Budget Debate Speech 2013 of Honourable Mohamed Irfaan Ali, Minister of Housing and Water and Minister (ag) of Tourism, Industry and Commerce
Mr Speaker, allow me first of all to congratulate the Honourable. Dr Ashni Kumar Singh and the staff of the Ministry of Finance for the production of a budget that seeks to realize the dreams of Guyanese, that seeks to set the framework through which Guyana would move forward and its people would advance. Budget 2013 is the embodiment of hope, the spirit of optimism, and the definition of the Guyana Dream. The future is ours. This is Guyanaâ€™s time waka waka!
Mr Speaker, it is not my intention to be dragged along an aimless road of negativity. It is not my intention to be dragged into a debate that seeks to castigate Guyana and does not analyse the plans that reside in the budget to take us forward.
In the more than one hour of rambling of the Honourable Carl Greenidge which concluded a few seconds ago, he failed to address or acknowledge not one of the ten measures set out by the Honourable Minister of Finance. This is what I call slight of hands. The argument that VAT brings a burden on the poor and the consumers without acknowledging the fact that the 16 per cent VAT replaces a 30 per cent consumption tax is a slight of hands. That is slight of hands! The Honourable Member degraded us by saying that we missed the lecture on public finance, but this dear professor, Carl Barrington Greenidge, the Honourable Champion of the Poor, and the man who knows exactly what to do to improve the conditions of the poor, in 1990 had this to say and I am quoting from the budget speech of 1990 by the Honourable Carl Barrington Greenidge:
The Government was of course especially concerned about the rise in the price of certain essential goods. The retail price of rice, for example, rose by 224 per cent in the first two months after devaluation and that of cooking gas rose by 244 per cent.
Mr Speaker, as I have said, it is not my intention to prolong and recap the state of Guyana when it was known as a state of hopelessness, but over the last seven years this government has transformed the economic landscape of our country. This government has created a stable business environment that encourages both domestic and foreign investments. Mr Speaker, may I say that for every single one of the statements I make here I will substantiate them with facts a bit later. We have improved the quality of the countryâ€™s social and physical infrastructure;improved access to shelter through the provision of housingfor low income households;expanded the economic base of the countryâ€™s so that it is more resilient to external shocks;improved the competitiveness of the domestic economy; improved the countryâ€™s human capital;strengthened the national institutions responsible for safety, security and justice;reduced poverty and inequality;maintained fiscal prudence;and most importantly restored hope in Guyana.
Mr Speaker, let us examine some macro-economic fundamentals. Let us examine facts surrounding Guyana today. Over the last seven years, our economy grew by an average of 4.5 per cent. When we compare this to what obtains in other countries within the Region, we would see that during the period 2006 to 2011 Guyana grew at 4.53 per cent compared to 0.73 per cent, negative 0.03 and 2.82 for Barbados, Jamaica and Trinidad and Tobago, respectively. Mr Speaker, this is not what the Minister of Finance said; this is what is reported in the ECLAC â€ś2012 Economic Survey of Latin America and the Caribbean.
Mr Speaker, let us look at GDP per capita which would give us the average income and improvement in the well-being of our citizens. The GDP per capita increased from US $1,694 in 2006 to US $3,148 in 2012. Isnâ€™t this progress? Isnâ€™t this advancement in our economy?
Mr Speaker, one may argue that an increase in GDP per capita can have inflationary effects, but this has not been the case in Guyana because of the same measures that the Honourable. Member, Carl Greenidge characterised as â€śblack holeâ€ť measures â€“ it is the subsidies on key and important commodities and services that this government took on behalf of the people of Guyana to ensure that inflation rates remain stable. He may call it black hole measures, but it is because of measures like these that we have inflation decreased to 3.5 per cent.
Mr Speaker, the Honourable Member raised the question of foreign direct investment. What is evident in relation to this? The growth in foreign direct investment between 2006 and 2012 trended upwards and amounted to US $1.326 billion. Our foreign direct investment in 2006 was US $102.4 million; our foreign direct investment was US $293.7 million.
Mr Speaker, this is a direct result of the confidence that investors have in Guyana, the confidence they have in our economy, and the confidence they have in this PPP/C government.
Mr Speaker, let us look at domestic investment. The best indication of the expansion in domestic investment is the growth in loans and advances to business enterprises by the banking sector. We have seen a growth in advances and loans to the private from GYD $30.6 billion in 2006 to GYD $82.6 billion during 2012. So we were able not only to stimulate foreign direct investments but also to build the confidence of our local investors in Guyana to the extent that they have expanded their investment portfolio.
