Former Minister in the Ministry of Finance Mariano Browne says in view of T&T's depressed revenue position, a "maintainable budget for the forseeable future" should be in the region of $40 to $42 billion. He said this figure was close to "where we were in 2008" and it had been "fiscally irresponsible to expand it to $60 billion."
Speaking at a weekly luncheon hosted by the Rotary Club of Port-of-Spain in Woodbrook, Browne said falling oil prices had recovered in a shorter time frame than anticipated due to the announcement of plans by Opec countries to co-ordinate oil cuts and reduce production. He expressed the hope that supply would narrow and prices recover towards the end of this year and into next year.
However, on the issue of the revenue shortfall Government is experiencing, he noted: "This is not a short term shortfall."
"It means that we have to have an adjustment process in the region of five to seven years," Browne said, add that it is "likely to last and get worse in 2017 before it gets better."
He said T&T's petrochemical sector is also facing shortfalls which will negatively affect its profitability position and with global moves to introduce additional natural gas into the market by Australia and the United States, T&T could eventually end up with "LNG tankers with no place to go."
"We are in a pretty tough situation," Browne said, adding that policy changes and government intervention are necessary.
Referring to the situation with ArcelorMittal, he warned: "This is just simply one of the many situations that will occur over the course of the next 18 months."
Browne said it is time for proactive steps and instead of an attitude of doom and gloom, citizens need to tighten their belts. He said T&T is facing "crisis stabilisation in terms of its revenue position and expenditure profile" and strong leadership with a clear direction is needed now to guide organisational changes and encourage public and private sector co-operation moving forward.
Later, responding to questions from reporters, Browne commended the move by Government to introduce the National Tripartite Advisory Council
"It requires a certain type of commitment and a change in the way we have had negotiations in the past," he said.
He said situations similar to the ArcelorMittal shutdown are likely in the coming months.
"Businesses have been growing on the back of a growing economy. In a situation where the economy is not likely to grow and will be in a declining mode for at least three years, you are going to have some shake out. Companies have to make decisions that will allow them to survive," he said.