Dig deep! Drivers will feel the bite of the 2012-2013 budget immediately today with the price of premium gas shooting up to $5.75 per litre, an increase of 43.75 per cent. The gaming industry, once the focus of the Manning administration, was also hit by PP budgetary increases on gambling devices from yesterday. These were among several increases-as well as tax changes, grants and other concessions-outlined by Finance Minister Larry Howai in a $58.4 billion package. "We're at a turning point in our growth dynamics...We've established a roadmap to bring our budget into balance by 2016, if not before," Howai said, after a two-hour presentation at the Parliament chamber. The theme of Howai's maiden budget was "Stimulating Growth, Generating Prosperity." The Education Ministry received the largest allocation of $9.1 billion. Howai's mid-term budget is the largest to date-$4 billion more than the 2011/2012 budget of $54.6 billion.
He budgeted for a deficit of 7.669 billion or 4.6 per cent of Gross Domestic Product, similar to the 2011-2012 budget deficit. He said Government had taken a deliberate decision to operate this year with a deficit, as this was required to provide the needed stimulus at a point when the economy was emerging from a difficult period. While noting strong economic indicators in T&T, Howai said the global economy required T&T to be watchful in making investments. "The situation requires a judicious mix of measures. Focus in this budget is to provide a strong stimulus to the economy, aimed at accelerating the growth momentum," he said. Howai's mix involves stimulating growth for increased revenue, refocusing Government expenditure and building a competitive economy. Howai added: "While we have revised regularly our oil and non-oil tax regimes, evolving and changing domestic and international considerations have compelled us to conduct a comprehensive review of the current tax structure. I shall do so in fiscal 2013." He said that involved three areas: The land and building (property) tax, the fuel subsidy and overall tax regime from personal and corporate taxes."
On the gasoline subsidy, which Government had been urged to address, Howai said: "I propose to reduce the subsidy on premium gasoline. "The price for premium gasoline will be close to the market price and would be fixed at $5.75 a litre. The new pricing structure will take effect from October 2, 2012." Ahead of announcing the full measure, Howai had said in order to support Government's planned CNG conversion programme he proposed to initiate a "gradual" reduction in the fuel subsidies beginning with the price of premium gas. He said an inter-ministerial team will review additional measures aimed at further addressing the reducing of the current levels of subsidy. Such measures will be "progressively" introduced during 2013. Howai put the public on notice for return of the property tax, a 2010 general election issue. The PP declared a moratorium on the tax after assuming office Howai said over the next year Government would implement a regime which would cover residential, commercial, agricultural and industrial land.
Howai also brought the gaming industry under more effective control to capture more revenue. He said: "In the short term and until the management and control structure for the industry can be put into place, we will introduce regulations to manage the industry. "These regulations will come into effect on May 1, 2013. We also propose to increase the taxes levied on private members' clubs from October 1, 2012." Taxes on gaming tables, such as baccarat would range as much as $75,000 a year, while slot machines and online gaming device would cost $12,000, he said. Howai said the Clico and Hindu Credit Union matters have dragged on "for far too long" and he intended to bring them to a close this year. He said as part of the overall solution Government would incorporate a new insurance company into which those traditional policies and other assets would be transferred from Clico.
That new company, he said, would continue to manage the traditional policies. Howai also announced the Clico Investment Fund being launched next month-and traded on the Stock Exchange in January-plus tax exemption on fund income.
Arrangements for HCU beneficiaries over $75,000 would start on November 1, he said. He also announced plans to deal with industrial relations issues. Among national security incentives, he extended the protective services' non-taxable $1,000 special allowance to all Special Reserve Police from yesterday . Purchase of CCTV cameras and digital video recording equipment for homeowners, community and business security will now be exempt from customs duties and Value Added Tax. The disability assistance grant was increased by $200 a month to $1,500 a month. For children with medically certified disabilities, this will rise from $800 to $1,000 a month from February 1, 2013. Increases in National Insurance benefits now apply to several categories from maternity and funeral grants to survivors' benefit. The self-employed will also be included in the NIS?system. Howai announced changes in the NIS?contribution rate of 0.1 per cent for employees and 0.2 per cent for employers in 2013 and 2014. He pegged his package on an oil and gas price of US$75 a barrel. Howai outlined several positive indicators, saying the economy is at a turning point. He expected 1.2 per cent economic growth this year. He proposed to achieve a balanced budget by establishing a reduction in the equivalent of a minimum of one per cent of GDP a year for the next four years. Debate gets underway at 10 am on Friday with Opposition Leader Keith Rowley's reply.
•?Education: $9.1 billion
•?Health: $5.1 billion
•National Security: $5.5 billion
•Public?Utilities: $3.7 billion
•Housing: $3.5 billion
•Works: 2.4 billion
•Transport: 1.6 billion
•Agriculture: 1.3 billion
•Tobago House of Assembly: $2.3 billion
•?Public Sector Investment Plan: $7.5 billion
•Total revenue: $50.7 billion
• Expenditure: $58.4 billion
•?Oil revenue: $20 billion
• Non-oil revenue: $30.6 billion
• New naval plan to cut drug running
• Reintroduction of highway police patrols
• Agricultural ventures with Guyana
• Tobago concessions from hotel room expansion, integrated campus and business incentives to airport upgrade
• Extension of Churchill-Roosevelt Highway to Sangre Grande, additional access from Cocorite to Chaguaramas
• La Brea port
• Procedures to cut waste/abuse of GATE?programme
•?Incentives for enhancing creative industries
• New heritage city in Port-of-Spain
• Port-of-Spain priority for drainage plans.
• Tax incentives to stimulate construction, including multi-storey car parks.
• Driver's permit to remain valid for five years from 2012, and thereafter upon renewal for either five years or ten years at a cost of $500/$1,000.
• First Citizens Bank, T&T Mortgage Bank, T&T?Mortgage Finance Company/HMB merger for public offering.
• CEPEP,?URP?employees transitioning to private-sector companies.