Mr Speaker, for the avoidance of any doubt, and the Honourable Carl Greenidge made a statement that there is some consensus somewhere out there that we are not aware of, which seeks to portray Guyana as a country facing tremendous difficulties, let me quote some of the consensus that we would provide evidence for.
Kari Grenade and Denny Lewis-Bynoe in their study entitled â€śReflecting on Development Outcomes: A Comparative Analysis of Barbados and Guyanaâ€ť which was published in the Journal of Eastern Caribbean Studies showed that growth in the local economy outpaced that of Barbados since 2006. According to the authors, sound macro-economic management, institutional strengthening coupled with deeper social cohesion and political stability contributed to this outturn.
More recently, Karie Grenade and Sukrishnalall Pasha in a study entitled â€śAccelerating Guyanaâ€™s Growth Momentumâ€ť which was published in the Journal of Developing Country Studies last November revealed that the local economy posted above normal growth rates between 2006 and 2010. According to this study, the local economy grew at a faster rate when compared to countries in Latin America and Caribbean due partly to higher domestic investments, foreign direct investment net flow and trade. The study also noted that the rate of economic growth between 2006 and 2010 was significantly higher than rates reported during the period 1998-2005.
The 2012 Survey by ECLAC noted the following about our growth prospect for 2012:
In the English and Dutch speaking Caribbean, the strongest growth will be posted by countries with natural resources endowments, especially Suriname (4.3%) and Guyana (3.8%), while the other countries in the sub-region will see growth of between 1.0% and 3.0%.
The Caribbean Economic Performance Report for Jan â€“ June 2012 by Caribbean Centre for Money and Finance also noted:
â€¦ the commodity based economies of Guyana and Suriname are expected to record growth in excess of three per cent in 2012 and 2013 with Trinidad and Tobago continuing to experience slower growth over this period due to continuing challenges to business and consumer confidence.
Meanwhile the International Monetary Fund Article IV Surveillance Report for 2011 noted the following:
Guyanaâ€™s future looks brighter, despite the many challenges. With a fifth consecutive year of economic growth, Guyana is beginning to lock in gains from recent years of fiscal consolidation. Prudent and sustained macroeconomic policies have developed resilience in the face of external and domestic shocks. There are growing indications that the private sector is building up major plans for the exploitation of Guyanaâ€™s sizeable natural resources, while the public sector is proceeding with large investments in infrastructure, including in the electrical sector. Over the medium term, the LCDS should help Guyana compete better on the global stage and unleash opportunities for lowering poverty.
Let me say again what the IMF said: â€śâ€¦and unleash opportunities for lowering poverty.â€ť Every piece of evidence here, Honourable Carl Greenidge, has debunked your rambling about Guyanaâ€™s future and none of it comes from the Minister of Finance â€“ they all come from external and independent sources.
Let me give you one more. The World Bankâ€™s Global Economic Prospect for 2011, while noting that there are threats to the United States economy and the struggle by European countries, argued that Guyanaâ€™s economy is projected to grow by 5.6 per cent during 2013.
The story continues. I have a booklet that I will publish on all that is being said of Guyana even as I speak here now.
Mr Speaker, as a result of our economic success, we are no longer classified as a Highly Indebted Poor Country. Let us speak of the issue of debt sustainability. Listen to this: as a result of our economic success we are no longer classified as a Highly Indebted Poor Country (HIPC) but now reclassified as a lower middle-income developing country. In international publications, we are no longer characterized by a shortage of critical consumer and inter-mediate goods (fuel, food, machinery) or the foreign exchange necessary to acquire these goods. Instead, we are a nation on the move with an economy that is posting high growth rates; one which is creating greater opportunities for our citizens. For the first time, we are witnessing return migration and investment by both foreign and local investors which speaks to renewed confidence in the economy.
Mr Speaker, this is what we call the â€śGuyana Dreamâ€ť and this is the dream we will seek after until every single Guyanese inherit a piece of this dream.
Mr Speaker, it is time for all of us in this House to strip ourselves of selfish desires. Let us unite. Let us put our hands together to ensure that every Guyanese can live the Guyana Dream â€“ the Guyanese Dream of owning your own home, the Guyanese Dream of having equal access to education, the Guyanese dream of having equal access to health care.
