With the national budget having just been read, one matter which ought to be engaging the attention of the Minister of Finance is transfers and subsidies. This writer has, on occasion in the past, sought to urge the authorities to address what, to him, are the serious impediments to the national welfare by tackling head-on the ever-increasing growth in this item in the national accounts.
Indeed it is to be noted that the Finance Minister has himself disclosed that this item accounts for approximately 60 per cent of the national budget.
It is also to be noted that another Minister, Mr Vasant Bharath, while recognising the desirable need for action, has nevertheless directed attention to the social fallout were subsidies to be reduced.
Indeed, it is now clear that with general elections in the offing, one cannot expect any meaningful action in this regard. Lessons from the NAR administration should have taught us that implementing policies which would hit the pocket of the voter must take place early in the electoral cycle, failing which, could certainly lead to electoral disaster.
The history of granting subsidies and transfers on a large scale may be said to have had its origin during the early years of the PNM administration when the state sought to bring relief, on a relatively large scale, to the relatively poor and dispossessed in the society and took the form in such as education, housing, public utility services and infrastructure.
However matters may be said to have crystallised with the budget speech of December 11, 1970 following the Black Power riots when the then Minister of Finance, Francis Prevatt, announced the established of the Unemployment Levy–a fund separate and apart from the Consolidated Fund which, over the years, has attracted many "appellations" and are today to be found in the URP and Cepep.
It is now clear that failure to reverse the trend of "big" Government has landed T&T into the category of being statist–"a characteristic in which most aspects of the economy are so regulated and controlled by the State as to require adherence to the sovereignty of the State." Indeed, it is also clear that the existence of "big" Government, whatever may be said of "progress" being made, is certain to militate against initiatives to build a vibrant competitive and innovative private sector.
It is interesting to note that several have been the attempts over the years to direct the attention of Governments to the need to attempt to reverse the increasing trend in transfers and subsidies in the budget.
Errol O C Cupid,
Trincity, Tacarigua