Since Min­is­ter of Fi­nance, Colm Im­bert de­liv­ered his first fis­cal pack­age in Oc­to­ber 2015, the gov­ern­ment has spent, or al­lo­cat­ed to spend, ap­prox­i­mate­ly $476 bil­lion in the nine fis­cal years to 2024.

Trans­fers and sub­si­dies usu­al­ly com­mand a ma­jor­i­ty of Gov­ern­ment ex­pen­di­ture, with Sun­day Busi­ness Guardian es­ti­mates putting the to­tal spend­ing on that al­lo­ca­tion amount­ing to an es­ti­mat­ed $252 bil­lion be­tween the 2016 and 2024 fis­cal years.

Gen­er­al­ly, trans­fers and sub­si­dies ac­count for more than half of all the mon­ey spent by the Gov­ern­ment in a fis­cal year.

In the 2023 fis­cal year, ac­cord­ing to the pro­vi­sion­al num­bers in the 2023 Re­view of the Econ­o­my bud­get doc­u­ment, the Gov­ern­ment spent a to­tal of $57.23 bil­lion, $32.63 bil­lion al­lo­cat­ed to trans­fers and sub­si­dies. That is 57 per cent of the to­tal ex­pen­di­ture.

In the 2022 fis­cal year, 56.44 per cent of the to­tal bud­get was spent on trans­fer and sub­si­dies...$30.07 bil­lion out of $53.27 bil­lion.

And in 2021, $26.87 bil­lion was spent on trans­fers and sub­si­dies, which was 54.17 per cent of the $49.61 bil­lion spent in that year.54 per cent of the Trans­fers to house­holds is the largest an­nu­al trans­fer cost for the gov­ern­ment.

Trans­fers to house­holds in­clude sev­er­al key so­cial pro­grammes. Ac­cord­ing to the 2022 re­view of the econ­o­my, some pro­grammes that fall un­der this item are pen­sions and gra­tu­ities, se­nior cit­i­zens grant, so­cial as­sis­tance, dis­abil­i­ty grant, and the food price sup­port pro­gramme. An­oth­er sig­nif­i­cant pro­gramme list­ed un­der this item is the Gov­ern­ment As­sis­tance for Tu­ition Ex­pens­es (GATE).

The year 2020 in­deed marked a year dur­ing which when trans­fer to house­holds saw a sig­nif­i­cant jump as a re­sult of the COVID-19 pan­dem­ic.

The re­view stat­ed, “Trans­fers to house­holds ($10.24 bil­lion) rep­re­sent the largest share of ex­pen­di­ture un­der trans­fers and sub­si­dies. The nine per cent in­crease of $849.5 mil­lion, as com­pared to fis­cal 2019, is main­ly at­trib­uted to high­er than an­tic­i­pat­ed ex­pen­di­ture con­se­quent to the Gov­ern­ment’s so­cio-eco­nom­ic re­sponse to the COVID-19 pan­dem­ic. Specif­i­cal­ly in­creas­es were record­ed un­der the se­nior cit­i­zens grants (from $3.84 bil­lion to $4.06 bil­lion), dis­abil­i­ty grants (from $565.7 mil­lion to $610.0 mil­lion), so­cial as­sis­tance (from $356.9 mil­lion to $514.0 mil­lion), food price sup­port pro­gramme (from $153.1 mil­lion to $314.6 mil­lion) and salary re­lief grants (amount­ing to $226.3 mil­lion).

How­ev­er there have been moves to re­duce this amount over time and in­deed in 2021 there was a de­crease as the re­view said, “In fis­cal 2021 and are es­ti­mat­ed at $9,836.7 mil­lion; $250.4 mil­lion low­er than the pre­vi­ous year’s to­tal of $10,087.1 mil­lion.”

How­ev­er, that re­view did note, “This de­crease in ex­pen­di­ture large­ly re­flects the re­clas­si­fi­ca­tion of items pre­vi­ous­ly record­ed in this cat­e­go­ry.”

The item did rise again in 2022 as the eco­nom­ic re­view stat­ed, “Trans­fers to house­holds, which in­cludes pay­ments for pen­sions and gra­tu­ities, se­nior cit­i­zens grant, so­cial as­sis­tance, dis­abil­i­ty grant, the food price sup­port pro­gramme and COVID-19 Sup­port, rep­re­sents 34.3 per cent of to­tal trans­fers and sub­si­dies, and are es­ti­mat­ed to have in­creased by 7.9 per cent to $10.45 bil­lion in fis­cal 2022; a $762.8 mil­lion in­crease from $9.69 bil­lion spent in fis­cal 2021. This can be at­trib­uted main­ly to spend­ing un­der the GATE Fund of $400.0 mil­lion and an in­crease in the sub­sidy li­a­bil­i­ty re­lat­ing to the sale of pe­tro­le­um prod­ucts.”

