The government should use a portion of oil revenues to fund an Earned Income Tax Credit (EITC) program to help lift families out of poverty and put them on a path to prosperity. It also incentivizes work as opposed to discouraging it resulting in greater labour market activities and improvement in social and economic well-being. The EITC is one of the most successful anti-poverty reduction policies and a better option than direct cash transfers. In addition to lifting poor and low-income families out of poverty, the EITC has been successful in growing the tax base and reign in informal activities in the formal economy.
Over the last five years, taxpayers funded more than $1.1 trillion in government spending, each year pumping more money into the government coffers than the previous year. Despite this, taxpayers received less and less in return. The government unable to use taxpayers’ money to improve the economy and create opportunities for families and businesses to succeed. Moreover, its budget and policies undermined growth and began to reverse decades of positive economic momentum and social and economic progress. Government officials must start making better investment decisions to ensure taxpayers get a good return for their hard-earned dollars.
The government’s budget for the fiscal year 2018 essentially mortgaged the future of Guyanese and the economy. Despite record level spending, the budget cuts funding for the infrastructure and agriculture sectors that are critical for creating employment opportunities, mostly for low-skilled workers. Lawmakers continued to shift billions to shore up the government bureaucracy instead of better aligning spendings with social and economic needs. There are no major changes in policy direction to steer the economy away from its current downward trajectory.