Sec­onds af­ter he an­nounced on Mon­day af­ter­noon that the Gov­ern­ment was seek­ing ap­proval to spend $58.405 bil­lion in the 2013 fis­cal year, Fi­nance Min­is­ter Lar­ry Howai said he pro­posed to re­duce the en­su­ing pro­ject­ed fis­cal deficit of $7.669 bil­lion by a min­i­mum of 1 per cent of gross do­mes­tic prod­uct (GDP) over suc­ceed­ing years.

The pro­vi­sion­al es­ti­mate of the coun­try's GDP in cur­rent prices is $153.6 bil­lion, which means that for Mr Howai to be true to his word, he would ei­ther have to cut spend­ing by about $1.5 bil­lion, raise rev­enue by a sim­i­lar amount or ar­rive at that fig­ure by a com­bi­na­tion of spend­ing cuts and tax in­creas­es.

While Mr Howai was known in his long and mer­i­to­ri­ous ca­reer as a banker for be­ing hon­est and well-mean­ing, the odds on him be­ing able to achieve $1.5 bil­lion of deficit re­duc­tion the next time he presents the bud­get are slim to none.

As the Fi­nance Min­is­ter de­liv­er­ing the bud­get of an ad­min­is­tra­tion that is al­most half-way through its five-year term, it must have dawned on him that the clos­er the coun­try gets to 2015, the more he is go­ing to be prod­ded by his col­leagues to in­crease rather than de­crease spend­ing and cut tax­es rather than in­crease them.

Giv­en the ver­i­ties of the West­min­is­ter par­lia­men­tary sys­tem, it is al­most cer­tain that Mr Howai was giv­en on­ly one op­por­tu­ni­ty to ring the bell of aus­ter­i­ty at a bud­get pre­sen­ta­tion. That op­por­tu­ni­ty was on Mon­day and that bell-an in­stru­ment that has been used for mil­lenia as a sym­bol and a sig­nal of the pos­si­bil­i­ty of dan­ger ahead-re­mains un­rung and, for all in­tents and pur­pos­es, un­ringable.

It is now un­ringable be­cause-as any­one who has mon­i­tored re­cent events in Eu­rope would know- aus­ter­i­ty is ex­treme­ly painful and is of­ten met by fe­ro­cious po­lit­i­cal and so­cial back­lash from pop­u­la­tions that have grown ac­cus­tomed to their sub­sidised lifestyles.

And the Peo­ple's Part­ner­ship, like most oth­er po­lit­i­cal par­ties in the Com­mon­wealth Caribbean, will on­ly get its fis­cal house in or­der if it is forced to by dik­tat by some supra-na­tion­al agency like the In­ter­na­tion­al Mon­e­tary Fund. De­liv­er­ing the 2013 bud­get, Mr Howai made two tiny nods in the di­rec­tion of the bell of aus­ter­i­ty: the 44 per cent in­crease in the price of pre­mi­um gaso­line and the im­po­si­tion of a new tax on im­port­ed used tyres.

Yes­ter­day, Op­po­si­tion Leader Kei­th Row­ley dis­missed the fu­el in­crease as "ner­vous, piece­meal tin­ker­ing" and made the valid point that the switch­ing to su­per, which ap­pears to be un­der­way on a large scale "will ac­tu­al­ly in­crease the cost of the fu­el sub­sidy." Dr Row­ley, like many peo­ple in this coun­try, has a right to be wary of those who promise aus­ter­i­ty mea­sures but can on­ly de­liv­er high­er pre­mi­um gas prices.

If the Gov­ern­ment were se­ri­ous about con­trol­ling ex­pen­di­ture, its main fo­cus would be to get firm con­trol over the as­pect of spend­ing called trans­fers and sub­si­dies, which ac­count­ed for $27.338 bil­lion of the $54.348 bil­lion that it is es­ti­mat­ed the Gov­ern­ment spent in 2012.

If there is one as­pect of T&T's spend­ing that de­serves the mi­cro­scope first-to be fol­lowed in short or­der by the scalpel-it is trans­fers and sub­si­dies sim­ply be­cause it has tra­di­tion­al­ly ac­count­ed for about half of the coun­try's to­tal ex­pen­di­ture.

A min­is­ter of fi­nance who was com­mit­ted to sig­nalling the im­po­si­tion of aus­ter­i­ty mea­sures would have in­sist­ed to his col­leagues that he would main­tain the 2013 ex­pen­di­ture on trans­fers and sub­si­dies at 2012 lev­els. At $33.054 bil­lion, the pro­posed 2013 ex­pen­di­ture on trans­fers and sub­si­dies is, in fact, 21 per cent high­er than the ex­pen­di­ture in 2012 of $27.338 bil­lion.

An­oth­er area of po­ten­tial dif­fi­cul­ty for the Min­is­ter of Fi­nance is his am­bi­tious rev­enue pro­jec­tion for the 2013 fis­cal year. In the cur­rent fis­cal year, Mr Howai ex­pects T&T to gen­er­ate rev­enues of $50.736 bil­lion, which is based on an av­er­age oil price as­sump­tion of US$80 per bar­rel for the Trinidad and To­ba­go bas­ket of crude and US$2.75 per mil­lion cu­bic feet for nat­ur­al gas ex­ports.

Mr Howai's 2013 rev­enue pro­jec­tion of $50.736 bil­lion is 6.4 per cent high­er than the $47.672 bil­lion that T&T is es­ti­mat­ed to have col­lect­ed dur­ing the 2012 fis­cal year. Yet in the pe­ri­od be­tween Oc­to­ber 2011 and Ju­ly 2012, ac­cord­ing to the Re­view of the Econ­o­my, the West Texas In­ter­me­di­ate price of a bar­rel of crude av­er­aged US$95.89, which is equal to a price for the T&T bas­ket of crudes of US$100.89.

The rel­e­vant ques­tion is whether it is cred­i­ble to ex­pect the T&T econ­o­my to gen­er­ate an ad­di­tion­al $3 bil­lion in 2013, based on an av­er­age crude price of US$80 a bar­rel, when the out­turn for the 2012 fis­cal year would have in­clud­ed crude ex­ports priced at 25 per cent high­er.