Budget day is one week away, Oct 7th. I figured before allyuh get overwhelmed by the pre-budget drivel in the media this week, I would get an early jump with my drivel. This post kinda long so may want to take breaks and pace yourself.
While pondering the mysteries of the universe during my daily meditation and trying to keep the head & shoulders from running into my eyes, I decided that instead of doing a boring post budget write-up, I would put out a guide of sorts so that you can do your own analysis and I could focus on more important things like Miami Carnival.
Ok so the basics, a national budget is no different from your personal budget, assuming you have one, which you should. Just like you need to know how much money coming in so that you could know how much Stag, aloo pie and boat ride it could buy, so too the government needs to plan its affairs.
I’m not going to bore you with a discussion on where our income comes from and where the expenditure goes, I’ll leave that riveting discussion to the Honourable Minister of Finance. What I want to touch on is what happens when you spend more than you earn. Yup the so called ‘D-word’. Relax ladies, I’m not sending any ‘baigan’ pics to your inbox. I’m talking about the term “Deficit”, which is what they call it when a government’s expenditure is more than its income. It doesn’t matter if you’re an individual, a parlor or government, being in too big a deficit for a long time is not a good look.
So what are your options when you’re in a deficit? Well as a person you can borrow from your family, which I highly advise against because any time you’re late with a payment aunty Cheryl will tell everyone at the next Harry’s Water Park family outing how yuh borrow money and can’t pay her back because you spend it on the chicken head girl yuh dealing, the heffer with the big hoop earrings and Jordan’s.
However, most likely you would pay for the extra spending by winning a Play Whe mark or using your credit card. It’s the same with the government. If the income they anticipate is not enough to pay for all the stuff the country needs/wants the government makes up the difference by borrowing either locally or internationally.
Now before and after the budget people will try to scare you about the D-word. They may even try to make you think it’s the D-word that cause yuh man/woman to horn you. But do not be misled my brothers and sisters. There’s nothing wrong with a deficit per se, if it’s for the short-term and if it’s done to pay for income generating activities, what we finance people call “capital expenditure” (yeah we fancy like that).
However, if you keep going into a deficit to make box drain and pave road, only for WASA to come and dig it up then that’s not cool. Therefore for any new initiative in the budget, always always always ask yourself how much is this REALLY going to cost, who is going to pay for it and is it REALLY worth it?
Now if you max out your credit card drinking on the Avenue or in Wonderful World, your minimum payment might reach the size of a mortgage for a 1 bedroom in Trincity. If you don’t pay your credit card on time your credit score suffers and then you can’t even take an ironing board from Kirpalani’s on “terms” or a bailiff coming to take granny enamel Milo cup.
So too if the government is in a deficit for too long and the amount of money they owe gets too large then their credit score (credit rating) will suffer and people will charge them a lot more to borrow money or they won’t be able to pay their debts and have to go by uncle IMF for help. Don’t let people scare you about Uncle IMF either, he’s just misunderstood. (I’ll dig up my write-up on him for allyuh).
Another thing to remember when looking at the budget is that no matter what they promise you, a lot of it still has to go to Parliament to be approved. It’s like a man telling he padnas he going all kinds of lime but he knows in the back of his mind he still has to clear it with the woman at home. Not me though.
Finally, keep an eye out for those projects and initiatives that seem to keep coming back like a bad rash or an Ex. A hospital or a police station that somehow can’t seem to be completed. I personally feel there is a budget template with standard initiatives and they just keep updating it with a couple numbers.
Anyway, that’s all for now boys and girls. Stay woke!