Government’s plan to pump millions of dollars into the non-energy sector could see taxpayers’ dollars being wasted. That’s the view of economist Indera Sageewan-Ali, who warned that proper assessments must be done on the industries. Speaking at the Oilfields Workers’ Trade Union post-budget forum yesterday, Sageewan-Ali said the 2013 Review of the Economy showed declining revenues in the manufacturing, tourism, creative, maritime and other new growth sectors.
Finance Minister Larry Howai has projected $39 billion in earnings from the non-energy sector by the end of fiscal 2015. In an effort to stimulate growth in this sector, he proposed to refund non-energy industries 20 per cent of their production expenditure, an increase of five per cent, with a cap of US$8 million.
But with little growth, Sageewan-Ali said, unless there was proper development of these industries, Government would be spending money blindly. This, she said, would lead to a continued dependency on oil and gas. With details lacking from Monday’s budget presentation, she questioned how much of the projected non-energy revenue would come from taxes.
“The Government, notwithstanding millions spent on these sectors, do not have answers to these questions, they don’t know. They are spending taxpayers’ money in the blind. “The first thing you need to do is understand what exists, and this applies to any sector. “Secondly, you have to do a market analysis, if you are talking about selling in the international market, because there are dangers out there.
“We have to continue to grow our oil and gas, but we have to reduce its contribution to the GDP. We have to move that contribution of 45 per cent to somewhere around 20 per cent and allow the other sectors to grow and increase [their] contribution to the GDP.” She added, “The projected revenue of this budget is about $60 billion and out of that, the oil sector will provide $21 billion.
“The non-energy sector will provide $39 billion, but the minister did not tell us, out of that $39 billion, how much revenue will come from taxes. We need to understand, and that is why we really need to go to the documents and hope that the information is there, because a large chunk of that $39 billion will be from taxes. What is left will be the income that is coming from the non-energy sector.”
She described it as an election budget, filled with goodies, but not a total failure, as increases to the minimum wage, public grants and the minimum balance of the Heritage and Stabilisation Fund to US$4 billion were needed.
