Noble: Past actions compromise fiscal sustainability; the cost of political trade-offs

The Dr Roodal Moonilal Ramai Trace SDMS Primary School (Sunday Express, 13 January) is a prime example of our need to examine public spending. In 2013, the school ostensibly bestowed naming rights on the MP for the TT$350,000 raised from businessmen in the area to purchase the land.

Construction reportedly began in 2014 and stopped in 2015 at a 90% completion point. The initial question: is this a silly tit for tat—the Government Campus left undone for five years so this school funding will not be found?

Research revealed, however, that this school was not listed among primary schools on the construction programme for 2011-2015 in the 8th Report of the JSC on Ministries (Group 1) Appendix V (p 265-272), laid in Parliament in May 2014!  An error?

Thirty-four schools (11 with 2013 start dates) on the list of 44 were listed as having 0% completion; but no school in Ramai Trace was listed. Who funded this school? How could this school, unlike others, be fast tracked in this timeframe?

Revenue is raised for three reasons: public goods that benefit all, redistributive actions that benefit some, and diversion which benefits the politician but hurts the voters.

Decisions are made by politicians, on both sides, who are perpetually in competition for political office. With the lowering trust in government, there is greater demand for transfers offering immediate gratification. Our tribal instincts box us in from achieving our country’s best long-term interests.

We grab like the proverbial ‘crab in a barrel’ and watch each other’s share. We ignore the multilateral financial institutions and quarrel with each other. Prime Minister George Chambers’ ‘Accounting for the Petro-Dollar’—facilitated by Dr Euric Bobb—is a vague memory.

Past spending compromises future sustainability. A 2018 IADB report (p 36) shows Trinidad as the worse example of this in our region. More than 35% of GDP goes in public spending.

The IMF (International Monetary Fund) reprimanded and warned in March 2016, “…taking into account the size of energy revenue windfalls, the country has under-saved and under-invested in their future… could lead the country to uncomfortable levels of debt…”

In 2008-2009 we put more money in the HSF (Heritage and Stabilisation Fund) than we did in 2010-2015. Yet in 2011-2016, dividends to the Treasury increased sharply to TT$19.5 Billion.

NGC alone contributed 3% of GDP ($4.6 Billion) from its equity in 2015. Both the IMF and the IADB (Inter-American Development Bank) hint that these monies were not well-spent. Is this not something that we ought to consider today as we look forward to the future?

By September 2018, IMF commented that our spending splurge reduced our ability to manage the downturn. Should we blissfully move forward and ignore?

Trade-offs are the essence of life. Are we comfortable with the thinking that led to retrieving the infamous fire truck and to have a primary school appear apparently unannounced in our public spending?

Our country’s car is in the ditch. Are we comfortable with the current trade-offs? Past performance is not necessarily a predictor of future performance, but the nature of government depends ultimately on the men who run it and our circumstances (Kay 1956).

With our structural issues within the economy, bad tasting medicine is required to protect our future generations. Quick budget fixes only deal with the symptoms.

What do we want? A glib talker to seduce us?

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