Mr Speaker, the Honourable Member spoke on the issue of building human resource capital and the lack of human resource capital, but what he failed to realise is that in this budget the Minister of Finance is making GYD $52.2 billion available for expenditure in health and education alone. The ICT strategy which is aimed at young people and single parent is testimony to the fact that youths and vulnerable sections of our society form the core group which this government is seeking to remove from poverty and to improve their living conditions.
Mr Speaker, the Honourable Carl Greenidge just woke up and realised that he needed to say something on pro-poor approach. I wish to send him back to the Budget Speech 2006 of the Honourable Dr Ashni Kumar Singh where he will find that the entire medium term strategy of Guyana was premised on the pro-poor approach to growth and development. Not only now but the entire medium term was premised on the pro-poor approach to growth and development.
Mr Speaker, let us answer the very important question of availability of finance. We can say that the government has a big capital programme. We can say that the mining sector is doing well. I have heard the argument in this House and elsewhere that the construction sector is doing well but we must beware of a bubble. Yes, we must be careful, but let us look at the financial soundness and viability of our local financial institutions.
Mr Speaker, a casual examination of the prudential indicators on financial soundness and stability would reveal that the banking system is adequately capitalized, highly liquid and capable of coping with various risks. The capital adequacy ratio of the LFIs stood at 20 per cent as at end-December 2012 when the internationally accepted benchmark is 8 per cent. 20 per cent is our ratio when the internationally accepted benchmark is 8 per cent. The local financial institutions remain viable and financially sound. Why is this? It is because of the policies, the institutional strengthening, and reforms that the Minister of Finance led in modernising the financial sector of this country.
Mr Speaker, having said this, it is not surprising that our banking system is ranked 30 out of 142 countries in terms of soundness. We are ranked at 30 out of 142 countries in terms of our soundness. Who ranked us? It is not the Minister of Finance who ranked us. It is the World Economic Forum 2011-2012 Report.
Mr Speaker, in other words, our financial reforms are responsible for greater access to credit and at lower cost by the local private sector â€“ not only access but also lower cost. Why do I say this? Loans and advance to business enterprises as a per cent of GDP was 24.15 per cent during 2012, compared to 14.15 per cent in 2009. The average lending rate - I am not going down that old road, Mr Speaker, when the average lending rate was 42 per cent â€“ as at December 2006 was 13.12 per cent while the average lending rate today is 10.1 per cent. So not only is access to capital abundant, but more importantly the cost of capital has also been reduced.
Mr Speaker, the Honourable Member raised the question of the cost and ease of doing business. I am most willing and ready to answer him. The Minister of Finance recognises that not everything is perfect. He recognises that in living the Guyanese Dream we would need to improve ourselves. That is why he outlined and made it very clear that there are approximately 60 measures that we are going to put in place to improve our ranking in the Doing Business Index. We are setting ourselves a target that once we accomplish the implementation of these 60 measures in five years we are going to move our ranking from its present position to 80 â€“ in line with Latin America and the Caribbean.
Mr Speaker, let me just edify the Honourable Member, Carl Greenidge. The action plan would be enacted over 2 to 3 years, and consists of more than 60 competitiveness and efficiency- enhancing reforms which will be implemented in a coordinated manner across 10 targeted policy areas; namely, starting a business, dealing with construction permits/licences, getting electricity, registering property, getting credit, protecting investors, paying taxes,trading across borders,enforcing contracts, and resolving insolvency. These are the broad areas in which we have targeted measures that will result in our ranking improve dramatically in the next five years.
Mr Speaker, at first they asked us why we didnâ€™t do this? Now they are asking why we didnâ€™t do it five years ago. Mr Speaker, come on. What are we really doing here?
Mr Speaker, poor infrastructure characterised the Guyana that the Honourable Carl Greenidge presided over when he was Minister of Finance. He now raises the issue of SIMAP programmes that targeted investments and pro-poor approach to growth and creation of wealth. What he did not say under his typical sleight of hand approach was that Budget 2013 provides GYD $27.7 billion â€“ 13.3 per cent of the Budget will go towards programmes that would have been implemented under SIMAP.
Mr Speaker, let us now turn our attention to structural production transformation. The Marriott Hotel, for instance, would yield estimated positive net present value of US $6.5 billion over a ten-year holding period. This is equivalent to a rate of return of 11 per cent. The total wealth creation (or value added) impact of the project is estimated to be approximately $17.4 billion during the construction phase.
