While Government has kept the “ship of state steady” thus far, senior economist Dr Ronald Ramkissoon says to access much needed income, more effort must be made in collecting outstanding monies. He said the Dr Keith Rowley administration had help in remaining afloat, primarily due to the increases in the prices of oil and natural gas.
“I think there are some positive signs in respect of the energy sector firstly and more immediate in respect of natural gas and then in terms of the possibility for oil,” he said.
Inflation remained relatively low and most still had their jobs, notwithstanding the challenges with respect to Petrotrin and problems facing some other companies, Ramkissoon noted. However, he said, there are still some major hurdles for Government to overcome.
“There are major challenges before us having to do with repayment of the national debt, increasing debt service payments that we have to make, the continuing challenges with the exchange rate and in sourcing exchange rates especially for investments,” he said.
Ramkissoon said that although the fiscal deficit is likely to decline this year, the country still faces “another year or years of fiscal deficits” and social challenges with crime and criminal activity persist.
“The budget then is really a short term measure in the context of what should be a medium and long term plan and the budget must be seen as that. Really it’s the fiscal balancing that is taking place which would cause us to address those problems.
“That is what the budget must frontally target. It must not only seek to answer how are we going to get over this year and how we are going to get over the next year but it must locate all the measures in the context of a longer term framework which spans at least five years, otherwise we will not be facing the major challenges facing this economy,” Ramkissoon said.
He said additional taxation is a possibility but the more important consideration must be collecting taxes already owed.
“Government must collect the taxes which it admits it has not been collecting. It has moved slowly in respect of the reforms that are necessary.
“Collect first what is owed before you think about adding new taxes to the system,” he advised.