Parliament approves 2018 budget review

BY: Musah Yahaya Jafaru

Parliament on Friday approved the mid-year fiscal policy review of the 2018 budget statement and economic policy of the government, after a gruelling concluding debate between the Majority and Minority.

As anticipated, there was a disagreement as to whether the economic outlook was good or not and whether the economic policies were prudent or not.

The Minister of Finance, Mr Ken Ofori-Atta, presented the budget review to Parliament on July 19, 2018 and the debate on it started last Monday.

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Concluding the debate the Minority Leader, Mr Haruna Iddrisu, said the economic outlook did not look good.

He wondered why the government was seeking to increase revenue through increase in taxes, if the outlook was good.

Mr Iddrisu said the claim by Mr Ofori-Atta that the increasing depreciation of the cedi was due to external pressures was flawed.

He said when the cedi was depreciating in the past, there was no attribution to external pressures.

"Which external pressure. In the past were there no external pressures," he wondered.

Tax increases

Mr Iddrisu, who is the NDC Member of Parliament (MP) for Tamale South, accused the government of not being sincere with the issue of the realignment of 2.5 per cent Health Insurance Fund Levy and the 2.5 per cent Ghana Education Trust Fund (GETFund) levy on VAT to a flat levy.

He argued that the conversion from input tax to output tax would definitely lead to an increase in tax.

Mr Iddrisu said the minister should have made it clear to the public, the quantum of increase and where to pay it.

That, he said, was in line with the principle of economics, which called for certainty.

NHIS, GETFund, distressed

The Minority Leader said the National Health Insurance Scheme (NHIS) and the GETFund were in distressed situations.

He added that there was difficulty with the payment of teachers' allowances, book and research allowances and lack of funds to embark on projects.

Therefore, he said, the money that should be raised through the levy should be dedicated to the NHIS and GETFund, instead of expending it on other areas.

We told you so

Mr Iddrisu said the free Senior High School (SHS) education policy was a laudable policy but indicated that the government should have had a dedicated fund for it.

"We told you so. To sustain it, you should have a dedicated fund", he emphasised.

Mr Iddrisu said given the huge investment in the policy, the government should have considered the impact.

Economy on track

Concluding the debate for the Majority side, the MP for Atiwa East and Deputy Minister of Finance, Ms Abena Asare Osei, said the economy was doing very well.

For instance, she said, fiscal deficit had reduced, inflation gone down, debt to Gross Domestic Product (GDP) ratio reduced, while growth rate had gone up.

Additionally, she said, 90,000 more students got enrolled in the free SHS.

"The economy has really improved from what we inherited. The economy has really recovered from what we inherited", she stressed.

Ms Osei said the non-oil sector was outperforming the oil sector, which, she said, was due to the good economic policies of the government.

She said the government was poised to growing and sustaining the gains in the economy.

Ms Osei explained that the new tax measures were prudent moves by the government to generate more funds to undertake programmes aimed at improving the human capital, developing infrastructure and creating jobs.

She said the government had paid more than GH¢1 billion arrears of the NHIS.

Besides, the government had a plan to settle all outstanding government arrears, she added.

New social ownership

Ms Osei said the call by Mr Ofori-Atta for social ownership should be accepted by all and urged that all Ghanaians should support the government to implement its policies.

She said the criticism of government policies without considering their impact on the people was not the best for the needed national discourse.