Mr Speaker, if you look at the Cheddie Jagan Airport (CJIA) Expansion based on economic feasibility studies the project is expected to yield an internal rate of return of 11 per cent. The CJIA has experienced continuous growth in passenger traffic over the last ten years. The official statistics show that passenger arrivals increased from 99,317 passengers in 2001 to 156,910 during 2011 (an increase of approximately 58 per cent). During 2012, passenger traffic increased further by 16 per cent â€“ significantly higher than what was experienced worldwide (5 per cent) and in Latin American and Caribbean Region (8 per cent). Mr Speaker, the source of the statistics on passenger arrivals is the Cheddie Jagan International Airport.
Mr Speaker, let us now look at what the Honourable Member, Carl Greenidge, sought to ignore in his presentation by his usual slight of hands approach. Let me show you how these measures would ensure that Guyana continues to progress, to ensure that the poor and most vulnerable are secured and their livelihood is protected. The Honourable Member referred to this issue of sugar and GPL as a â€śblack holeâ€ť approach. The Honourable Member said that sugar workers are our problem. Well, Mr Speaker, let me make it astoundingly clear that if sugar workers is our problem, it is a problem that we happily accept! For us, sugar workers and the sugar industry is not a problem, but a solution and an opportunity for Guyana! At no time will we abandon the sugar workers and the sugar industry. Call it the PPP problem, call it bail out, call it black hole â€“ we are going to stick with it.
Mr Speaker, in similar vein we believe in the bauxite industry. So we are going to stick with it; we are going to work with it; we are going to fix it.
Mr Speaker, we believe on this side. We believe in the Guyanese Dream. We believe in the opportunities. We believe that Guyana comes first. We believe that Guyanese come first. Nothing that you say would stop us from believing. Nothing that you say would cause us to lose hope. Like President Obama said, â€śHope is essential for success.â€ť For us, hope is the foundation on which we stand for the future of Guyana.
Mr Speaker, the GYD $1 billion transfer to assist Guysuco to implement its transformation plans and the value of Guysuco to our economy cannot be overlooked. The value of Guysuco to our economy extends beyond financial considerations, that is, the profitability of the organisation. The value of this industry must be seen in its wider macro-economic context. We must be mindful of the wider socio-economic implications it is no secret that this industry employs approximately 18,000 persons directly, but more importantly it supports at least 100,000 persons indirectly, that is, 24,000 households. Donâ€™t call it a dark hole. Donâ€™t do it! This is the lives of 24,000 households! Donâ€™t say it is our problem. You cannot be responsible and say that. Mr Speaker, let us be responsible. People are looking at us. People are listening to us. Let us provide the kind of leadership that people expect us to provide. Join us, Honourable Carl Greenidge, and let us be nationalistic for once. Let this policy work for the people. Let it safeguard the industry and the lives of thousands of Guyanese.
Mr Speaker, furthermore Guysuco earn in excess of US$100M annually from its exports. If this corporation is allowed to fail there will be considerable foreign exchange loss to the economy. The impact on the foreign exchange currency market would have wider implications for the national economic well-being. It would threaten exchange rate and price stability, with implications for the import of critical capital and consumer goods. Moreover, declining foreign earnings could trigger depreciation in the exchange rate.
Mr Speaker, let us now look at the support to Guyana Power and Light Inc. (GPL). The GYD $5.8 billion support GPL cash flowrequirements represent an effective subsidy of approximately $34,940 per consumer per annum. In rejecting this subsidy, are you saying that you are going to deny the ordinary Guyanese of that incentive where the government is taking up a cost of almost $60,000 on their behalf? Of course, Mr Speaker, they must concern themselves because this subsidy is what is going to mitigate against tariff increases. Is it a case where the Honourable Carl Greenidge is saying that we must allow the 28 per cent increase to be passed on to the consumer? We say NO. The gains from the economy must be translated into benefits for the poor and vulnerable!
Mr Speaker, the Honourable Member asks what benefit will it bring to GPL. The capital injection will also reduce line losses by 2.2 per cent, which will translate into savings amounting to GYD $596.2 million annually. This is a cost saving of GYD $596.2 million dollars annually.
Mr Speaker, let us look at Linden Electricity. GYD $2.9 billion will be set aside to meet the cost of maintaining electricity subsidy in Linden and Kwakwani. This translates into a subsidy of $279,801 per customer per annum.
