A na­tion­al bud­get is per­haps the sin­gle most im­por­tant tool a gov­ern­ment has at its dis­pos­al to present an an­nu­al plan to achieve the eco­nom­ic and so­cial ob­jec­tives for the na­tion.

T&T's na­tion­al bud­get 2012/2013, Stim­u­lat­ing Growth, Gen­er­at­ing Pros­per­i­ty, was set against pro­ject­ed rev­enue of $50.736 bil­lion and ex­pen­di­ture of $58.405 bil­lion, re­sult­ing in a deficit of $7.7 bil­lion which rep­re­sents 4.6 per cent of gross do­mes­tic prod­uct (GDP). This presents a chal­lenge be­tween main­tain­ing the bal­ance be­tween the needs of the pop­u­la­tion and de­clin­ing lev­els of rev­enue. Be­yond the num­bers, how­ev­er, lies the re­al essence of bud­gets, that is, a pro­gramme of ac­tion de­ter­min­ing the ac­tiv­i­ties on which gov­ern­ments will spend funds in the pur­suit of de­vel­op­men­tal goals.

Against a back­drop of de­clin­ing rev­enues, the cham­ber has rec­om­mend­ed the use of the pub­lic pri­vate part­ner­ship (PPP) mod­el to com­mence in­fra­struc­tur­al projects un­der the Pub­lic Sec­tor In­vest­ment Pro­gramme (PSIP).

We were there­fore pleased that the Min­is­ter of Fi­nance and the Econ­o­my, through­out his bud­get state­ment, re­ferred to the use of this mod­el. We un­der­stand, too, that a PPP Unit has been es­tab­lished with­in the Min­istry of Fi­nance and the Econ­o­my, al­though as a pri­vate sec­tor body, we re­main in the dark about the struc­ture and goals of the unit, the projects be­ing con­sid­ered and how the unit in­tends to en­gage the pri­vate sec­tor as the key stake­hold­er to achieve its ob­jec­tives.

With the need to care­ful­ly man­age ex­pen­di­ture, ad­dress­ing the fu­el sub­sidy of $4 bil­lion was long over­due. The cham­ber main­tains that any fur­ther re­duc­tion in the sub­sidy must be done along­side an in­crease in the avail­abil­i­ty of com­pressed nat­ur­al gas (CNG) fu­elling sta­tions and a more ef­fi­cient pub­lic trans­porta­tion sys­tem.

In ad­di­tion to the eco­nom­ic re­al­i­ties, po­lit­i­cal and so­cial con­sid­er­a­tions al­ways find its way in­to na­tion­al bud­gets. The in­crease on pre­mi­um gas was done in the con­text of the small­est por­tion of the pop­u­la­tion be­ing ad­verse­ly af­fect­ed. The cham­ber re­mains un­con­vinced that this alone is suf­fi­cient to en­cour­age a change in con­sumer habits.

This cre­ates the busi­ness op­por­tu­ni­ty to utilise the PPP mod­el for the con­struc­tion and man­age­ment of CNG gas sta­tions. The min­is­ter in­di­cat­ed that an in­ter-min­is­te­r­i­al team will be re­view­ing ad­di­tion­al mea­sures to re­duce the sub­sidy, which will be pro­gres­sive­ly in­tro­duced dur­ing the next fis­cal year. We look for­ward to be­ing en­gaged in stake­hold­er con­sul­ta­tions dur­ing this process.

We trust that the CNG sta­tions will be treat­ed as a pri­or­i­ty among the ex­ten­sive list of pro­posed con­struc­tion projects laid out by the min­is­ter in his bud­get pre­sen­ta­tion.

Lags be­tween projects

Speak­ing at our post-bud­get pan­el dis­cus­sion held on Oc­to­ber 2, the min­is­ter ad­mit­ted the list in its en­tire­ty will not be re­alised with­in the next fis­cal year. He in­di­cat­ed that a con­sul­tant has been en­list­ed to pri­ori­tise the projects for im­ple­men­ta­tion.

We wish to em­pha­sise that the ap­pro­pri­ate lags be­tween projects are nec­es­sary to en­sure that the over­heat­ing of the econ­o­my does not re­cur, bring­ing about is­sues such as in­creased cost of con­struc­tion ma­te­ri­als and im­por­ta­tion of labour.

Even with the cur­rent non-ac­tiv­i­ty of the con­struc­tion sec­tor, avail­abil­i­ty of labour has be­come a chal­lenge for busi­ness­es. Re­port­ed fig­ures state that CEPEP and URP pro­grammes have re­duced the un­em­ploy­ment rate by ap­prox­i­mate­ly ten per cent.

