Mariano Browne
Civil engineers understand the concept of structural integrity. As we live in an earthquake and hurricane zone, physical structures and buildings must be designed to withstand these forces of nature. CLICO's “One Woodbrook Place” and the new government buildings and high rises responded well to the last earthquake. This was not Grenada's 2004 hurricane experience when the newly constructed stadium, built with T&T civil engineering expertise, and almost everything else was flattened.
Economies must also be built to withstand catastrophic shocks, especially if they depend on one primary commodity be it oil, gas or tourism. T&T is recovering from its third such shock (1986, 2009 and 2014). This is a critical recovery period for T&T. It requires a stronger foundation, with robust fiscal underpinnings to navigate the 21st century's transformative changes that are already underway. Rising energy prices a la Dookeran in 2011 or increased gas production a la Imbert in 2018 are insufficient.
In this context, the Finance Minister's comments during and after the budget speech can only be viewed as arrogant and pretentious. Not content with the facetious comment that the country is on the cusp of a boom during the 2018 mid-year review, he now boasts that the turnaround was achieved because he did it "his way". That might be acceptable if, in his personal capacity as a civil engineer, he was boasting of his accomplishments in the construction sector. It is totally inappropriate as finance minister. The economy is neither his creation nor personal property. Nor is it acceptable that he should misuse his office to bolster his chances of re-election.
Not content with claiming credit for a turnaround caused by policy measures taken by the previous administration, at the post Budget presentation of the Chamber of Commerce, the Finance Minister entered dangerous territory. He promised no new taxes in 2019 and, in response to a question from Judy Kanhai of CNC3, dismissed the real and present danger facing the National Insurance Board. He said that he could not do everything and that the NIB had substantial assets and that the issue of sustainability might be a problem 30 years down the road.
The Finance Minister's response is totally inaccurate and misleading. The National Insurance Board is part of his portfolio, so he ought to know its current status. In June 2017, the very Chamber of Commerce (TTCIC) hosted a seminar to put NIB's issues on the table. The 9th Actuarial report highlighted the financial issues in Section 3, pages 43-64 based on 2013 data.
The 10th Report is now due, and I have no doubt that the minister would have been presented with its findings. In summary, the 10th report would have indicated that the situation has worsened. Therefore, the minister cannot claim ignorance. As the second most senior parliamentarian he has 27 years of experience and this problem has been developing for some time.
NIS is a pay-as-you-go scheme, meaning that it depends on working people to pay the pensions of retirees. When benefit payments exceed contributions, the fund is in trouble. The 9th actuarial report indicated that this would begin to happen in 2013. Further, by 2018 the fund would be drawing on investment income to fund benefits and begin to sell assets. Table 3.6 is taken from the 9th report and puts the information in tabular form.
In other words, we are in a social security crisis. The fund, to which all employees would have contributed, will begin to sell assets and will be extinguished in ten years if action is not taken immediately to increase contributions and raise the retirement age. The NIB's $20 billion sheet is insufficient to meet projected benefits payments. On current projections, it will run out in ten years, not 30. This is shown by chart 3.2 from the 9th Report.
Pensions to government retirees are a claim on the consolidated fund ie, tax revenues. So is the senior citizens' grant which already accounts for eight per cent of the Government's budgeted expenditure for 2019. Government's position is much worse if these items are factored to the medium-term financing framework as both (senior citizens grant and government pensions) are unfunded.
This is only "one" of the very real budgetary issues that the minister has sacrificed on the altar of political expediency. I have no doubt that "his way" has been very beneficial…to him. His oath of office, however, establishes a duty of care which he must not dismiss in such a cavalier fashion. My call for leadership and management is not an empty request. They are performance imperatives required by the exigencies of T&T's economic situation.