Mr Speaker, the Honourable Member defines Pension as â€śOld Age pensionâ€ť, but the old age supplement is given to ease the burden of vulnerable persons in our society, especially the elderly. What is the real value? The real value for the more than 42,500 elderly citizens is not only the increase of 25 per cent. This represents an additional GYD $590 million in disposable income to senior citizens. If you add the subsidy for water and the subsidy for electricity, you will see the real benefit of $18,745 per month. Honourable Khemraj Ramjattan, it is $18,745 per month and not $15,000.The pensioners in Linden are likely to benefit more. In fact, a pensioner is Linden will get approximately $39,150.33 monthly (consisting of water subsidy â€“ $1,666.67, electricity subsidy â€“ $1,666.67 and national electricity subsidy â€“ $23,317) which is twice the national average.That is the reality. Mr Speaker, the Honourable Member asked about tax reforms. Well although we have not received the report as yet, the government is sticking to its commitment to have reforms that would bring benefits to our people. Let us assume that a company owns net property amounting to $40 million. Under the previous structure, the company would be liable to pay taxes of $276,000. Under this new structure, that same company would be paying only $187,500. These are small companies. Let us look at property tax on individual. Under the previous structure and assuming a value of $40 million, companies would have been paying $231,250. Under the new structure, this is substantially reduced by almost $35,000.
Mortgage Interest Relief. Let us look at a low income earner in the upper limit as structured by the banking sector. Under this relief you will see that if that tax payer â€“ here we are talking about young people owning homes for the first time â€“ if they take the cost savings as a result of the interest rebate and apply it to the principal they will save two months each year. When this is translated to a 25 years loan, they will save more than 4 years from their loan repayment. If you now put that in cash, and you multiply 48 months by $40,000 per month, you will get the cost savings that would resound to the young people who are first time home owners.
Mr Speaker, I wish to turn to tourism. Mr Speaker, let me be the first to say that I agree that we need to solve the issue of airlift for Guyana in a holistic manner. We have to solve it. We must find that solution. The government is aware of this. That is why we are launching a public private group to go to Atlanta where most of the head offices are to negotiate and find that solution for Guyana. We need to create a new culture. We need to create a culture for the tourism sector.
Mr Speaker, we need to understand what the value of a tourist is. We need to understand the value of tourism. In understanding the value of a tourist, we would understand the magnitude of change we need to make in our culture. We are going to start that process, Mr Speaker. We need to remove barriers in the tourism sector. That is why the investments in the new airport and the investments in hinterland airstrips are important components of the tourism action plan.
Mr Speaker, nowhere else in this Region can a municipal airport boast of an average of 100 take offs per day! The Ogle Airport Inc. can boast of 100 take offs per day! I ask the Honourable Members to name one other municipal airport in this Region that can boast of this.
Mr Speaker, tourist arrivals in Guyana increased by 12.6 per cent, surpassed only by Mexico (14.5 per cent) and this is the statistics coming out from the Caribbean Tourism Organisation. Room stock moved from 1,716 in 2006 to 3000 in 2012 and the Marriott Hotel would add a further 195 rooms. To verify the fact of the increase, Mr Speaker, I wish to inform this House as follows. Kaieteur National Park had an increase of 142 per cent in 2012 over 2006. Arrival at Kaieteur National Park in 2006 was 2,754; arrival in 2012 was 6,657. Let us use a private enterprise. In 2006 Arrowpoint Resort had 2,880 visitors; in 2012 Arrowpoint had 3,840 visitors â€“ an increase of 33 per cent.
Mr Speaker, it is now time for us to focus on our imaging. We have to develop an image for Guyana. That is the image that would sell us to the world. That is the image that would drive traffic directly to us. Let us look at some of the potentials that exist through the testimonials from articles and celebrities:
1. â€śGuyana â€“ Avatar on Earthâ€ť â€“ Bob Payne, Conde Nast Traveler Article
2. â€śGuyana is South Americaâ€™s Biggest Little Secretâ€ť â€“ BBC Wildlife Magazine
3. â€śTotally Tropicalâ€ť â€“ Mike Weedon , Birdwatching
4. â€śIn Godâ€™s Gardenâ€ť â€“ Wanderlust magazine
5. â€śâ€¦if you want to see wildlife, Guyana wins hands down â€“ it is just stunningâ€ť â€“ Mike Russell, People and Wildlife Manager
6. â€śThis is a lovely country. Kaieteur Falls is magnificent and I head that you have to drink the water to returnâ€¦ I would definitely do thatâ€ť â€“ Ms Leila Lopes, former Miss Universe
Mr Speaker, I want to say this. The cultural change for the tourism sector must start here. here it is that I am describing the positive image of Guyana in the eyes of celebrities and international publicists and this is how the other side of the House is behaving.
