“No election budget.” That is Finance Minister Colm Imbert’s response to widespread claims that the fiscal package for 2019-2020 is an election bag of goodies.
Speaking to a breakfast post-Budget event organised by the T&T Chamber of Industry and Commerce yesterday at the Hyatt Hotel Imbert said “this year’s budget we tried to balance, after three years of hardship, we had to do things to create the necessary revenue to keep the economy going and give it the boost that it needs to grow. We tried this year to balance everything out. We tried to deal with every sector in the country. I heard some talk about an ‘election budget’ and if it were, we would be at $60 billion and we have still been able to keep within the range of $51 to $52 billion.”
Imbert had only hours before on Monday afternoon presented the TT$53B fiscal package.
The Finance Minister explained that what the government tried to this year was to deal with “burning issues” like helping lower-income citizens and also those at the upper end of the socio-economic bracket.
“I would take the increase in the minimum wage at the lower end, and I would take the VAT bonds at the upper end. There is still the opportunity in the mid-year review to do adjustments and some more things that would boost the productive sector.”
Imbert also said that the international community has taken note of T&T’s economic stability.
“If you go out into the world and you talk to the different international institutions in Washington and New York, the way they look at T&T over the last four years is that we have been extremely disciplined. We have reduced expenditure and we have grown revenue. In 2017, the economy declined by 6.3 per cent, then it went down to three per cent, two per cent decline, zero and now that we are going back up.”
He defended the government’s decision to close former state-owned oil company Petrotrin, calling it a “threat” to the economy.
“So we have come from a place of a deep, dark place with Petrotrin, where the new companies restructured and now moving forward in a situation where they manage the debt service and it did not add a single dollar to the public debt. Heritage Petroleum in its nine months of operations, its revenue has exceeded $3 billion and it has been able to post a net profit after expenses of over $500 million.”
He said they have been to stabilize the exchange rate.
“We have kept the exchange rate at $6.8 for the last few years. The experts told us if we keep the exchange rate at $6.8 our reserves would dwindle in a few months. We still have $7 billion in reserves, 8 months of import cover, and our reserves are improving. Our Heritage and Stabilization Fund (HSF) is now at $6.25 billion.”
Reyaz Ahamad, President of the T&T Chamber of Industry and Commerce, who also spoke at the event said, unfortunately, the proposed bond only addresses a portion of the outstanding VAT refunds.
“We also seek further information on the inherent value of the bonds as we are concerned that while the bonds provide a tradable instrument, it’s tradable value is less than current market rates. This means that it will not alleviate the full amount of arrears that have been burdening our members,” he said.