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Weathering the storm: Raffique gives his financial forecast for T&T

Tomorrow’s Budget presentation by Finance Minister Colm Imbert is the most eagerly anticipated Appropriation Bill in many years.

The main reason for heightened interest is the depressed state of the economy. With low oil, gas and commodities prices, hence lower-than-normal revenues accruing to government, citizens are waiting to see just how the new administration proposes to navigate the ship of State.

Photo: Finance Minister Colm Imbert.
Photo: Finance Minister Colm Imbert.

Coming in the wake of five years of plenty, during which the People’s Partnership Government enjoyed buoyant oil prices, averaging US$85 a barrel, and revenues that allowed it to be extravagant—it spent around TT$300 billion—Minister Imbert will be seriously disadvantaged as he tries to persuade people that we must modify our lifestyles and adjust our attitudes if we are to emerge from this crisis a stronger nation.

For far too long—and that includes boom-times when the PNM was in power—people have grown to expect “de govament” to cater for their every need, from cradle to grave: remember the “baby grant?”

The many make-work programmes that were intended to cushion the jobless as they transitioned into productive labour have long morphed into permanency.

People from the lower and middle-income brackets have mastered the art of accessing free government housing, refusing to pay rents and mortgages that are scandalously low.

Squatting on State and even private lands has evolved into the right to ownership—as legitimised by the PP—that as the law-abiding who are prepared to pay for housing suffer in overcrowded silence, denied opportunities that the lawless seize by brute force.

Photo: Former Trinidad and Tobago Prime Minister Kamla Persad-Bissessar. (Copyright AFP 2014/Frederic Dubray)
Photo: Former Trinidad and Tobago Prime Minister Kamla Persad-Bissessar.
(Copyright AFP 2014/Frederic Dubray)

Under successive governments, too, the culture of dependency has straddled the class-strata.

Many contractors thrive only because they can access government or state agencies’ contracts, often through connections. If you think I refer only to persons in construction, think again. There are suppliers of goods and services who have become millionaires by feeding in the public trough, once they are prepared to give “kickbacks” to the right persons.

All of the above and more have had a negative, even deleterious, impact on productivity. This country’s economy is running on around 50 percent of its potential, and I think I am being very generous in my estimate.

In the public and private sectors, and across the strata, from CEOs and managers to shop floor workers, few people actually produce at levels consistent with what they are being paid for, and fewer still operate at optimum levels.

But I digress, only because I think of the huge challenge Imbert and his colleagues in government face as they try to convince the citizenry that we all need to adjust our lifestyles if we are to cope with the lean times ahead.

Photo: A Carnival meggie. (Copyright Georgia Popplewell)
Photo: A Carnival meggie.
(Copyright Georgia Popplewell)

To begin with, Government does not need to spend more than TT$60 billion a year, which is where the profligate PP took us over the past five years. They increased expenditure from TT$46.7 billion (2009-2010) to TT$66 billion (2014-2015), the latter since revised downward.

Why do we need to spend such a huge sum, increasing every year as if there is some unwritten rule that compels Government to so do?

Between fiscal 2009 and 2010, when oil prices fell from over US$100 a barrel to as low as US$30, government’s revenue fell from TT$49 billion to TT$36 billion, and expenditure was cut from TT$44 billion to TT$36 billion.

The country did not collapse. People did not die, en masse. In fact, the only casualty was the Patrick Manning Government, and that had nothing to do with the cutbacks in expenditure.

Yes, some increases in spending cannot be avoided. Based on pre-election industrial agreements that saw most public sector workers get a 14 percent increase, Government’s wages and salaries bill moves up from TT$8 billion to TT$11 billion a year.

Photo: A Diego Martin looks on the brighter side in the aftermath of flooding. (Copyright TTNewsFlash)
Photo: A Diego Martin looks on the brighter side in the aftermath of flooding.
(Copyright TTNewsFlash)

But there are goods and services on which significant savings can be had if fair, competitive tendering is embraced. In fact, in all such contracts that are coming up for renewal or re-tendering, Government should seek to negotiate downward.

On the expenditure side, too, large items such as GATE, CEPEP and URP must be closely scrutinised to ensure that only those who qualify benefit. GATE cannot mean open season for any quack, and the other two are supposed to offer employment on a rotational basis, not permanent.

The controversial fuel subsidy must be addressed, but on a managed, phased basis. VAT should be re-imposed on non-essential foods and social mitigation instruments, such as food cards, should be given only to the destitute, not shoppers who drive Mercedes!

Most importantly, if the Government can come close to eliminating corruption and wastage, there will be a few billion dollars available to the Exchequer.

Seriously, I think we are more than capable of weathering this economic storm.

About Raffique Shah

Raffique Shah
Raffique Shah is a columnist for over three decades, founder of the T&T International Marathon, co-founder of the ULF with Basdeo Panday and George Weekes, a former sugar cane farmers union leader and an ex-Siparia MP. He trained at the UK’s Royal Military Academy Sandhurst and was arrested, court-martialled, sentenced and eventually freed on appeal after leading 300 troops in a mutiny at Teteron Barracks during the Black Power revolution of 1970.

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9 comments

  1. Yup. Was having a discussion re: squatting issue and really this needs to be addressed. While we do need to assist almost destitute families there must be some kind of process. State land belongs to the nation. If I need housing then why should I pay market price for what I can get free. Gate really also needs to be re-evaluated as I am sure the intention was to allow access to those who would not otherwise be able to access it. Tertiary education is expensive. It ought to be that students provide information to determine need and then be approved rather than an automatic qualification. As for increases in wages the public service is not a profit making business but efforts can be made to cut costs and improve efficiency. Light bills can be lowered by taking off most lights at end of day. Cell bills can be lowered by using free services like whatsapp, viber etc. And ensuring proper tendering processes are observed. These are just some of the ways we can help reduce expenditure.

  2. Rose and Rhoda allyuh dangerous .

  3. Hahaha. Knee-high stockings Rhoda Bharath?
    Rose-Marie Ingrid Lemessy-Forde, Greece is an example to all of us. We only have ourselves to blame if we sit by and watch our economy go down the toilet.

    • I cannot sleep because Im tied up in knots over his wardrobe choices. I hope he wears cufflinks.

      • honestly,,,
        talking about Colm’s wardrobe is exactly what I expect you to be talking about for the next 5 years …

        I would not expect you to actually attack the PNM for anything wrong they do, as you attacked the PP for wrongs they did and wrongs that were entirely fictitious and unfounded …

        eg ” the racist no-rowley campaign ”

        I agree the no-rowley campaign was stupid …
        but nothing about it was racist ..
        the only racists were the people who found it racist …

        as if to say : ” once you say anything bad about Keith Rowley, even if it is factual, then you are a racist” ….

        and yes, I did just call YOU a racist …

  4. But what will imbert wear? Why aren’t we asking those crucial questions, Lasana Liburd?

  5. My philosophy is if we can cut out the “tiefing” and the wastage things would be just fine.