7. â€śThis is an amazing country, the people are warm and there is so much beauty here. I would tell all of my friends to make a trip to Guyana,â€ť â€“ Ms Anna Maria Horosford â€“ An American television and film actress.
8. The spirit of ecology is everywhere. The children are very proud of their environment which is not often found in todayâ€™s worldâ€ť
9. â€śMy trip showed me a new way of travellingâ€ť
10. â€śKaieteur is an untouched splendour. Amazing to find such an incredible sight that is still so pristine. Keep it that way Guyana!â€ť
Mr Speaker, appearing on "The Late Show with David Letterman" on June 27, 2012 actor Channing Tatum shared details on an intense 10-day excursion he took into the Guyana rain forest and said, â€śit was truly one of the most beautiful things I've ever done.â€ť
Mr Speaker, we must drive traffic to Guyana and we want to target our diaspora aggressively. We have launched the Re-discover Home campaign and we are taking this very seriously because that market has a potential of in excess of 1 million persons. It is our view that in the first 2 years can target at least 30 per cent of that market. In doing this we are creating packages around national events and holidays. Several packages were developed to encourage this and are being advertised in the international media.
Ms Speaker, we also have to target new markets, develop holiday packages targeting back-packers and students for adventure tourism. To this end, we have a team of young volunteers who will go to the University of the West Indies and try to lure students into this amazing adventure of Guyana so that they can come here and enjoy their summer vacation.
Mr Speaker, sport fishing, the yachting rally in late September, the birding festival, among others, are all part of the special markets that we are targeting.
Mr Speaker, there are presently 30 new tourism projects that are currently on their way amounting to a total of GYD $39 billion. We have Triple A Investment, Da Silva Grand, Wind Jammer International, Oxford Flight, Roraima Duke Lodge, Platinum Inn, the advancement in Guyana Pegasus, Millennium Manor â€“ all of these businesses are part of this grand plan where more than GYD $39 billion would be invested by the private sector to boost the tourism sector.
Mr Speaker, I wish to turn quickly to housing. Our vision remains â€śA nation housed in sustainable settlementsâ€ť. The overriding objectives of CH&PA programmes for 2013 are premised on the following:
1. Continuing to facilitate access to decent housing by all Guyanese;
2. Increasing the ability of Government to address the needs of special groups for suitable affordable housing;
3. Enhancing the ability of homeowners to improve and expand existing shelter;
4. Consolidating and expanding partnerships for sustained growth of the housing sector;
5. Providing houses to targeted groups (vulnerable groups, professionals, moderate income persons);
6. Continuing to stimulate local economic development;
7. Creating the environment for transitioning
8. Empowering communities through participatory planning and development
In terms of squatter regularisation, we had a total of 216 areas to be regularised. A total of 171 areas have been regularised so far, representing 79 per cent of the total squatter settlements. 45 of the areas that have not been regularised are along what we term â€śzero toleranceâ€ť zones. Approximately eight hundred (800) households are to be relocated from zero tolerance areas and this year we will work towards reducing this number substantially.
Mr Speaker, in terms of our allocation, over the last five years we have been able to allocate 28,582 house lots. There are 30,000 applications that remain in the system to be processed so we still have some amount of work to do. The average age of an allottee is 35 years â€“ young people and young professionals.
Mr Speaker, in addition to this, we will continue to host the International Building Expo. The Turn Key houses have been a hit. For a matter of fact, Mr Speaker, we have constructed almost 300 of these homes and the demand for these homes is increasing significantly. But through economies of scale we are able to construct these homes at an average cost of $6,000 per square foot while the national cost is approximately $9,000 per square foot. We are constructing homes for professionals at $7,000 per square foot while the national cost is approximately $10,000 per square foot.
Mr Speaker, we have developed many partnerships. The public private partnership, partnership with the professional groups, partnership with clerical and service sector workers, partnership with construction companies and hardware suppliers, and partnership with financial institutions.
