
If I was the government I would not make any promises concerning expenditure. This has been global, all institutions whether donor or government are in serious situations. If I was the Cabinet Secretary I would be very candid and say look we don’t have the money. We are even struggling to pay even what we got (loans).
Any pretence that we got money to spend and that we are going to put it into this and that is nonsense. We don’t have money.
I just hope the Treasury guy is going to be realistic, if there is anything he promises we know it is not going to happen.
He should just be honest, I think everybody know this, it is terrible times. Even these few tax measures the President announced they meant very little.
Shaw spoke to the Star
