PE­TER CHRISTO­PHER

Se­nior Mul­ti­me­dia Re­porter

pe­ter.christo­pher@guardian.co.tt

In the wake of the an­nounce­ment of Bud­get Day, lo­cal econ­o­mists wide­ly agree that all in­di­ca­tors sug­gest that Fi­nance Min­is­ter Dav­en­dranath Tan­coo is un­like­ly to de­liv­er a pre­sen­ta­tion with a pro­ject­ed wind­fall on Oc­to­ber 12.

“They don’t have a lot of room in the Bud­get. I know it was said, ‘Promis­es made, promis­es kept, promis­es made, promis­es kept.’ But I think if you ask some peo­ple now about promis­es, they’d say promis­es not kept. And that’s a fun­da­men­tal is­sue be­cause the num­bers look good on pa­per. The re­al­i­ty is a lot dif­fer­ent,” said econ­o­mist, CEO of the UWI Arthur Lok Jack Glob­al School of Busi­ness and for­mer min­is­ter in the Min­istry of Fi­nance, Mar­i­ano Browne.

He was re­spond­ing to ques­tions on the coun­try’s out­look at the Hy­att Re­gency on Thurs­day while at­tend­ing a Pro­man event.

“If you look at the Cen­tral Bank mon­e­tary re­port, it doesn’t re­al­ly say whether we’re grow­ing,” he said, not­ing that Trinidad and To­ba­go had man­aged to keep a rel­a­tive­ly low in­fla­tion rate com­pared to oth­er coun­tries. How­ev­er, he said this was large­ly due to the fact that fu­el prices re­mained low due to sub­si­dies.

Browne al­so not­ed that there were oth­er out­stand­ing oblig­a­tions that the Gov­ern­ment had to ad­dress which would in­cur sig­nif­i­cant ex­pense.

“Then the oth­er items we have on the ta­ble are the abil­i­ty to pay back­pay and to deal with pub­lic ser­vants and the pub­lic sec­tor’s salary in­creas­es. And then you an­nounce ten per cent, but of course, com­mu­ni­ca­tion work­ers want ten per cent too. So we have a lot of stuff to talk about in terms of how they plan to deal with that over the fu­ture.”

Browne al­so raised ques­tions about with­drawals from the Her­itage and Sta­bil­i­sa­tion Fund, as well as the US bonds ac­cessed by the Gov­ern­ment, which al­so pushed up the debt ra­tio.

“It’s an­oth­er deficit bud­get. And clear­ly if in­ter­est rates are go­ing up and in­fla­tion is go­ing up, it’s go­ing to cost a lot more. Your debt ser­vices are al­ready at rough­ly 20 per cent. So just the two loans that we took, or the two bonds, which are rollover bonds means that we haven’t changed the lev­el of bor­row­ing. Well, at least in the sec­ond bond, it went to about a cou­ple hun­dred mil­lion. A cou­ple hun­dred mil­lion means a cou­ple bil­lion TT,” he said, adding that while the Gov­ern­ment had been mak­ing an­nounce­ments about gas fields com­ing on stream, many were ex­pect­ed to yield fis­cal gas lat­er on in the fis­cal year.

Speak­ing with Guardia Me­dia, econ­o­mist Dr Jamelia Har­ris al­so could not see any re­duc­tion in gov­ern­ment spend­ing or debt in the pre­sen­ta­tion.

“Un­less there’s a sig­nif­i­cant wind­fall of rev­enues, which we don’t ex­pect there to be, or there’s a sig­nif­i­cant cut in ex­pens­es, which we al­so don’t ex­pect be­cause the Gov­ern­ment has to de­liv­er on its many promis­es, in­clud­ing wage set­tle­ments, then we can cer­tain­ly ex­pect an­oth­er deficit bud­get,” she said.

“In fact, the IMF is pre­dict­ing that the gov­ern­ment bud­get would be in deficit un­til 2031, which is when the pro­jec­tions end.”

How­ev­er, she did point out that the IMF had al­so pre­dict­ed a pri­ma­ry sur­plus from the up­com­ing bud­get.

“This means that the rev­enues mi­nus ex­pen­di­ture be­fore debt ser­vice pay­ment should be pos­i­tive. So this is what I would be look­ing at if the Gov­ern­ment is able to de­liv­er on a pri­ma­ry bud­get sur­plus,” she said.

An­oth­er for­mer min­is­ter in the Min­istry of Fi­nance, Sel­by Wil­son, al­so felt there were “too many pend­ing oblig­a­tions of the Gov­ern­ment” to avoid an­oth­er deficit.

He said, “I don’t think we can es­cape not hav­ing a deficit bud­get. We will have a deficit.”

How­ev­er, he hoped, in this pre­sen­ta­tion, the Gov­ern­ment would be re­al­is­tic with their pro­jec­tions.

Econ­o­mist Ronald Ramkissoon said it was not en­cour­ag­ing that the coun­try was set to see an­oth­er deficit bud­get, es­pe­cial­ly as there are many ar­eas which re­quire fi­nan­cial at­ten­tion that may be ne­glect­ed as a re­sult.

“From the stand­point of the man­age­ment of an econ­o­my, that is not good. Deficits are tol­er­a­ble if they are tem­po­rary, but when they start to be as long as we have been hav­ing them in Trinidad and To­ba­go, then cer­tain things start to build up. And the ma­jor one, of course, has to do with the bor­row­ing that goes to­wards fund­ing this deficit,” he said.

“In oth­er words, the Gov­ern­ment has to find the mon­ey to pay for these ex­pen­di­tures which go be­yond what it can raise in tax rev­enue, etc. The more we spend on ser­vic­ing the debt, the bor­row­ing that is, it is the less and the less we are go­ing to have for oth­er things, oth­er im­por­tant things such as ed­u­ca­tion, such as road­works, such as health and hos­pi­tals, and so on. So there’s a rea­son why you don’t want to have sus­tained bud­get deficits.”

Ramkissoon al­so warned that lean­ing on in­creased tax rev­enues may not aid the coun­try in the long run, as it would cre­ate oth­er is­sues with­in the so­ci­ety.

He stressed that the coun­try need­ed the move to­ward a bal­anced bud­get soon­er rather than lat­er.