Analysts say gov't $380b budget is geared at sweetening voters

Financial and economic analysts are passing off government's $380 billion budgetary allocation for the 2007/2008 fiscal year as election focused.

Speaking with The Sunday Gleaner yesterday, economist Errol Gregory surmised that the budget was likely to be an election budget based simply on its timing.

"We come from a tradition where we haven't seen a government resist the temptation in an election year to have a budget ... that normally is (about) pumping up expenditure to reflect increased economic activity and also to create the feel-good effect," he said.

Election confectionery

This analysis concurs with the views of financial analyst John Jackson, whosees a $30 billion increase in the non-debt portion of the budget as the likely portion that will be used for election confectionery.

"The increase in the non-debt section of the capital budget could be indicative of Government's attempt to want to use additional capital expenditure maybe to do road work or infrastructural work to capitalise on their position now, and in a way to influence voters," Gregory reasons. "We have seen it at work so many times."

Many of the sectors that seem to be of greatest concern to the electorate have received increases in their budgets. These include housing, whose budgetary allocation has been doubled for the new fiscal year. Housing is followed by the national security, education and health sectors.

Financial analyst Dennis Chung believes the amortisation of the public debt, combined with the added goodies allocated to the most pressed ministries, could be an attempt to allow themselves room for an election treat.

Nothing much happened

"But outside of that nothing much has happened," Mr. Chung argued. In fact, he said the Government will need to provide a supplementary estimate as the two per cent increase presented in the budget will mean they will have to scale back some operations.

"If it (the two per cent increase) is not having an inflationary impact on the budget, it would mean that we will be scaling back on some operations," he said.

University lecturer and political analyst, Dickie Crawford, while being cautious with his comments, has also suggested that the budget has been chocolate-coated for election purposes.

"I wouldn't categorise it as a gross 'run-with-it' budget- type of scenario, as we encountered those before, but some indication is in the budget for the concern of one or two very troublesome areas in the economy," he said.

Housing allocation

He believes the dramatic increase in allocation to housing, for example, will lend itself to more employment, giving the impression that there is some increased economic activity in the country.

Headded: "I don't think there was all this room to prepare a chocolate-coated election budget and I'm glad it isn't either. I believe the political parties need to campaign more on substantive issues rather than issues of material handouts to the people."

Echoing Gregory, Crawford argued that creating feel-good election budgets has been the tradition of successive governments, but the tradition needs to be broken, he said.

"It's short term and its part of the problem with the present budget, and that is the problem of our entire political situation," he said.