Finance Minister Colm Imbert has presented a fiscal package valued at TT$51.776 billion with expected revenue earnings of TT$47.724 billion for a fiscal deficit of over TT$4 billion.
Imbert completed the budget, under the theme “A Genuine Economic Turnaround,” predicated on an oil price of US$65 and a gas price of US$2.75 per MMBTU.
Imbert announced that with immediate effect, the price of Super Gasoline will move from $3.97 per litre to $4.97 per litre. However, the price of diesel will remain as is at $3.41 at a cost of $700 million to the state.
He said the Government had taken a decision to slow down the de-regulation of the fuel subsidy, noting that in this way the cost of public transportation and transporting of consumer items, food goods and materials will not be unduly affected. Imbert also assured that Government will continue to subsidise the cost of LPG cooking gas to consumers.
The Tobago House of Assembly has been given an allocation of $2.229 billion.
Of the allocations to ministries, the largest chunk went to the Ministry of Education- $7.3 billion.
National Security - $6.1 billion.
Health $5.65 billion.
Works and Transport $3.54 billion.
Imbert also announced increases in the allocation to food card recipients effective January 1, 2019. For households of 1-3 persons, the allocation will increase from $410 to $510; households of 4-5 persons will get an increase from $550 to $650 while households of six or more will benefit from an increase from $700 to $800. Imbert said the increases will cost the state an additional $29.2 million.
Children under the age of 18 will from January 1st be able to access the Disability Grant in an increased amount of $1500, this will cost the state $23.1 million.
The Public Assistance Grant will also be increased from January 1, 2019 and the cap on Senior Citizens Grant will be increased to $6,000 per month, allowing persons in receipt of NIS and senior citizens pensions to receive $3,000 from NIS and $3,000 in senior citizens pensions.
The tax allowance on tertiary education will also increase from the current $60,000 to $72,000 from January 1, 2019.
Those measures, Imbert said, will cost the state $423 million per year, but will help 156,350 members of the national community, including retirees and major vulnerable groups.
The bill to give effect to the Gambling, Gaming and Betting Regulatory Framework will be carried over to this Parliament term, Imbert said, noting it is long overdue.
As he laid out the course ahead, Imbert focused on six game-changers which include the Sandals and Beaches project in Tobago, which he said will be a “radical stimulus for tourism in Tobago, a new airport terminal for Tobago, two new state-of-the-art fast ferries which have been ordered from the Australian companies Austal and INCAT and the decision to shut down the Petrotrin refinery and focus on Exploration and Production.
As was widely expected, Imbert focused a portion of his presentation on the decision to shut down Petrotrin on the same day that the transition of Petrotrin to its ultimate closure on November 30th started. Imbert reiterated the Government’s position that the company was a burden on taxpayers and could not continue business as usual. He said the wage bill for the 5,000 employees is $183 per month or TT$2.2 billion annually.
The company, he said, also had one of the best medical plans, which cost the company TT$245 million a year but with “very low contribution rates by employees.” He said Petrotrin was “tottering on the brink and action must be taken now.”
As recently as last month, he said the company had approached Government for more than US$56 million or TT$383 million to purchase a cargo of crude oil and last week approached the Ministry of Finance for US$180 million (TT$1.2B) to help service a loan.
He said Petrotrin remains unprofitable and cannot generate a profit without drastic restructuring. He announced that the refinery assets will be put in a separate company and any viable offer will be accepted, reiterating that the Oilfield Workers' Trade Union still has “first option to own and operate refinery on favourable terms.”
The termination packages for employees will cost TT$2.6 billion, he said. A breakdown of that amount: $1.8B for all employees; $55m in backpay, $203m in vacation pay and $30m in ex-gratia payments.
Imbert said Petrotrin has two pension plans “both fully funded with a combined asset value of $10.7 billion and which he said, according to the latest actuarial valuations, will meet all the commitments required. In all, he said 1,400 of the company’s workforce is eligible for early retirement.