Mr Speaker, it is our hope that through these partnerships we would be able to target specific groups, to meet their needs, and to fulfil their expectations. We endeavour to meet their decent expectation of owning their own homes, of realising the dream of their family living in their own homes and turning their own key. It is this great Guyana Dream that we will work hard to realise and in want to publicly, on behalf of the many young people who will be first time homeowners, to thank the Minister of Finance and his staff for ensuring that the measures were put in place to accommodate, fulfil and advance the dream of these young professionals.
Mr Speaker, for the poor, the vulnerable, and the disadvantagedwe will continue our Core Homes project. We will continue to ensure that we reach out to that group to fulfil their dreams. We will ensure that we create infrastructures and build the mechanisms so that every single Guyanese would be home owners so that their lives could be advanced.
Mr Speaker, I wish to turn briefly to the water sector. We have developed a strategic plan for the water sector that would see the company break even in the next four years. Our objective is to ensure the company break even within the next five years. In that plan we are seeking to reduce non-revenue water from 65 per cent to 35 per cent; increase of treated water coverage from 49 per cent to 80 per cent; develop an Integrated Water Resources Management strategy; improvement in energy efficiency; improve sewerage disposal efficiency; increase collection efficiency from 70 per cent to more than 90 per cent.
Mr Speaker, I am brave enough to put the targets that we have set ourselves and we are confident that we are going to achieve them. We are confident and we will hold ourselves accountable for the achievement of those goals and targets.
Mr Speaker, we hope that the Opposition would facilitate the accomplishment of these targets by giving their support to the Budget, by ensuring that the budgetary injection is given.
Mr Speaker, let us look at what would be the impact of the investment in the water sector on the economy. There will be generation of demand for almost 10,000 sacks of cement; 2,500 loads of sand; 15,000 cubic metres of stone; 5,000 metres of timber; 25,000 pipe lines. These will all have a direct link to manufacturing, mining and other sectors of our economy. This is the impact of the budget. This is what this budget brings to our people. this is the hope that it creates.
Mr Speaker, I want to conclude by saying that all of us must band ourselves together this afternoon. We must send one message to the people out there and in one voice. That message is that all of us here care about the Guyana Dream and all of us want to be part of the Guyana Dream so from today we are launching Operation Guyanese Dream! From today let us all live the great Guyanese Dream.
Mr Speaker, the Honourable Minister of Finance noted in his presentation last week that Budget 2013 makes provision for everyone including the 42,500 pensioners will be part of the Guyanese Dream; the 184,000 tax payers who will benefit from a reduction in the personal income tax rate and be part of the Guyanese Dream; low income households and young professionals with first mortgages will now be able to repay their mortgages in shorter time period resulting from the mortgage interest relief and accomplish the Guyanese Dream; the 18,000 workers directly attached and 100,000 indirectly will benefit from fiscal support to Guysuco, realising the Guyanese Dream of a decent standard of living; hinterland communities will benefit significantly from the Land Titling and Demarcation Programme realising the Guyanese Dream; Hinterland Scholarship Programme to benefit 388 students realising the Guyanese Dream of a decent education; single parent mothers will now be able to access a first time loan under the expanded WOW programme, realising the Guyanese Dream; over 64,000 school children will continue to benefit from the school feeding programme, living the Guyanese Dream â€“ this is the Guyanese Dream; the dream that was never there but this government has ignited in all Guyanese.
Mr Speaker, small and medium scale businesses will receive collateral guarantees, interest subsidy, grants, business development services which include business management and technical skills training, and other technical support; more than 166,000 consumers of GPL as well as the 10,363 consumers of Linden will continue to benefit from subsidized electricity. These are the legitimate dreams of our people. Businesses and private individuals with significant net assets will now benefit from the adjustment in the property tax regime; some 180 street dwellers to benefit from the completion and operationalization of the Centre for Rehabilitation and Reintegration at Onverwagt; some 200 elderly persons who reside at the Palms Geriatric Institution will now benefit from improved care at the institution; over 2,500 young people will now benefit from training under several programmes; $1.7 billion set aside for the University of Guyana will benefit student pursuing various areas of studies.
Mr Speaker, it is this Dream, it is this hope that we have built this Budget. This is hope for a better Guyana. This is hope for an improved Guyana. This is the hope that all our people will prosper and have improvements in their lives. It is this hope that will see every Guyanese accomplishing their ambitions right here in Guyana. Together we will; together we must; together we will move forward; together we shall! I commend Budget 2013!