Econ­o­mist Dr Vaalmik­ki Ar­joon not­ed that most of these items did have sig­nif­i­cant im­pacts on the day-to-day cost of liv­ing in the coun­try.

Us­ing the food price sup­port pro­gramme as an ex­am­ple, he not­ed that this had been a ma­jor help for sev­er­al homes around the coun­try.

“It helps them to cope more with an in­creased cost of liv­ing, es­pe­cial­ly in­creased cost of food. Food items, on av­er­age, the price, prices would have gone up by about 30.4 per cent from Ju­ly 2019 to Ju­ly this year,” Dr Ar­joon told the Busi­ness Guardian in a tele­phone in­ter­view.

“Giv­en the high­er cost of food items, it would not have been able to pur­chase the same bas­ket of gro­ceries as it would have been able to a few years ago, es­pe­cial­ly pre pan­dem­ic.”

He al­so point­ed out that a re­duc­tion to the GATE al­lo­ca­tion and the sub­se­quent ad­di­tion of a means test to qual­i­fy for as­sis­tance has al­ready changed the out­look for sev­er­al fam­i­lies as many stu­dents are opt­ing not to pur­sue ter­tiary ed­u­ca­tion, but in­stead to en­ter the work­force.

This, he ex­plained, of­ten meant, they were ac­cept­ing jobs at low­er lev­els than their po­ten­tial or in some cas­es in the al­ter­na­tive job mar­ket.

Dr Ar­joon and an­oth­er econ­o­mist, Dr Mar­lene Attzs both said it was dif­fi­cult to state what the cost of liv­ing would be with or with­out the items giv­en the many cat­e­gories it would cov­er. Attzs ex­plained that trans­fers and sub­si­dies are im­ple­ment­ed in var­i­ous sec­tors and as a re­sult ty­ing it back to a per capi­ta cost could not be ac­cu­rate­ly in­ter­pret­ed.

How­ev­er, Ar­joon not­ed that typ­i­cal­ly the ma­jor fo­cus of the bud­get is on sub­si­dies, typ­i­cal­ly trans­fers are the larg­er ex­pense.

In­deed, a re­view of the fi­nan­cial doc­u­ments for the past decade com­fort­ably sup­port­ed this as typ­i­cal­ly sub­si­dies ac­count­ed for about 1 per cent of the trans­fers and sub­si­dies al­lo­ca­tion.

How­ev­er sub­sidised costs have con­sis­tent­ly been ad­dressed in the past decade, no­tably with ad­just­ments to the fu­el sub­sidy six times.

This Dr Ar­joon not­ed di­rect­ly im­pact­ed the av­er­age cit­i­zens as trans­port costs, both via pri­vate ve­hi­cles and pub­lic trans­port in­creased as a re­sult. How­ev­er, ad­di­tion­al­ly, he said that ad­just­ment al­so had the added ef­fect of price in­creas­es on items as busi­ness­es al­so saw in­creased costs for the trans­porta­tion of goods.

An­oth­er ex­am­ple of sub­sidy ad­just­ment im­pact­ing the pub­lic was seen in in­ter-is­land trans­port as both fer­ry and air­plane tick­ets were ad­just­ed up­ward in the 2023 bud­get.

Still amid great con­cerns about the de­clin­ing en­er­gy re­turns, there re­main calls for fur­ther ad­just­ments or re­movals of sub­si­dies in the bud­get.

On Wednes­day, while speak­ing at the Trinidad and To­ba­go Coali­tion of Ser­vices In­dus­tries (TTC­SI) pre-bud­get dis­cus­sion at the Lit­tle Carib The­atre in Port of Spain, the head of the En­er­gy Cham­ber Dr Dax Dri­ver once again made a call for a re­moval of the sub­sidy for elec­tric­i­ty rates in Trinidad and To­ba­go.

“We have to re­move the sub­sidy on elec­tric­i­ty in the coun­try,’ said Dr Dri­ver at the event, “We’re putting in­cred­i­bly cheap nat­ur­al gas in­to the elec­tric­i­ty sec­tor which we could be earn­ing a lot more for­eign ex­change if we put it in­to petro­chem­i­cal and LNG sec­tors,” he said, “Leave the sub­si­dies in place for the poor­est house­holds, but bet­ter-off house­holds in the top tar­iff lev­els do not need an elec­tric­i­ty sub­sidy and com­mer­cial busi­ness­es should be pay­ing the mar­ket rate for elec­tric­i­ty.”

Dri­ver said the re­moval may not nec­es­sar­i­ly mean in­creased rates for the pub­lic, par­tic­u­lar­ly if more em­pha­sis is placed on re­duced en­er­gy con­sump­tion dri­ves as he es­ti­mat­ed that T&T could re­duce its us­age by 40 per cent with the right ad­just­ments. Ad­di­tion­al­ly, he said the re­moval of the elec­tric­i­ty sub­sidy would aid the nec­es­sary push for re­new­able en­er­gy in the coun­try.