The cham­ber does not en­dorse this type of un­sus­tain­able em­ploy­ment. Ide­al­ly, a time lim­it should be in­sti­tut­ed for per­sons en­ter­ing the pro­gramme to en­sure there is no abuse of the sys­tem.

While we wel­come the ini­tia­tive to of­fer an em­ploy­ment al­lowance up­lift of salary of 150 per cent for tax de­duc­tion pur­pos­es to com­pa­nies em­ploy­ing past CEPEP and URP work­ers, we await the fur­ther de­tails on how this will be ex­e­cut­ed ad­min­is­tra­tive­ly. More im­por­tant­ly, we are un­sure whether this will be suf­fi­cient to change the cul­ture from one of de­pen­den­cy to in­de­pen­dence.

Dur­ing the con­sul­ta­tion process the cham­ber rec­om­mend­ed to the Min­istry of Fi­nance and the Econ­o­my that giv­en the in­creas­ing bur­den of CEPEP and URP on the Gov­ern­ment's fi­nan­cial re­sources and the un­sus­tain­able de­pen­den­cy it has cre­at­ed, there be a re­al­lo­ca­tion of some of these funds to pro­grammes geared to­wards busi­ness own­er­ship.

It is our un­der­stand­ing that the CEPEP was ini­tial­ly de­signed to equip in­di­vid­u­als with busi­ness acu­men. How­ev­er, we are un­con­vinced of the ef­fec­tive­ness and note that bud­get 2013 has rein­tro­duced plans to fo­cus on skills de­vel­op­ment with­in CEPEP.

The mod­el rec­om­mend­ed by the cham­ber was based on the suc­cess­ful mod­el of the Coun­cil for Sci­en­tif­ic and In­dus­tri­al Re­search of South Africa, which de­liv­ered a tar­get­ed num­ber of in­cu­ba­tors, re­sult­ing in small busi­ness­es from for­mer un­em­ployed state ben­e­fi­cia­ries, sim­i­lar to the re­cent­ly launched IBIS pro­gramme by the Min­istry of Labour, Small and Mi­cro En­ter­pris­es.

We will con­tin­ue to ad­vo­cate for this mod­el to be con­sid­ered for fu­ture con­sid­er­a­tion.

Re­duc­ing crime

An area that re­mains of con­cern to the cham­ber is that of crime, the so­cial and eco­nom­ic costs of which are in­creas­ing dai­ly. We ap­pre­ci­ate that a tar­get of re­duc­ing vi­o­lent crimes by 50 per cent over the next three years has been stat­ed against which we can now eval­u­ate the spend­ing of the $5,503.7 mil­lion al­lo­cat­ed to the Min­istry of Na­tion­al Se­cu­ri­ty, the sec­ond largest al­lo­ca­tion of all the min­istries.

We were pleased that rec­om­men­da­tions to in­tro­duce tech­nol­o­gy, such as glob­al po­si­tion­ing satel­lite track­ing in po­lice cars were ac­cept­ed. The re­moval of Cus­toms du­ties and val­ue added tax on CCTV cam­eras is a wel­come ini­tia­tive, not on­ly to busi­ness­es, but al­so in­di­vid­u­als for their res­i­dences. To ad­vance this we look for­ward to leg­is­la­tion that al­lows this type of ev­i­dence to be ac­cept­ed in courts.

All pol­i­cy and fund­ing should be reg­u­lar­ly re­viewed and eval­u­at­ed in light of de­ter­mined pri­or­i­ties and per­for­mance of min­istries and agen­cies.

Each year Par­lia­ment should fo­cus its at­ten­tion on a num­ber of ini­tia­tives and ex­am­ine their va­lid­i­ty and ap­pro­pri­ate­ness. This re­quires the bud­getary process to be on­go­ing and not com­mence a few months be­fore the bud­get pre­sen­ta­tion.

In this re­gard, the Medi­um Term Pol­i­cy Frame­work 2011-2014 (MTPF) is use­ful in that it pro­vides an in­di­ca­tion of gov­ern­ment's plans over a longer pe­ri­od of time than the one cov­ered by the an­nu­al bud­get.

It al­so al­lows for ad­e­quate re­view of these plans and pri­or­i­ties be­fore they are trans­lat­ed in­to bud­getary al­lo­ca­tions. The as­sump­tion here is that the bud­get is de­vel­oped in agree­ment with these pol­i­cy doc­u­ments.

The cham­ber will con­tin­ue to de­vel­op its rec­om­men­da­tions in keep­ing with the needs of the busi­ness com­mu­ni­ty and the ob­jec­tives of gov­ern­ment's poli­cies as well as to mon­i­tor the im­ple­men­ta­tion of bud­get and pol­i­cy mea­sures.